The Music Void reports that Google is fed up with the labels, particularly WMG, which is said to be suggesting that Google charge users $30 per year for the cloud service. Apparently, Google wants users to be able to try the service for free with the first 500 tracks stored. Warner declined to comment. (Still, $30 per year doesn't seem outlandish by any stretch -- services such as MOG and Rdio cost around $10 per month.)
Google may decide to go the way of Amazon (by creating a more basic music locker, sans licenses) or shut down the service all together, reportedly. Still, we have to keep in mind that these are all rumors, and negotiations are fluid.
Moreover, we've been getting glimpses of the service at a rapid clip lately, including a video in December, a screenshot in January that includes a "Sync Music" function, recent buzzing that Google has been dogfooding the product at HQ, and a set of leaked photos just last week.
We'll just have to see what -- if anything -- materializes.