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Google Hits $900, Rumors Swirl on Music Streaming (Update 2)

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Updated from 9:46 a.m. EDT to reflect new rumors in the fifth paragraph.

NEW YORK ( TheStreet) -- The music streaming service industry is about to get a lot more crowded, as Google reportedly gets set to enter the fray. Meanwhile, Google shareholders are listening to a happy tune as the stock moves past $900.

A Google music-streaming service could hurt the likes of Spotify, Rdio and Pandora , as the companies fight for advertising dollars, users and mindshare. It's unclear what Google would charge for the service, though Spotify and Pandora both have free ad-supported versions, as well as plans with a monthly charge for unlimited, ad-free listening. Spotify charges $9.99 per month to listen to as many songs on any device, while Pandora charges $3.99 per month for its service.

Google, via Google Play, already offers songs akin to what Apple does via iTunes, but this would give users access to a much larger library of music. More time spent on Google's streaming service (which very well could be integrated into future versions of Android), would mean less time spent on the other services, provided the feature set is as good, if not better. Google needs to offer users something outside of the traditional streaming service to get people to switch. People are entrenched in these services.

The Wall Street Journal reported the Internet search giant is going to announce its own music-streaming service, taking on Spotify, Rdio and Pandora , perhaps as early as this week, at its I/O developer conference.

The Mountain View, Calif.-based company could also make several other announcements at its I/O developer conference, including a new version of its Android and Chrome operating systems. There are also rumors Google will announce new Nexus devices.

Google reportedly has already lined up deals with Universal Music Group , Sony Music Entertainment and Warner Music Group for the service. Apple is also rumored to be launching its own "iRadio" service later this year , though it's been reported that Apple and the music labels have been haggling over royalty rates for the music, thus delaying the service.

There have been rumors that Apple would acquire Pandora to compete in the streaming space. Given the recent buzz surrounding its own service, this doesn't seem likely.

Apple is credited with breaking the music industry model with iTunes, allowing users to legally download songs. In recent years, however, a growing number of users want to stream their music via the cloud, allowing companies such as Pandora, Spotify and others to fill a void. That's why it was big news earlier this week that Apple is allowing users to stream the new Daft Punk album, Random Access Memories , free on iTunes.

Google shares were higher in early Wednesday trading, up 1.94% to $904.35. Apple shares were off 1.57% to $436.88, while Pandora shares fell 0.72% to $16.63.