• The Wall Street Journal, Wednesday, February 6, 2008 11 AM

Google plays second fiddle to search competitor Baidu.com in China, a position the world's largest search company doesn't like to be in. Music is one the main reasons Baidu has been able to sustain its dominance. Reminiscent to the practices of the Pirate Bay, a searchable directory peer-to-peer downloading destinations, Baidu returns searches for free, unlicensed music downloads. While the Pirate Bay is being sued for those practices in Sweden, its home base, Baidu is also attracting scrutiny for its practices both inside and outside China.

Understanding that music is key to winning the search wars in China, Google announced a new partnership with a legitimate digital music provider, Top100.cn, to offer free MP3 downloads with value added services like free ringtones and concert information from their favorite artists. Files will be "watermarked," meaning that music companies can track how often their files are downloaded and then use the data to serve better-quality ads.

The music labels would presumably earn royalties anytime their data is used to generate search revenue. So far, Universal is the only major label on board, but EMI Group and Sony BMG are said to be in discussions both Google and Top100.cn.

Read the whole story at The Wall Street Journal »