KEY POINTS:
Google is already throwing its weight around in an attempt to stop a Microsoft-Yahoo tieup that would threaten its online dominance in the West.
Now it faces another challenge: to bolster its standing in a market where it is not number one - China.
The company is trying to fix up a deal with the world's biggest music companies so it can lure Chinese web users to its site with free music downloads.
In doing so, it hopes finally to make itself competitive against Baidu.com, the search engine which dominates the Chinese online advertising market and which gets a large proportion of its traffic from users searching for illegal music.
Google hopes that it can tease out a deal from the music industry to allow it to give away music in return for splitting advertising revenue it generates from the searches.
Barely 10 per cent of the music accessed in China is legally licensed in any case and Google hopes record labels will see their proposal as a chance to undercut piracy.
At the moment, Google does not throw up links to pirated music when users search the web. Instead, it guides them to a service offering paid-for downloads. This is only encouraging users to stick with Baidu.
Baidu has 60 per cent of the search market in China, measured by revenues from advertising alongside search results. Google has 26 per cent.
Universal Music, the world's largest collection of record labels, has signed on to the free music plan, which would be run through Top100.cn, a Beijing-based online music business.
Google insiders are confident SonyBMG and EMI will also sign up soon, while the fourth of the four major music groups, Warner Music, is believed to have expressed an interest.
- Independent
