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Google, which has no plans to offer the service elsewhere, hopes to build traffic and win over advertisers by allowing people in China to search for free music on its site. Record labels say that instead of earning money from each download, they will share advertising revenue with Google’s partner in the deal, a Chinese company called Top100.cn.
The partnership, analysts say, could help determine the future distribution of valuable content in China, which has already overtaken the United States as the biggest Internet market.
Until now, China has been a hotbed of online piracy and free downloads of music, films and even popular American television shows like ‘‘Prison Break.’’ According to the International Federation of Phonographic Industry, which represents the global record makers, 99 percent of the music downloaded in China violates copyrights.
Lawsuits by major music labels and promises by the Chinese government to crack down on Internet piracy have failed to deter the practices.
But now, the music industry says that at least in China, it can live with giving away music if it can reap profits from advertising and marketing deals.
‘‘The level of online advertising in China is quite mature, so we’re willing to try this out.’’ said Sandy Monteiro, a senior vice president at Universal Music Group.
The deal creates a powerful partnership— the world’s biggest online search and advertising engine and powerhouses from the music industry — taking aim at the leading search engine in China, Baidu, which has seen its Web traffic grow quickly over the past few years, partly because of its links to free, unlicensed music.
Global record labels have sued Baidu, trying to force the company to stop linking to unlicensed sites. But Baidu, whose representatives declined to be interviewed for this article, has said it is simply a search engine and does not engage in piracy.
With its popular searches, Baidu has managed to keep far ahead of Google in China, with a search market share approaching 65 percent.
Analysts say Google could be significantly aided by the music partnership.
‘‘It’s a smart move for Google,’’ said Ma Xiushan, deputy director general of the China Intellectual Property Society in Beijing. ‘‘Google has realized the point: They have to open the access for downloading, so that they can compete with Chinese competitors and attract more users.’’ Google executives say they acted because a music search functionwas one of the elements they did not have in China.
And that left them at a disadvantage.
According to government figures, about 84 percent of the nearly 300 million Internet users in China download music over the Web. Most of that music is downloaded to be used as ring tones on mobile phones.
Google hopes that by offering free, high-quality music—giving consumers fewerworries about viruses or damaged tracks—it can cut into Baidu’s lead.
For the music industry, which says it has lost hundreds of millions of dollars to online piracy, the deal promises to deliver a steady stream of revenue and could put pressure on Baidu and other Internet companies in China to distribute legitimate tracks or risk being locked out of future deals.
Not everyone believes it will work.
‘‘Google’s move is just burning money to compete with Baidu’s dominance,’’ said Guo Chunlong, founder of Yobo.com, a music and entertainment Web site. ‘‘Sharing ad revenues withmusic companies — this business model is not sustainable. How many page views could generate the money both Google and the music companies expect?’’ Music executives dispute that. But they say the China deal is not a model for the rest of the world. Different regions call for different approaches — some that charge for downloads, some that stream music for a single subscription price and some supported by advertising, they said. In China, they decided an advertising-supported model was best.
‘‘China was a curious place,’’ said Mr.
Monteiro at Universal Music ‘‘It was the one market we couldn’t crack. And then Google approached us about this model.’’ Erik Zhang, one of the founders of Top100.cn, said advertising-supported free downloads were just the first of several stages in the proposed deal. The partners say they could broaden offerings to include paid V.I.P. memberships, free concert tickets and other benefits.
‘‘Downloading and streaming are just the beginning,’’ Mr. Zhang said.
But one thing is clear: Google and its partners want to limit this experiment.
Even though the Internet can be reached fromanywhere, theywant the free download offer to work exclusively in China.
The site—which will eventually offer about 1.1 million tracks — is in Chinese, and only China-based Internet addresses can download free music.
But could people in China download this music free and then swap it or sell it in other parts of the world, possibly undermining the system? Lastweek, a user downloaded a music track in China and easily shipped it to a friend in London.
Music producers say customers may try this, but they are trying to put up legal and technical hurdles. ‘‘We’ll definitely need to watch it,’’ Mr. Monteiro said.


















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