Social networking site Facebook denies rumors that it has approached major music labels about launching a music service in a bid to compete with Apple's iTunes, according to news reports.

FT sources said the talks are still in the preliminary stages with big record companies about creating a music service on the social networking site. The report follows similar moves by MySpace, a rival social network site, which is discussing a MySpace Music joint venture with the four largest record companies †Universal Music, Sony BMG, Warner Music and EMI.

Music sales would provide Facebook with an alternative revenue stream and would allow users to stream music and download in MP3 format.

While details remain vague, record executives said that they expected a service would offer consumers free streams of music, supported by advertising, as well as the ability to pay for downloads in MP3 format, which can be played on any device, the FT article stated.

Facebook did not launch any new music or film products in recent weeks, the company said in a statement according to CNET.

Facebook created informational pages called 'Music on Facebook' and 'Film on Facebook' as guides and resources for musicians, bands and filmmakers wanting to create their own Facebook Pages. The ability for musicians, bands and filmmakers to create Facebook Pages has been available since the launch of the Facebook Pages product on Nov. 6.

Facebook also said it does not have a partnership or formal agreement with iTunes and that any links between the company and iTunes are on behalf of developers who have integrated them into their third-party applications.