AllFacebook is running a rumor that Facebook is prepping an online music store that will see it compete with Apple’s dominant iTunes. A competing story by PaidContent says the new product is to be a music platform for artists and will compete directly with MySpace, not iTunes.
According to the posts, Facebook has been searching for someone tolead the new division and has been pursuing agreements with a number of record labels.
This is bad news for the the new iLike artist platform on Facebook, which launched today. But as we’ve said before, if you play in Facebook’s sandbox, don’t be upset when Facebook wants to play there, too.