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Google Inks Music Licensing Deal

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Google Inc. , the world's most popular Internet search engine provider, recently announced a licensing deal with several European music publishers, thus expanding the archive on Google Music.

The Internet search giant collaborated with Armonia, a major European music publishing group which includes French, Italian and Spanish licensing groups.

The deal will provide Google users access to 5.5 million tracks on Google Music across 35 countries, including tracks by leading artists like Lady Gaga and Rihanna. This should help Google to expand its music content offerings in Europe. The deal will allow users to integrate their favorite albums and music with their Google Music library, which can store up to 20,000 songs.

We believe that one of the key strategies for Google Music remains the expansion of its songs archive. Google announced its digital music store almost a year ago, debuting with millions of songs from leading music companies like EMI, Sony Music and Universal.

This deal will allow users to access a greater range of content, a key factor for Google to better compete with rival music destinations like Apple's (AAPL - Free Report) iTunes Store, Amazon (AMZN - Free Report) , as well as streaming services such as Spotify, Deezer and Rdio.

Google has done well in the third quarter, with its gross revenue touching a record $14.10 billion. Revenues from both Google-owned and partner sites continued to grow in double digits on a year-over-year basis. Historically, Google has always fared better than Yahoo Inc , which has been struggling to uphold itself and Microsoft (MSFT - Free Report) , which is yet to gain critical mass.

However, legal entanglements related to competitive matters or patent infringements remain an overhang. Google retains a Zacks #3 Rank, which translates into a short-term Hold rating.

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