But the music industry gets taxed on their revenue, no?

If so, shouldn't the search engines be taxed on their advertising revenues?

As per the comment above: they are already taxed on their advertising revenue.

But they don't get taxed in the jurisdiction where the revenue originates (as and when the user clicks on the ad).

What you're saying is that if I click on an ad, and that click results in a company in a completely different country paying another company in another completely different country a certain sum of money, that my government should be able to tax that? There is no money entering or leaving France when a French person clicks on a Google ad. The French government has no business whatsoever trying to tax online advertising revenue that occurs due to transactions in other countries.

Aren't the ads displayed in a particular country from companies that operated in that country? When the user clicks on the ad the (French-based) company is charged by Google (i.e. the company advertising has now transacted, and according to tax origination principles, most likely that would be interpreted as having occurred in France).

See my other comments in this thread about the Amazon advertisers cases in California and New York, for a similar situation.

Exactly the same way that if Amazon sells a product to someone in Africa, from their USA based website, Amazon do not have to pay taxes on that revenue in Africa.

The origination of revenue concept, residency, etc. in tax law is continuously being tested, both by governments and by companies, in a tug of war.

Consider this case of affiliate advertising (which, although different in specifics from the French case, has the same tone and a similar legal path):

http://venturebeat.com/2009/04/24/california’s-proposed-“ama...

In particular, this bit: "Here’s how it would work: If you have a web-based business in California and collect revenue by showing out-of-state companies’ ads on your site, Bill AB178 will claim that both you and the businesses you advertise on your site have residence in California, and are therefore required to pay California sales tax. For example, say your Santa Monica-based web site shows banner ads for Amazon.com. With Bill AB178 in place, Amazon.com would be classified as a California-based business based on the fact that your business draws affiliate advertising sales revenue. Amazon would then be required to collect sales tax on all sales into California. The idea behind the bill is that California could force out-of-state retailers to collect and pay California sales taxes."

You can also read more about it here: http://www.amazon.com/gp/help/customer/display.html?nodeId=4...