What Will This New Feature Look Like?

In this new implementation, users can't choose between the Lala or iLike widget. Instead, Google will randomly decide which widget a user sees. This gives Google the option to switch between services and to include other services in future as well.

Buy Songs from Rhapsody - See Lyrics from Gracenote

Underneath the music onebox results, Google will feature links to its other partners, like Rhapsody and iMeem, where users will be able to purchase MP3s.

Google's partnership with Gracenote also allows it to show lyrics in the search results now. As Marissa Mayer pointed out in today's announcement, finding lyrics is still very hard on Google. Now, users can type lyrics into the default search box and Google will return results from the music search feature, and users can play the song right on the search results page.

Big Winners: Lala and MySpace

The big winners here are obviously Lala and MySpace/iLike. For Lala, this has been an especially busy period. Just last week, Lala announced a partnership with Facebook. It now powers Facebook's music gifting service.

iLike has a traditional streaming model. The company streams some song full length and some as 30-second samples. Users can buy MP3s from iLike for between $0.99 and $1.29. MySpace bought iLike earlier this year, and the widget on the Google search results page will be MySpace-branded.

Lala's business model is more interesting. Users can stream every song on the service once for free. After that, customers can buy the right to stream it for $0.10 or buy the MP3 for $0.89. Users can also upload their own music library to Lala and then stream those songs freely over the Internet.

How important this move is for the two streaming music services becomes clear when we look at the current traffic data for music-related searches on Google.

Update: We just had a quick chat with Lala's CEO Geoff Ralston after the event. The Lala team is obviously very excited about the partnership with Google and as Ralston told us, the company worked with Google for quite a while to get this new feature up and running. According to Ralston, Lala's partners in the music industry were very supportive of the integration. We also asked him if he was worried that the new influx of traffic was going to bring Lala's servers down. Google, however, stress tested Lala's servers and couldn't bring the service down with up to 550 queries per second.

What Does Google's Current Music Traffic Look Like?

Hitwise's Heather Dougherty took a close look at Google's music traffic earlier today. According to Hitwise's data, about 6% of last month's top 1000 search terms on Google were music-related. In total, Google sent about 1.48% of its traffic to music sites. The majority of these searches (15.32%) lead to a Wikipedia site, but almost 10% currently go to YouTube, 5.7% to Yahoo Music and 3% to MySpace.  Now that users can listen to music right from the search results page, these services - including Google's own YouTube - will likely see a drop in music-related traffic over the next few weeks.

We will live blog the press conference, which should get underway shortly.

10:45am: Still waiting for the call to get going. These events tend to run late, so no surprise there.

10:53: Van Natta: talking about the future strategy of MySpace

MySpace has agreed to buy iLike.

Reason for acquisition: bringing world-class content to MySpace.

"MySpace is a place where people go to express themselves."

Myspace is centralized, while iLike is distributed; both have a shared belief in open content distribution.

10:56: iLike users will not notice iLike acquisition for the time being.

iLike team will remain headquartered in Seattle.

10:57: And that's it for the prepared statement from Owen Van Natta... Taking questions now.

Q&A

10:58: Question: what to expect next in terms of integration? Van Natta: nothing to announce yet - but film could be involved.

10:59: Question: What will this mean for iLike and Facebook? Van Natta: social networks will like the fact that we will make iLike an even richer experience (basically, he politely deflected the question).

12:00: Question: What were the terms of the deal? What will the integration with MySpace music look like? Van Natta: will see how we can integrate the two. For now, the iLike team will continue to operate autonomously. Specifics of the deal remain under wraps.

12:01: Question: Integration? Was delay really delayed by tax questions? Van Natta: No plans yet. On taxes: "it was one of the smoother sailing deals I was involved in."

12:03: Van Natta: the web is going through a movement of socialization - a movement started by MySpace. "Culture is getting defined by the social interaction around content."

12:05: Question: Update on MySpace Music. Van Natta: MySpace music sees 200% growth in use year over year. Expects MySpace Music to remain a great experience for its users.

