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March 07, 2006

Yahoo China Offers Direct Link To Music Pirates (Reuters)

Personal Tech Pipeline

TAIPEI (Billboard) - Yahoo China's music search engine has turned up bad news for the music industry and possible legal action against the global Web portal.

In a situation that seems to mirror that of market-leading -- and already sued -- local portal, Yahoo China's music pages link directly to unlicensed downloads and streams of songs by domestic and international artists.

"Deep linking," as the practice is known, differs from sending Web searchers to other pages that may host unlicensed music. Instead, the links on Baidu and Yahoo directly trigger a download of music hosted by sites that appear to be unaffiliated with Yahoo.

The most obvious examples of apparent copyright infringement on the Yahoo China site include deep links to music by the Beatles. The band's catalog has never been licensed to a digital service. This is similar to , a Chinese music Web site that claimed legitimacy but sold unlicensed music.

Yahoo China management denies that such links are examples of copyright violations.

Yahoo "is a directory of what's on the Web," says Porter Erisman, international marketing VP of Beijing-based Alibaba International, the company that manages Yahoo China. Erisman says that if content is streaming or being downloaded from another site, such violations would be the responsibility of that site. "Yahoo China doesn't actually post the works which (users) are downloading," Erisman says.

California-based Yahoo paid $1 billion for a 40% stake in Internet auction site Alibaba last August, then turned over management and operation of its China portal to Alibaba. Yahoo China is a wholly owned subsidiary of U.S.-based Internet portal Yahoo. The U.S. operation links directly to, which makes users three clicks from downloading unlicensed music.

"Yahoo absolutely supports the widespread protection of copyright laws and strongly opposes the violation of copyright protections by companies or individuals," a Yahoo representative wrote in an e-mail. "Yahoo aims to respect all intellectual property rights and will remove any content when we become aware of material that infringes on copyrights. It is worth noting that as of October 2005, operates and manages the Yahoo China business, including its search compliance processes."

Chinese courts have ruled against deep linking in seemingly similar cases. Baidu was found guilty of copyright infringement by the Beijing People's Local Court September 16, 2005, in a case brought by Shanghai Bu-sheng Music Culture Media, the local distributor for EMI. Baidu has appealed the ruling, and appears to continue to post copyright-infringing links.

Like Baidu, Yahoo China deep links to downloads from a host of internationally popular artists. takes the unlicensed digital music experience one step further, offering access to streaming songs. Once users are logged into their Yahoo accounts -- U.S. accounts work -- they can select from a list of hundreds of artists to open a new Web page with Yahoo formatting and Yahoo's logo that will stream the music. As with the downloads, this music appears to be hosted by sites unaffiliated with Yahoo.


Billboard also found links on for ringtone downloads at, a site bearing the Yahoo name and logo and registered to Corp. of Hong Kong. Users of 3721 are asked to provide their name, cell phone number and handset model before a ringtone is sent to their phone for a charge of 2 renminbi (25 cents). A Chinese software and keyword engine, 3721 Network Software was acquired by Yahoo for $120 million in 2003.

Billboard was unable to determine the licensing status of ringtones sold on 3721. But the Beatles' music, which has never been made available for ringtones, was for sale.

Industry executives say Yahoo China's music service clearly violates their copyrights. "We have not licensed anything to Yahoo China," says Swee Wong, Hong Kong-based managing director of Sony BMG China. "Our view is that they are in the same category as Baidu, using 'deep links' to make available our repertoire illegally." Yahoo China links to sites offering downloads of tracks by Sony BMG artists, including Michael Jackson and Avril Lavigne. Sony BMG star Kelly Clarkson's hit "Because of You" could be downloaded and streamed for free and appeared to be for sale as a ringtone.

"Yahoo China is as bad as Baidu, where illegal MP3 search accounts for the majority of the traffic," echoes Ken Cheung, Warner Music Asia Pacific's new media/business development VP, also based in Hong Kong. Yahoo China deep linked to tracks from Green Day, a Warner Music Group act.

Other links to such acts as Eminem and Coldplay represent the remaining major labels. Independent labels have also been affected. "We don't have a licensing agreement with Yahoo China," says a representative for leading Tokyo-based independent label Avex. Yet the Yahoo China Web site features links to MP3 files of songs by such Avex acts as Japanese diva Ayumi Hamasaki.


Sony BMG China's Wong says the Asia Pacific regional office of the International Federation of the Phonographic Industry (IFPI), the music business' main lobbying arm, sent Yahoo China cease-and-desist warnings on behalf of the four major international labels in December.

In an e-mailed statement, IFPI general counsel Geoff Taylor stopped short of confirming the letters, but wrote, "It appears that the China Yahoo service is infringing our members' copyrights by making available via 'deep links' songs that they have not been licensed to distribute. We have raised our concerns with Yahoo and China Yahoo. We are hoping that this activity will now be stopped. In the meantime, we are reserving our members' rights to take legal action if it proves necessary."

China's difficulties in controlling piracy are well documented. The IFPI estimates that 90% of the music sold in China, the world's 20th-largest music market, is from pirated sources.

"Yahoo is facing a lot of competition in China from local search engines and portals, and with Baidu's music service being so popular they need to start offering the same services to keep up," says Vivek Couto, executive director of Hong Kong-based consulting firm Media Partners Asia.

The Yahoo China operation is no stranger to controversy. According to human-rights group Amnesty International, Yahoo provided account-holder information on journalist Shi Tao to Chinese state authorities who had accused Shi in April 2004 of "illegally providing state secrets to foreign entities" by using his Yahoo e-mail account to send an e-mail to the United States. Shi is currently serving a 10-year prison sentence.


By: Tim Culpan

Copyright 2006 Reuters. Click for Restrictions

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