Free music paves Google's way into ChinaWhen Eric Schmidt looks at Baidu, he doesn't see a China-grown website that accounts for 61 percent of search traffic because of its ease of use and mastery of the native tongue, as Baidu founder Robin Li claims. Instead, Schmidt sees a search engine beating the poo out of Google China because of its ease of use in downloading MP3s. (Nearly 100 percent of digital music downloads in China are unlicensed.) Schmidt's response?

Offer free, licensed music downloads to all of China. It is, in some ways, a brilliant move. In the U.S., when Google paid to license the music in uploaded videos, it raised the financial bar beyond what most YouTube's rivals could afford. It now hopes to beggar Baidu by forcing it to pay up, too — and the music industry is on its side. In Baidu's favor, however, is consumer indifference. In a country where you can buy bootlegs for pocket change, sanctioned MP3s are unlikely to be much of a draw. (Photo by Romain Guy)