If you've been waiting with bated breath for Google to launch their iTunes competitor, take a breath. No, it's not happening, we just don't want you to pass out during the wait. A report from All Things D indicates that Google's talks with the recording industry have broken down. The situation is so bad apparently, that Google is reconsidering their entire approach to Google Music.
All the indications leading up to this were positive, with sources indicating their confidence in a deal being reached. It is possible that talks have been complicated by the launch of Amazon's Cloud Player. Google may have realized they needed different arrangements, but the labels put their collective foot down.
Google may still be able to forge ahead without label support in a more limited fashion. The search giant would not be able to sell music, but could still operate a digital locker service. How do you think this is going to pan out?