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Google Challenges Apple's Dominance With Music Service

Google (GOOG) on Wednesday trumped Apple by bringing to market a streaming-music service that's integrated with users' media libraries and Google+ social accounts — yet another move to capture more of its users' time.

The search giant also will release an unlocked Samsung Galaxy S4 running a special version of its Android mobile software. They were among a slew of product and software releases at the Google I/O developers conference in San Francisco focused on integrating Google+ into apps like Google Maps.

"Is it important for Google to have a music-streaming system? Yes," said Global Equities analyst Trip Chowdhry. "You don't want your customers to go someplace else when they want to stream music.

The $9.99-a-month All Access service offers access to "more than 1 million" streaming songs, said Chris Yerga, engineering director for Android.

Apple (AAPL) is said to be working on a similar service to hook into its popular iTunes media player.

Google is taking on streaming-radio service Pandora Media (P). If you like a song on All Access, you can start a Pandora-like radio station based on it. Once the station is running, users can modify the playlist, a feature lacking on Pandora's free, ad-supported service.

"Anything that you can see, you can immediately start playing," said Yerga.

Google shares rose 3% to 915.89, hitting a record high. Pandora fell 1%, while Apple sank 3%.

Developers at the conference learned the new Samsung phone is a modified 16-gigabyte Galaxy S4. Google will sell it for $649 from its Google Play store starting on June 26. It'll work initially on LTE networks on T-Mobile (TMUS) and AT&T (T).

CEO Larry Page also signaled that Google would continue expanding the Google Fiber Internet network, which is now being built out in several cities, most recently Provo, Utah. The super-fast 1-gigabit Internet is "really just the beginning," Page says.

"In a sense, all the computers we have in the world — most of them are in people's houses — can't really be used for anything useful," said Page.

Developers made up most of the 6,000 attendees. Another 1 million YouTube users streamed the 3.5-hour keynote, said Google.

Google+ got an updated look, as well as new photo-editing features. Users can now upload 15 gigabytes of high-res photos.

Google's Gateway Developers got tools to better integrate Google+ into games, mapping and the new music service. Most Google+ users use the service as a gateway. While only 190 million people visit the Google+ site each month, 390 million monthly active users use Google+ to log into other Google services, the company said.

Facebook (FB) should be "very afraid of Google+," BTIG Research analyst Richard Greenfield wrote in a research note.

"Google will win (the) social identity war," Greenfield says.

Meanwhile, the Facebook Home app for Android phones appears to be a bust after a month. Downloads have stalled amid poor reviews, with HTC reportedly planning to discontinue the "Home" handset.

Page on Tuesday broke his yearlong silence on why he could not speak for at least a few months last year. He has vocal cord paralysis, and after a summer cold the problem flared up .

"After some initial recovery I'm fully able to do all I need to do at home and at work, though my voice is softer than before," he wrote on his Google+ profile.