Palo Alto, Calif. - Digital music start-up Lala.com on Tuesday announced the launch of a new Web-based service that lets users store their iTunes music libraries online for free, and stream them from any Internet-connected device.

The company signed its first licensing deal for the service with Warner Music Group, and is in talks with other labels.

To generate revenue, Lala.com will also offer a Web-based interface where users can purchase songs and download them directly to an iPod, without using iTunes.

"We believe over the next two years we might lose $140 million," founder Bill Nguyen told Reuters.

"Licensing fees could be $160 million over that time. We expect up to 70 percent of people will be freeloaders just listening to the music but around 30 percent will be buying music."

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http://tinyurl.com/yrh8zb (Reuters)