Apr 16, 2011 11:00 GMT  ·  By

Google Music is starting to become the new GDrive, a mythical service that's often rumored but is never launched. Google has been working on a music service, which will include an online store and a music locker at the very least, but, even though it demoed part of it at last year's Google I/O conference, nothing has come of it yet. And it may never will, if the latest rumors come true.

It looks like Google's negotiations with the music labels have gone south, though they had been progressing smoothly, albeit slowly, so far. A source familiar with the matter, tells Media Memo that it's not going great, all of a sudden.

Apparently Google has changed its mind about some of the terms and is rethinking the whole thing. It may be altering some of its products and what it plans to offer, or maybe adjusting the licenses it needs.

Others are saying that Google has pretty much had enough with the music industry and may even be thinking at alternatives that don't involve the labels, which may mean a very limited service or no service whatsoever.

The source of this new tension could very well be Amazon's bold move. The company launched an online storage service, offering 5 GB of space for free, and a cloud music player at the same time.

Users can upload their songs to the Amazon cloud and then stream them on any computer or mobile device, all for free. And the best part is, Amazon did this without any sort of license from the music labels, claiming that it did not need one.

Which is in fact true, or, at the very least, is very defensible in court if it were to come to that. This may be the part that has Google thinking, so far, its negotiations with the music labels had included the locker service in a some manner.

But if Amazon can get away with it, why would Google have to struggle to get the deal moving. Google has been negotiating for months now and it's been a year since we got the first glimpse of the new service. Apple is rumored to be doing the same for about the same period of time.

All the while, Amazon comes in, launches its service and pretty much tells the record labels to suck it up, since this will actually make them more money.

Of course, this is all rumor and speculation at this point, Google's Music service may be coming soon or it may not be coming at all. At the very least though, it could and probably should launch something to compete with Amazon Cloud Drive and Cloud Player.