Syed Waqar Hussain

Google has just announced the launch of Google Music. This new service is powered by Lala and MySpace’s iLike. Other partners include Gracenote, iMeem, Pandora and Rhapsody. Google has also partnered with the major music labels: EMI, Sony Music, Universal Music Group and Warner Music.

Through Lala and iLike, Google will also be able to feature music from a large number of independent labels. This new service will be available only in the US for now and will be integrated in the default search results page.

Rumors about the impending launch of Google’s music initiative flared up last week when members of the press received invitations to an event in Los Angeles that was going to feature both iLike and Lala (not to mention “members of Linkin Park”). Users could already use the parameter “music:” to bring up Google’s music search, though Google never promoted it, and this old feature didn’t include the ability to stream music right on the page.

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.