Google plans to enter a market where others fear to tread: the Chinese digital music market, where search leader Baidu leads the pack linking to “illegal” music download Web sites and has even won court ruling against labels, PaidContent reported Wednesday.

Google is in the late planning stages of a joint venture with Top100.cn, a Chinese online music company which currently sells licensed music downloads. The new service would allow Google's search engine to provide free and licensed music downloads in China.

Three major record labels (Universal is on board, and talks are on with EMI and Sony BMG), and dozens of smaller players will be involved, according to PaidContent.

The service would provide high-quality music files embedded with a watermark to track these songs and their downloads. It would be a free MP3 downloads service, while revenues come through value-added services such as ringtones or special concert listings, according to the article.