Rumor broke by local portal Tencent claiming that Alibaba the ecommerce behemoth has stealthy acquired Chinese online music service Xiami.com.

Xiami which also based in Hangzhou was founded in 2006 by former Alibabaers. It started as a service to exchange music through its P2P network and make money off uploading music for downloads. Illegitimate as it sounded like, the service also tried to whitewash its offering in moves like sharing revenue with record companies as royalty rates. For instance, it costs RMB 80 cents to download a piece from Xiami, people who uploaded the piece gets 20 cents, label gets 40 while Xiami per se gets the remaining 20. According to Wang Hao, co-founder and CEO of the company, Xiami generated about RMB 400k in sales from downloading in 2010 and the number was expected to be doubled in 2011 to million RMB.

Xiami claimed more than 5 million registered accounts or 10 million (lots of users use the service without signing on board) users.

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Ben Jiang

Listener of startups, writer on tech. Maker of things, dreamer by choice.