McDonalds to give away Apple tunes?

Fast-food giant McDonald's is planning to give away 1 billion song downloads from Apple Computer's online music store, according to a report.

The New York Post said on Thursday that it is not clear how McDonald's would distribute the music, but said an announcement is expected soon.

If true, the McDonald's deal would eclipse a pact that Apple announced with PepsiCo to give away 100 million songs early next year. Pepsi plans to offer specially marked 20-ounce and 1-litre bottles during a 60-day day period starting 1 February. One in three bottles will have a code good for a free song download.

Apple launched the Windows version of its iTunes music store on 16 October. Four days later, the company said that it had sold more than 1 million songs and that there had been more than 1 million downloads of its iTunes for Windows software.

Apple said on Thursday that it sold 1.5 million songs in the past week, compared with the 300,000 songs sold by Napster in the service's first week of operation since its relaunch as a paid service. That gave Apple an 80 per cent share of the legal download market last week, according to Nielsen SoundScan figures cited by Apple. The Mac maker said it has sold more than 17 million songs since the original Mac version of the store debuted in April.

PepsiCo and McDonald's, according to the Post, are paying full price for the songs. In both cases, however, not all of the music will be redeemed - meaning the cost for each company will be less than the theoretical maximum value of the music they are giving out.

In a statement, McDonald's said that it is pursuing "bold new initiatives in the areas of music, sports, fashion and entertainment" as part of its "I'm lovin' it" campaign, but declined to comment specifically on the Post report.

"There are no agreements to announce, so anything else is pure speculation," the company said. "You can expect news from McDonald's on a variety of fronts in the coming weeks and months, so stay tuned."

Apple has said the music store itself is not designed to be a big moneymaker, but it should pave the way for Apple to sell more of its profitable iPod digital music players.

Ina Fried writes for CNET News.com