MySpace is creating a free music Internet service with major recording labels to go head to head with digital giant Apple, whose iTunes has just claimed the crown as world's largest music store. The social networking website on Thursday unveiled MySpace Music, a joint venture with Sony BMG Music Entertainment, Universal Music Group, and Warner Music Group.

MySpace Music will build on the MySpace Music Channel web site and weave new services into online profile pages of more than five million musicians.

Income methods will include selling digital music downloads buyers can freely copy, video streaming supported by advertising along with ring tones for mobile telephones, concert tickets and band merchandise.

The Music Channel was launched about four years ago and is visited by 30 million people monthly, according to MySpace. The new service will be rolled out in the United States in coming months.

Financial terms of the partnership with recording labels were not disclosed.

MySpace's announcement came as data from industry tracker NPD Group showed that earlier this year iTunes topped retail colossus Wal-Mart as the world's largest music seller.

Both announcements confirm a death knell for compact disks as music lovers embrace digital formats for MP3 players such as iPod and Zune.

Online retail champion Amazon.com entered the increasingly crowded online digital music market last year. Wal-Mart is among major US retailers that sell music downloads via the Internet.

Media giant Time Warner is also considering offering a music subscription service for five dollars a month.