Want Free Ad-Supported Music from Google? Check out China.

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Google has launched a new music download service featuring tunes from major music labels—and all the tracks are available for free. The catch? The service is only available in China.

Initially announced in August 2008, the new service is designed to help Google compete with Chinese market leader Baidu.com by offering music downloads. Unlike most of the rest of the world—where Google can command upwards of 80 percent of the search market in some countries—in China Google is well behind Baidu, which has long offered free music downloads. Google’s service had debuted with about 350,000 tracks from both Chinese and foreign artists (including artists from EMI, Sony Music, and Universal) and hopes to expand to over a million tracks over the next several months. The service is ad-supported, with Google sharing revenue from advertising on music pages with the music labels themselves, although terms of the split were not revealed. Google is linking to licensed tracks from Top100.cn, a Chinese music Web site co-founded by U.S. basketball star Yao Ming.

Google says it has no plans to expand the service beyond China. Nonetheless, Google’s move is intriguing because it marks the company’s first serious attempt to earn money from media distribution in a country known for its high levels of piracy—last year, the IFPI estimated nearly all (99 percent) of music files circulating in China were pirated. If Google can earn money by giving away music on its search service, other Internet businesses will likely be more willing to take a chance offering media services to the Chinese market.

Western businesses have struggled to find paths into the Chinese Internet market. In terms of population, China has more Internet users than any country in the world, making it a tempting market. However, those same businesses have been put off by China’s mammoth censorship and filtering operations (dubbed by some as “The Great Firewall of China”—just last week China blocked YouTube) and inclination to jail Internet users who disagree with the government or discuss topics like democracy, Tibet, or the Falun-Gong movement. The Chinese government has used information from Yahoo to jail bloggers and others speaking out against the government, and Yahoo, Google, Microsoft, and others have been criticized as supporting China’s authoritarian regime by doing business there.