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Posted on ZDNet News: Mar 30, 2009 9:07:00 AM

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Google is offering free downloads of licensed songs in China, while sharing advertising revenue with major music labels in a market rife with online piracy.

The company originally announced the launch of the service in August, but now says the fall and winter were spent testing it. On Monday, the company marked the apparent full launch with a press event.

Lee Kai-Fu, president of Google in greater China, said Monday that one reason Google has lagged in the mainland search market was because it did not offer music downloads, the missing piece to its strategy in a market where it trails leader Baidu.com.

"We are offering free, high quality and legal downloads," Lee told reporters. "We were missing one piece...we didn't have music."

The service offers downloads of some 350,000 songs--from Chinese and foreign artists--a number that will rise to 1.1 million in the coming months, said Gary Chen, chief executive of Google partner Top100.cn, a Chinese music website co-founded by basketball star Yao Ming.

Music from artists signed by Sony Music, Warner Music, EMI and Universal Music will be available on the service, which Google has no current plans to expand beyond China, said Lee.

"This is the first serious attempt to start (monetizing) the online market in China. I can't overestimate how important this is," said Lachie Rutherford, president of Warner Music Asia Pacific and Asia chairman of the International Federation of the Phonographic Industry.

People will be able to search by musical measurements such as the level of "beat" in a song and "instrumentality," as well as by artist and song name.

IFPI said last year that more than 99 percent of all music files distributed in China were pirated and that the country's total legitimate music market, at $76 million, accounts for less than 1 percent of global recorded music sales.

The new service will attract people away from illegal download sites because the music and service will be of a higher quality, said Warner's Rutherford.

While Google dominates the Web search market globablly, in China Baidu holds over 60 percent of the market, more than double Google's share.

Story Copyright © 2009 Reuters Limited. All rights reserved.

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