For MySpace, a deal would increase the reach of its music service, which new CEO Owen Van Natta has been focusing on. Just yesterday, The Telegraph reported that MySpace was in talks with Facebook to make it easier for MySpace users to share MySpace videos and music on Facebook. And while MSN might not have Facebook’s luster, its reach is the same in the U.S., according to comScore figures. Asked by The Telegraph to comment on the Facebook discussions, Van Natta emphasized that “partnerships are going to be a big part of our strategy moving forward as a lot of value can be derived from them”—something that could apply to an MSN deal as well.

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Representatives at MySpace and Microsoft declined to comment about the report.

Staci adds: MySpace Music isn’t the only music service under consideration—Microsoft’s Zune is another—to fill a gap at MSN but it may be the most robust. A source familiar with the situation said it’s all at the discussion stage and nothing is close to being decided. Music is nestled within entertainment, so on its own isn’t one of those top five priorities.