Google to enter China's online music sector

A Google search page is seen through the spectacles of a computer user in Leicester, central England July 20, 2007. Google Inc plans to enter the online music market in China for the first time, as it steps up its battle with local incumbent Baidu.com Inc, media reported on Thursday.

SHANGHAI (Reuters) - Google plans to enter the online music market in China for the first time, as it steps up its battle with local incumbent Baidu.com Inc, media reported on Thursday. Google is expected to announce a joint venture with Top100.cn, to allow users to listen to and download licensed music files for free, major portal Sina.com said, citing local newspaper reports based on sources close to the U.S. firm.

The joint venture expects to generate revenue through online advertisements on the music search pages, Sina added.

A spokeswoman for Google in China said she did not comment on rumors or speculation.

Top 100 was set up with initial capital of 20 million yuan ($2.78 million) by Chinese basketball star Yao Ming, Yao's agent Zhang Mingji, and industry professional Ge Chen, Sina said.

Chinese Internet firms such as Baidu have built up their popularity by providing search services for and access to music files, or mp3s, many of which are pirated. This has drawn the ire of international music industry heavyweights.

The International Federation of the Phonographic Industry has said that more than 99 percent of all music files distributed in China are pirated and the country's total legitimate music market, at $76 million, accounts for less than 1 percent of global recorded music sales. Last week, Universal Music Ltd, Sony BMG Music Entertainment (Hong Kong) Ltd and Warner Music Hong Kong Ltd said they had launched legal proceedings against Baidu, accusing it of violating copyright.

Legal action is also being taken against Sohu.com Inc and Yahoo China.

Baidu had a 60.1 percent share of China's search market in last year's fourth quarter, according to data firm Analysys International.

Google came second with a 25.9 percent share, followed by Yahoo China with 9.6 percent.

($1=7.189 Yuan)

(Reporting by Sophie Taylor; Editing by Anne Marie Roantree)