Facebook Music Coming through Lala Deal?

Lala is a small music streaming service in comparison to more prominent sites like Last.fm, but Eric Eldon reports that Lala may be leading the bid for a partnership with Facebook for a streaming music option.

Having an integrated streaming music service is something Facebook has been planning for some time, and has reportedly been feeling out a number of music services including Project Playlist for a partnership. What Facebook wants is an on-demand streaming music offering that’s similar to MySpace Music. But as VentureBeat points out, that’s not the type of service Lala currently has.

With a web-based version of iTunes, Lala enables users to listen to a song for free only once, though they can purchase it for 10 cents and listen to it directly on Lala as many times as they’d like. If a listener wants to download an mp3, tack on an additional 89 cents and the song is all theirs, DRM-free. So even though Lala, which has relaunched a number of times in recent months, has a model that’s seemingly different from what Facebook may be looking for, perhaps a partnership between the two could still be in the works.

Should Lala find a way to rectify the business model to better fit with Facebook’s hopes, having a smaller music service become the partner for a Facebook music offering may be the best option for Facebook. Especially as Facebook has a tendency to seek exclusivity in such partnerships, and as the company has generally been stringent about the types of applications offered directly through its service.

Given other issues with Project Playlist, which was banned from Facebook per the request of the RIAA earlier this month, Lala may prove to have a handful of better options than some of the other streaming music services that already have existing applications on the Facebook platform.

Should Facebook move forward with a streaming music service, it could in fact develop a larger edge on music-centric social network MySpace. This could be especially true if music purchasing options could be integrated with Facebook’s credit card account options, or if Facebook could find a way to leverage its social graph for internal marketing of indie music groups and artists. These are all options that haven’t been fully fleshed out by MySpace Music.