Recruiting in China

EMI Group Plc, which lost a copyright lawsuit against Baidu.com, has agreed to work with the Chinese search engine to distribute streaming samples of its music online and share advertising revenue from the service under a "strategic partnership."

The two companies will also explore advertising-supported music download services that will be free of charge for all users of Baidu, the world's fourth most visited site and whose MP3 search function already contributes to 14 percent of its online traffic.

"It's a landmark revenue-sharing arrangement between an Internet search engine and an international music company in China," said a joint statement by the two companies yesterday.

Beijing-based Baidu will set up a special EMI Music Zone in its music search channel that will stream all of EMI Music's Chinese language music. While users listen to the music for free, they will be exposed to online ads.

"It provides an efficient digital distribution platform to reach Chinese consumers, allowing fans to listen to EMI's latest quality music immediately on the Internet," said Norman Cheng, chairman of EMI Music Asia in the statement.

Sales of search engines in China last year rose by nearly 50 percent from a year ago to 157 million yuan (US$20 million), at a much greater growth pace than Web portals.

Based on ratings of the commercial users that paid for advertising on the search engines, Baidu.com topped the market with a 39 percent share of the China market, followed by Google Inc's 20 percent and Yahoo's 12.6 percent.

Meanwhile, sales of online advertising excluding ads revenue by search engines in the past year in China also soared by 51 percent to nearly five billion yuan.

EMI was one of seven record companies that filed an infringement lawsuit against Baidu in September 2005, claiming the Website violated copyright by providing links to illegal music on non-affiliated sites. A Beijing court ruled in Baidu's favor.