Blog Post

Early Results From Google’s China Music Service

The WSJ reports that so far Google’s music service in China — which is a partnership between and Google (NSDQ: GOOG) — has attracted five advertisers who have committed $370,000 in spending. Doesn’t sound like much, considering the service was officially launched seven months ago and that ad revenue is split between and the record labels. However, the paper says that the companies plan to have 30 advertisers on board within six months, some of whom will dedicate $1 million to it. That could provide the start of a real revenue stream for the labels in China, since they don’t currently generate anything from the 99 percent of music downloads there that are illegal.

For Google, a bigger goal here is to drive traffic to its search engine, by competing with Baidu (NSDQ: BIDU), which gets a substantial percentage of its traffic from searches for MP3s. Google promises legal — and higher-quality — free downloads, a pitch that seems to be working. The WSJ says that about five million songs are now being downloaded a day via the service. Baidu has also been put on the defensive. Last week, it said it would partner with ad-supported music downlaod service Qtrax so it too could offer some legal ad-supported downloads.