Google offering free music downloads in China

SHANGHAI — Trying to gain ground in China, Google said Monday that it had begun to offer links to free music downloads — a service it does not offer anywhere else in the world.

Google executives said they were responding to the phenomenal popularity of free music downloads in China, one of the few markets where the company lags, by forming an alliance with the music industry, including Sony, Universal Music and Warner Music.

The search-engine giant based in Mountain View, Calif., hopes the demand for music downloads will raise Google's profile in China, which has already overtaken the United States as the world's biggest Internet market with nearly 300 million users. Google also wants to gain market share against its chief rival in China, Baidu, the nation's dominant search engine.

The deal, which was announced at a news conference in Beijing, is significant for Google and the global music industry because Chinese consumers are addicted to searching for music and downloading free music, often through illegal sites.

"This is a huge leap of faith for us," Kai-fu Lee, the president of Google Greater China and a former Microsoft executive, said Monday. "We hope this will move the landscape to a legal model."

Baidu, which has about 62 percent of the Chinese search-engine market, has grown incredibly popular partly by offering music search services and linking to sites that offer free downloads of music.

By comparison, Google — which until now has not offered links to free music downloads — has only about 28 percent of the search-engine market in China, according to Analysys International, a Beijing research firm.

Saying they are losing big money in China, the big global music companies have sued Baidu in a bid to stop the company from linking to illegal Web sites. But Baidu has defended itself, saying it is simply offering search links. The cases are pending.

Baidu also says it has its own revenue-sharing deals with 100 record companies. And last December, the company hired Catherine Leung, a former executive at Universal Music Group China, to head its digital entertainment division.

But Monday, Google said it was determined to catch Baidu, adding that it would offer Chinese consumers exactly what they want, but would do so legally by striking a deal with a Chinese partner and the global music industry, including independent music companies.

The Google service allows Chinese consumers to search for music, link to a Beijing company called Top100.cn, and download licensed music from that Chinese site, which has signed contracts with the music industry.

Google hopes to gain market share in music search. Top100.cn will sell advertising on its own site to pay for more than 1.1 million titles it plans to offer to Chinese consumers. And the struggling music industry gets a new revenue source.

A spokesman for Baidu said Monday that the company also had deals with some music companies and shares advertising revenue with them.

But the IFPI, the international lobby group of the record industry, estimates that 99 percent of the online downloads of music in China are illegal.

Maysee Liong Mayseey Leong, the IFPI's regional director for Asia, praised the Google deal.

"This shows you can do the right thing and still have a good service," Leong said. "It's going to be a legitimate service."

Google also said its new service would offer high-quality music downloads and protect consumers from viruses and poor-quality recordings, which the company says are a problem with illegal sites.

A spokeswoman for Google, Courtney Hohne, said that the company had worked for a long time preparing the alliance and that the aim was to capture a piece of the music search business, because most users in China are searching for online music.

Google executives said that searches for music dominate the Internet in China — even more than online games or news.

"Consumers spend so much time with music," Hohne said. "Music was really the big piece that was missing for us."