The talks with Vivendi's Universal Music Group, Warner Music Group, EMI Group and Sony BMG are part of billionaire Rupert Murdoch's plans to distinguish MySpace, born as a haven for new music fans, from fast-moving rival Facebook.

The venture, tentatively named MySpace Music, is expected to offer free, advertising-supported music streamed over the Internet, as well as a store that will sell songs playable on portable devices, including Apple's popular iPod.

It was not immediately clear if MySpace would build the store itself or strike a partnership with Amazon.com, which has its own digital music store.

The joint venture is likely to involve music companies taking an unspecified equity stake in the venture in exchange for the rights for the music, with News Corp owning the biggest chunk, one source said.

REUTERS