Facebook has approached the major music labels about launching its own music service, according to a Financial Times report yesterday, citing those famous "people familiar with the matter."

This news comes on the heals of a similar effort by social networking rival MySpace, which reportedly has approached The Big Four music labels to launch a "MySpace Music" service.

Both MySpace, and more recently Facebook, have served as excellent promotional platforms for artists (wait... isn't that what radio is supposed to be doing?). Facebook, in November, introduced a way for artists to create their own home pages similar to MySpace. The service also links to iTunes and offers applications from online music services such as iLike, Last.FM and Pandora.

The move to transform social networking sites from promotional platforms to revenue generators, some would say, is most definitely at the forefront of thought for record label executives.

Social networking sites let users share playlists and recommend artists to their circle of friends. And as marketing/sales goes, nothing beats recommendations. Satellite radio (and most broadcast media) is still only serve as a one-way communication, lacking the interactivity and personalization that a new generation of music listeners have become accustomed to.

This level of engagement is something that satellite radio desperately needs. The question is, how?

[Financial Times, chart courtesy of WSJ]

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