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Total Music, a joint venture by Universal and Sony BMG, has had Facebook target from the beginning. The labels approach the Internet from two directions. The first is the command and conquer approach, which is how imeem, MySpace and others were neutered. Sue the hell out of whoever dares to host music online, then cut a deal with them that brings in millions of dollars in penalties and fees.

The second approach is what Total Music is all about. The service, which acquired Ruckus to handle the back end, is striving to cut two types of deals. The first is with device makers to allow music to be accessed directly from the device for free. The device makers pay a fee to Total Music, which is passed on to the consumer. The second type of deal is with websites - who get to stream music for free with advertising. The revenue from those ads, plus a lot of user data, is owned by Total Music.

That’s the deal that Total Music approached Facebook with. Facebook would get free streaming music (while rival MySpace paid a fee per song played). Total Music would serve advertising and keep all the revenue. Facebook would also hand over user data to allow Total Music to port playlists to supported devices and other services.

The deal never happened and looks like it never will. Some sources say it was because Facebook didn’t want to hand over all the revenue and user data, and so they reached out to third parties to get a better deal. But others have a different explanation which makes more sense. Warner Music refused to allow their music to be accessed for free.

Warner, a big shareholder in LaLa (a service we’ve raved about) - they took most of the company’srecent $20 million venture round. They’ve been pushing LaLa heavily to Facebook.