Tokyo - Google (NASD: GOOG) is in talks with Chinese digital music distributor Top100.cn to launch a free music download service in China, and major label Universal Music Group has confirmed its involvement in the negotiations, The Wall Street Journal reported on Wednesday. Fellow major labels Sony BMG (NYSE: SNE), EMI and Warner Music (NYSE: WMG) are also considering joining the venture, people familiar with the matter told The Journal.

Such a free download service would compete with China's top search engines, such as Baidu, which offer "deep links" to MP3s hosted on third-party sites.

This week, a number of the major labels, including Universal, filed copyright infringement suits against Baidu (NASD: BIDU) and other Chinese search providers over the deep links to songs.

"In principle, search engines provide search for people to access music more efficiently. In a broader way, that's a good thing," Catherine Leung, general manager of Universal Music China, told The Journal.

"It's the links and encouraging people to download illegal content that's a bad thing."

The Google and Top100.cn music search service would embed digital watermarks in the songs it offers, so that labels would be able to track downloads.

The labels would earn royalties through individual revenue-sharing deals negotiated with Top100.cn and Google, according to The Journal.

Launched in 2006 by Orca Digital founder Gary Chen, with backing from investors including NBA star Yao Ming, Top100.cn claims to be the largest legitimate digital music retailer in China.

The site offers a catalog of more than 1 million tracks, including major label content.

Related Links:
http://snipurl.com/1z4k5 (WSJ)

http://snipurl.com/1z4j6 (Billboard)

http://www.umusic.com

http://www.top100.cn