12:06: Followup: Does iLike's model of giving away free content conflict with the move by News Corp. to charge for content? Van Natta: sometimes people will pay for some content, sometimes content will be ad-supported. Expects MySpace to remain ad-supported.

12:08: Another integration question. What elements of the iLike service might find their way into the MySpace Music service? What will iLike bring to MySpace. Van Natta: we will extend the iLike service beyond music - leverage all the different entertainment categories. Might start adding more concert ticket-related features on MySpace (this is an area where iLike excels).

12:11: Last question: what does this mean for the iLike team? Van Natta: very talented team - we don't want to interrupt the innovation going on there and we want to nurture the talent already at iLike.

12:14: And that's it... thanks for reading. The press release is below and we will surely have more analysis of this deal in the days to come.

The Press Release

MYSPACE TO ACQUIRE iLIKE

LOS ANGELES - August 19, 2009 - MySpace today announced an agreement  to acquire iLike, a leading social music discovery service. The  acquisition brings together two companies who share a common vision  revolving around social discovery and distribution of quality content.  "The iLike acquisition advances our relentless pursuit of innovation  and the need to create new distributed social experiences in music and  beyond," said Owen Van Natta, Chief Executive Officer of MySpace. "We  are deeply committed to bringing world class talent into all areas of  the company and this acquisition demonstrates our focus on this  objective."

Brothers Ali and Hadi Partovi founded iLike in 2006, and in just two  years made it the largest music application across all social networks  with 55 million total users and 1.5 billion monthly impressions. The entire iLike team will stay intact including, CEO Ali Partovi,  President Hadi Partovi and CTO Nat Brown.  All three are seasoned  entrepreneurs who've held executive positions at both start-ups and  Fortune 100 companies.  Prior to iLike, Ali Partovi founded and sold  LinkExchange to Microsoft and Hadi Partovi independently co-founded  and sold TellMe Networks, also to Microsoft. Hadi Partovi also  incubated Start.com (now Live.com).  Brown has a deep and respected  history as an early architect at Microsoft, and he was involved in the  creation the first Xbox, .NET/CLR, and ActiveX/COM/OLE.  "MySpace's strengths have been a long-time source of inspiration for  iLike," said Hadi Partovi, President of iLike. "Combining MySpace's  existing platform, reach and resources with iLike's syndication  network and social discovery tools creates the potential for truly  exciting innovation and commerce across any vertical entertainment  category -- our combined assets now span all the major social  networks. I'm enthusiastic about what this combination will mean for  our users, artists, advertisers, and our staff. We are beginning an  exciting new journey together."

iLike users and the artist community should expect the iLike  experience to be unaffected by the acquisition. iLike will remain headquartered in Seattle.

Financial terms of the acquisition were not released.

From Pearl Jam to String Cheese Incident to Bruce Springsteen to millions of fans whose pocketbooks smart with every inflated Ticketmaster service fee - this is a company that almost no one likes. At first listen it's a good album, but ugh what a marketing decision.

Perhaps the band members themselves aren't even excited about the deal - the official Sonic Youth Twitter account hasn't mentioned the availability of the album at all yet. [Update, Ed: it should be noted that Sonic Youth's Thurston Moore is quoted in the press release as saying: "This album is a celebration of newfound freedom [...] Debuting it on iLike, free from industry constraints, also fit this theme."]

StereoGum gave the pre-released album a strong review at the end of April. It will be formally released one week from today. For now, you too can give Ticketmaster's investment some love by giving the album a listen on iLike.

Update: iLike emailed to say that they aren't very happy about this story and that characterizing their company as a Ticketmaster "property" is inaccurate. That seems fair, so I changed the wording to call the two "partners" instead. Ticketmaster gave iLike $13 million in 2006 in exchange for 25% ownership in the company, according to Matt Marshall at Venturebeat.

Update 2, Editor: This post has been rather contentious. We've updated the wording of the relationship between Ticketmaster and iLike again to "investor." We've also added a quote from Sonic Youth's Thurston Moore, in which he expresses his enthusiasm for iLike.