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China Embraces MP3s

Houston InterWeb Design Tuesday formed a joint venture with the
Chinese government and a Chinese investment company to build the
first governmentally approved MP3 music site in China.

The new joint venture, Beijing Artists Online L.L.C. plans to
launch a Chinese MP3 music site similar to the popular MP3.com
within 60 days.

Although the Chinese government has adopted an open-door policy
toward letting its citizens download and use MP3 players, every
Chinese song posted on a Web site still requires approval by the
Ministry of Culture. Houston InterWeb’s proprietary technology
allows the Ministry to administrate the site.

The objective of the joint venture is to promote and develop
Chinese music through the use of Houston InterWeb’s Internet
technology both in China and overseas. By creating an MP3 portal
for its 1.2 billion people, the Chinese government can promote and
develop China music industry and also create a new, financially
sustainable music distribution platform for its artists.

The joint venture is an ideal tool for the Chinese Ministry of
Culture. By taking an active role in the MP3 market, the Ministry
of Culture can also continue monitoring and controlling the
content. Even though the artists are given a full liberty to build
and update their own Web sites and upload their songs – all at no
cost to them – the site will still make the decisions on whether
the material is acceptable and should be posted on the
Internet.

The new site will be based on Houston InterWeb’s SiteBlazer
technology. Artists will be able to design and update their own Web
sites, and upload their own music and graphics. The artists will
have access to Web visit statistics to see the real-time number of
downloads and page views. Even though the joint venture is partly
owned by the government, it is a private enterprise and therefore a
commercial, for-profit operation. By teaming up with Houston
InterWeb, the new venture can import InterWeb’s expertise and
experience as well as utilize the technology and Internet business
models applied by its Western counterparts.

“An MP3 site is an ideal way for China to start promoting its
hundreds of thousands of artists, not only in China, but worldwide.
There are over 21 million Chinese speaking Internet users who
reside outside China and have therefore had limited access to
Chinese music in the past. Our new site will change all this,” says
Harry White, CEO of Houston InterWeb.

“Our service will be uniquely positioned to become the first
major governmentally approved and owned MP3 site. We believe that
the market opportunity is huge. Currently, China has only
approximately 10 million Internet users, but according to the
Yankee Group, Asian Internet usage is expected to reach nearly 374
million people by 2005. This combined with China’s rapid economic
growth will create an ideal marketplace for the MP3 site as well as
our other products and technologies. We should be announcing
additional joint ventures with China in the very near future,”
states White.

The English version of the new MP3 music site will be launched
within 60 days, and the Chinese version should be completed within
120 days. At the time of the launch, the site will have an
unprecedented amount of existing Chinese music available to the
Internet users. The new company is already in the process of
collecting and uploading a database of Chinese classical and folk
music.

The new Beijing-based company, Beijing Artists Online L.L.C. is
jointly owned by Houston InterWeb, China Culture Information Net,
an Internet arm of the Chinese Ministry of Culture, and Hainan
Dingshen Investment Co. Ltd. In addition to its ownership, Houston
InterWeb will receive a significant license fee for its SiteBlazer
technology.