Google’s music service has been a highly-covered topic as of late, and there were hopes that the company would reveal the retail aspect last night during the introduction of Android 4.0 “Ice Cream Sandwich” and the Samsung Galaxy Nexus. But that didn’t happen, and we’re still left with little bits and pieces of what seems to be a massive launch in the near future.

Based on recent reports, there may be a good reason why Google is having difficulty in working out deals with record labels — at least, there seems to be more to the story than what we’ve heard thus far. Ever since the company’s initial failure to launch a full-fledged service earlier this year, sources close to the situation have reported that negotiations have been problematic due to financial reasons and an uncertainty that Google will address the labels’ concerns over piracy.

And because Google was unable to reach a deal, the company launched its virtual music locker instead and named is Music Beta. But Android boss Andy Rubin has indicated that Google is looking to launch something else other than an iTunes clone. In fact, the virtual storefront will arrive soon with “a little twist.” Naturally he wouldn’t explain the “twist” aspect, leaving room for speculation that more is going on behind the scenes than dealing withuptight record labels fighting over rights and revenue.

“I think we’re close,” Rubin said onstage at the AsiaD conference in Hong Kong when asked when the MP3 store will actually launch. “[It] will have a little twist. It will have a little Google in it. It won’t just be selling 99-cent tracks.”

He went on to explain why negotiations fell apart in the beginning, saying that media companies in general haven’t been able to figure out what Google is up to. Just like Apple Computer evolved into simply Apple, Google is morphing into its own brand of gadget-based Power Ranger. After all, Google has transformed from a simple search engine to an OS developer and online retailer.

“Google is in the very, very early phases of adding consumer products to our portfolio,” he said. “The media industry didn’t see us as that. They saw us as a search company.”

Reports concerning the launch of the actual MP3 store have varied, ranging from the end of October to a broader Q4 2011. But once that finally arrives, Google will seriously need to consider selling video content if it wants to tackle Apple on all fronts.

SOURCE via All Things D