MySpace Music Artist Luke Laird

MySpace in a bid to compete with digitial music giant Apple and iTunes has announced that it will sell songs from the millions of unsigned artists on the social networking site.

MySpace is the latest company to try to take on Apple Computer Inc.’s (AAPL.O) iTunes Music Store, but unlike many other start-up rivals, it already boasts 106 million users, as well as the backing of parent company News Corp (NWS.N).

Before the end of 2006, De Wolfe said MySpace will offer independent bands that have not signed with a record label a chance to sell their music on the site. MySpace says it has nearly 3 million bands showcasing their music.

Songs can be sold on the bands’ MySpace pages and on fan pages, in non-copyright-protected MP3 digital file format, which works on most digital players including Apple’s market-dominating iPod.

The bands will decide how much to charge per song after including MySpace’s distribution fee, said Rusty Rueff, the chief executive of Snocap, which will manage the e-commerce service. Snocap provides digital licensing and copyright management services and was started by Napster founder Shawn Fanning.