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Google Adds Entertainment Services to Take On Apple, Amazon

Google Inc. (GOOG), the world’s largest Internet-search company, is making a bigger push into entertainment services, adding music storage and movie-rental features to its Android software for phones and tablets.

The new Music Beta service, announced today at the company’s I/O developer conference in San Francisco, will store song libraries and playlists, and will suggest music based on listeners’ collections. Movies will be available for rent through the Android Market, and can be streamed to personal computers, tablet devices and handsets, the company said.

“We are very excited about music -- just because of the level of engagement users have with music,” Jamie Rosenberg, director of digital content for Android, said at the conference.

Google is moving into new forms of entertainment to diversify revenue, boost advertising sales and keep users on its sites for longer. The company, based in Mountain View, California, is stepping up competition with Apple Inc. (AAPL) and Amazon.com Inc. (AMZN) -- which both offer music and film services --as more users seek to access their song and movie libraries from mobile devices and multiple PCs.

Cloud Storage

Google’s music-service rollout follows Amazon’s decision to let consumers store digital music on its servers and stream the tracks to computers and Android smartphones. Google’s new service, like Amazon’s, will rely on cloud computing, which delivers songs over the Internet rather than keeping them on local hard drives. That differs from the approach of Apple’s iTunes, the world’s biggest music seller, which offers downloadable tracks.

“What we launched today is a completely legal service,” Rosenberg said. “It is storing a music collection the user already owns in the cloud in the same way that you might move your collection to a portable MP3 player.”

Rosenberg said the company was stymied by a couple of music labels in rolling out a music-buying service. He declined to name the labels, and said he looks forward to more talks with the music industry.

Yesterday, Google’s YouTube unit said it would add “The King’s Speech,” “Inception” and about 3,000 other titles to its movie-rental service. The move accelerated YouTube’s shift into Hollywood entertainment and increased its rivalry with Netflix Inc. (NFLX) Movie rentals on Android Market will start at $1.99 and the service is based on the same back-end program as YouTube’s, Google said today.

I/O Conference

Google’s I/O conference caters to programmers who design applications for Google’s platforms, including Android and the Chrome Web browser.

Google discussed the next major version of Android, dubbed Ice Cream Sandwich, which will be available to partners later this year. The company’s goal for this version of Android is that it work easily with multiple devices, including tablets, smartphones and Google TV. The company said Google TV will add the Android marketplace for applications later this year.

The Internet search giant also previewed a program called Android@Home, which will let users connect Android-based devices to home accessories such as light switches, thermostats and appliances. Special Android@Home light bulbs from Lighting Science Group will be available by the end of the year, Google said.

Google said it has activated 100 million devices that run Android. Rival Apple had sold 108.6 million iPhones, which were introduced in 2007, through the end of March.

With all that growth, Google is trying to make sure new versions of Android get to consumers. It announced today it’s working on new guidelines with partners such as HTC Corp. and Sprint Nextel Corp. The company said the partners will receive the latest Android platform upgrades for 18 months after the device is first released, as long as the hardware supports it.

Google rose $4.98 to $542.66 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have fallen 8.6 percent this year.

To contact the reporter on this story: Brian Womack in San Francisco at Bwomack1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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