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Google makes further investment in Chinese music site

The company joined with basketball star Yao Ming to invest in Top100.cn

By Michael Kan, IDG News Service
July 07, 2010 07:31 AM ET

IDG News Service - Google has made a further investment in Chinese online music provider Top100.cn, it confirmed this week, even as the U.S. search giant waits to hear if its license to operate in China will be renewed.

Basketball star Yao Ming and Google each took part in a second round of funding for the Web site, Chinese news media reported. Some reports put the total of their separate investments at about US$1 million.

Google spokeswoman Jessica Powell confirmed late Tuesday that the search giant took part in the funding round but would not disclose the amount.

Top100.cn and Google have been partners since 2007, working together to provide online music in China. Their main rival has been Baidu.com, but while Baidu controls about 64 percent of the local search market, the links it provides for music downloads often lead to illegal, pirate music sites.   

To compete, Top100.cn has worked to offer legal downloads, signing deals with major music labels.

Top100.cn did not immediately return a call seeking comment about the investments Wednesday. The site boasts a music library of more than 1 million songs.

Shaun Rein, managing director of China Market Research Group, in Shanghai, said Google's investment makes sense for the company. "The trend is toward legal music services," he said.

But he was surprised that Top100.cn accepted the funding from Google, given that company's recent troubles with the Chinese government. Since last week, Google has been waiting to hear from Chinese authorities about whether its license to operate in China will be renewed. Without the license, Google could potentially be forced to end some of its operations in the country.

"I think right now with Google, everybody is trying to shy away from working with them [in China]," Rein said. "They are concerned with the way the government is going to act with Google."

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