Google is to use the lure of free and legal music downloads to battle for a large share of the huge audience of internet users in China.

The search giant is launching a service named Music Onebox, which will only be available through the Chinese Google site. Anyone searching for a band or artists will automatically see a link to Top100, a Chinese legal download site backed by investors including NBA superstar Yao Ming. The site will be blocked to users outside of China.

Top100 makes its cash by selling advertising and splitting the proceeds with record labels. Google won’t get a cut of this revenue and is instead running the link service as a marketing exercise.

At the moment, the Chinese search market is dominated by a domestic firm, Baidu, which established itself with an MP3 search option which made no distinction between legal and illegal material. The firm is subject to several ongoing lawsuits which seek to answer the question (under Chinese law) of at what point linking to illegal material makes you responsible for it.

The big challenge for Google is that, because of the need to come to licensing agreements, the selection on Top100 is much more limited than Chinese websites in general. However, both Sony and Warner (two of the ‘big four’ labels along with Universal and EMI) are in talks with the site.

It’s highly unlikely Google will launch a similar service in Western countries. That’s because music firms would not consider the ad revenue adequate compensation in those markets, whereas piracy is so rife in China that many labels consider any cash they make there to be an unexpected bonus.

Google’s interest in China should come as no surprise. The country recently overtook the US as the country with the most internet users, and with only 19% of the population online there’s still huge room for growth.

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Entry was posted on Thursday, August 7th, 2008 at 3:12 pm under Advertising, Google, Music.

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