Los Angeles - Social networking portal MySpace is set to launch a new music service as soon as this week, which in conjunction with the world's major record companies will allow online users to listen to almost any song they want.

The advertising supported site MySpace Music is partially owned by the major record labels, who in collaborating with the new system appear to have accepted that their old business model of selling individual CDs is now doomed. Instead they have recognized that the economic future of the music industry rests on the ability to offer fans free access to music that they have become accustomed to through the widespread adoption of online file-sharing programs.

MySpace Music's initial sponsors include McDonalds, State Farm, Sony Pictures and Toyota, and the program will be "expanding beyond those (four) launch partners in short order", the company said in a news release Monday announcing the imminent launch. Companies will buy ads that accompany the streaming music, but will also be able to sponsor downloads and playlists.

"MySpace Music is our biggest initiative since we launched MySpace itself," said Jeff Berman, president of sales and marketing for MySpace. "With MySpace Music integration, premium brands are offering our users and their customers new ways to discover, experience, and share music online and offline."

Users will be able to compile playlists of their favourite songs and share them with their MySpace contacts, offering advertisers a valuable format of content and the implied endorsement of people on users' social networks. Another big advantage for advertisers will be their ability to tightly target their messages based on the user profiles each MySpace member compiles.

MySpace Music is a joint venture with three of the most important music labels in the industry, Sony BMG Music Entertainment, Universal Music Group and Warner Music. According to the New York Times, EMI is also in advanced talks to join the venture, as is Orchard, the largest distributor of digital music from independent labels.

The authoritative tech blog TechCrunch said the music labels valued the new venture, which will offer millions of songs to MySpace's 120 million users worldwide, at 2 billion dollars.

However, analysts said that while MySpace Music might represent the biggest threat yet to the dominance of Apple's iTunes, its success was far from assured. The site has notable drawbacks. Users will not be able to transfer downloaded music to a mobile device or another computer. To do that they will have to purchase songs through a link with affiliated retailer Amazon.com.

In addition, existing free online music streaming sites like Imeem, Last.fm and Pandora have failed to garner significant numbers of users. MySpace has also failed in previous attempts to challenge incumbent online leaders. For example, it has failed to dethrone YouTube in online video.