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His choice of Nine Inch Nails could be important. If he follows the band at all then he knows that leader Trent Reznor is helping to spearhead a do-it-yourself movement among musicians. Reznor left Universal Music Group last year and has experimented heavily with self distribution via the Web.

In an interview with CNET News.com last year, Merrill says he got interested in online security and hacking as a kid growing up in Arkansas. He found ways to “play with” membership rolls on white supremacist bulletin boards and wanted to embarrass them.

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Google Chief Information Officer Douglas Merrill is leaving Google to become president of EMI’s digital unit, according to sources.

He may be a music fan but he’s definitely no music-industry insider. The only connection that can be found to music is on his personal blog–he lists the Sex Pistols, Nine Inch Nails and Mary-Chapin Carpenter among his favorite performers.

But for Merrill the move will require either huge mental exercise or a near religious conversion. At Google, products and strategy focus on opening up content for the world to see and making it searchable by anyone with an Internet connection. This world view has repeatedly put Google at loggerheads with copyright holders and their ilk. For instance, Google has been sued over its book scanning project, its news aggregation site and its YouTube video site, where you could easily find pirated music videos and TV clips.

Merrill, vice president of engineering, joined Google in 2003 as senior director of information systems and led strategic efforts including regulatory activities related to Google’s 2004 IPO. He oversees all internal engineering and support worldwide. Before working at Google, Merrill held information technology, engineering and security positions at Charles Schwab, Pricewaterhouse and RAND Corp., a non-profit think tank.

News.com Poll Can a Google exec teach the recording industry how to take advantage of the Internet?

Like other record labels, EMI is struggling to compete in an industry turned upside down by the Internet. The music industry has to figure out how to deal with technology that easily lets people “rip and burn” music for free instead of paying for CDs. And artists, frustrated with politics at record labels, turning to the Internet to release and promote their music.

A separate source familiar with the matter said Merrill will be starting at EMI later this month and that the position was created specially for him. He is staying in California, the source says. EMI, the fourth-largest record label, is based in London.

Merrill’s experience at Google, considered along with Apple as one of the most innovative technology companies ever, can help EMI navigate the digital waters better. Traditionally, record labels have been slow to adopt technology and have completely missed the boat on e-commerce. Merrill will be crucial to evaluating technology and helping EMI create an Internet strategy.

(Credit: Google)

In this environment, Merrill might be exactly what EMI needs.

Others, including Radiohead and Madonna have walked away from traditional record companies. And of course, there’s big questions to be answered regarding file-sharing, ad-supported music, iPods and how to make money on digital distribution.

A Google spokesman confirmed that Merrill is leaving but said he could not confirm the other information. A spokeperson for EMI Music Group declined to comment.

“For EMI to hire someone from Silicon Valley will offer them a huge advantage over the label next door,” says Hab Haddad, vice president of business development at music management firm McGhee Entertainment, which represents rock band Kiss.

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They should have hired someone from Apple

The move was a head-scratcher, bizarre enough to be second-guessed as a hoax, especially given how different the music industry is from Google’s world.

And EMI needs the help, especially now. The company is under new ownership after Terra Firma bought the company last year for $4.7 billion. Since that deal was finalized, several of the label’s biggest acts have bolted, including Radiohead. Terra Firma chief Guy Hands has also begun whacking costs at the company, eliminating between 1,500 to 2,000 jobs, nearly a third of EMI’s 5,500-person staff.

Updated 5 p.m. PDT with more information and context.

“It’s a digital world, and if (music companies) can’t pull the heavyweights in (who) have been successful in other industries, they’re never going to get it right for their industry.” –Hab Haddad, VP, McGhee Entertainment

On a personal level, the match might be more heavenly. Merrill’s shoulder-length hair and casual attire makes clear he’s not a corporate “suit.” Plus he’s got a bachelor’s in social and political organization and a master’s and doctorate in Psychology from Princeton.

It will be interesting to see what an executive from a company known for pushing the envelope on fair use can bring to an industry that has rabidly protected its copyrights. Maybe he can help them use the Web to make money instead of trying to keep others from using it at EMI’s expense.

The move comes at a time when the music industry is seriously hurting. Total revenue have plunged from $14.3 billion in 2000 to $10 billion last year.

“It’s a digital world and if they (music companies) can’t pull the heavyweights in that have been successful in other industries they’re never going to get it right for their industry,” Haddad says.

CNET News.com’s Greg Sandoval contributed to this report.

The news of Merrill’s departure was first reported by PodTech founder John Furrier via Twitter and on his blog.