Google (ticker GOOG) is announcing today a new online music service which seems intended to compete with similar services provided by Amazon (ticker AMZN) and Apple (ticker AAPL), escalating the battle to create the next generation of Internet businesses for storing and listening to music. Google is likely to announce the service Tuesday at its annual Google I/O developers conference in San Francisco. Initially, the service is to operate in a testing mode, and not be available to the public at large.

An item in today’s Wall Street Journal (wsj.com) indicates that users of the service are expected to be able to listen to songs they have uploaded to the service in a so-called streaming mode but won’t be able to download the files themselves. That limit appears to be a bid by Google to hinder the service from being used to spread pirated music.

Google will not be selling music for downloads, thereby avoiding the issue of obtaining and paying for licenses from music publishers and related entities. Users can upload their existing music portfolios to Google’s servers in the cloud and transfer them to other devices, namely mobile devices, for access and use. This scenario also raises the question of how Google expects to generate any revenue from the newly announced service.

The launch comes as Apple is reported to be in negotiations with major record labels to secure licenses for a much more robust online music service than either Amazon’s or the one Google has in the works. It is unclear when Apple might launch such a service, but most of the technical work has apparently been complete for months, according to people familiar with the circumstances.

Google’s stock price today is trading at $544, up $6.00 from its close yesterday and struggling since dropping below its 200 day moving average. Apple’s stock price is at $347, relatively flat for several days now. The stock price of Amazon has broken out to new 52 week highs today, trading at over $200 per share at $204.06.