Google Has Tough Road Battling Apple in Music

The iTunes Music Store accounts for 70 percent of all U.S. digital music sales, according to Reuters, with Amazon's MP3 service and others in the rear-view mirror.

Moreover, Apple isn't standing still with iTunes. The company bought Web-based music service LaLa last year, demonstrating a willingness to adopt Google's cloud computing approach, and has just launched social music service Ping, albeit with bugs.

Internet industry analysts say Google has its work cut out for it challenging Apple in digital music. Current Analysis' Avi Greengart noted that with the exception of Amazon for eBooks, nobody has effectively challenged Apple in digital content.

Content, of course, is the raison d'etre for devices, such as the iPod and iPad, and potentially with Apple TV. Google's Android, appearing on smartphones, tablets and in TVs, is trying to challenge Apple across all these fronts, but "needs a much stronger content story," Greengart argued.

"Part of Google's problem is philosophical: Google believes everything lives in the cloud, while Apple understands that consumers store content locally on PCs. Google has no local content management software, while Apple's iTunes PC software is used by over 100 million people."

Analyst Rob Enderle also questioned Google's moves in music at this stage of the Web game, suggesting Google should just buy a music service.

"iTunes isn't perfect and to run against Google on phones you'll need a full set of multimedia services, but partnering or buying one rather than building would be a vastly faster and better choice given how undervalued most are," Enderle said.

Enderle also correctly noted that while Apple's App Store has flourished, selling thousands of apps for the iPhone and iPad in 95 countries all over the world, Google's Android Market is quite limited in terms of where developers can sell their apps.

"Getting the labels to work with someone known for unprofitable ventures like this will be a rather daunting task," Enderle said.