July 19 (Bloomberg) -- Germany won European Commission approval to put 120 million euros ($166 million) into an Internet search system being developed by companies including Siemens AG, SAP AG, Bertelsmann AG and Thomson SA.

The benefit to the public of creating new technologies and putting more cultural material onto the Web outweighs the risk of giving selected companies an unfair advantage via subsidies, the European Union executive agency in Brussels ruled today.

``I am pleased that Germany intends to promote additional research and innovation for the next generation of the Internet and has taken care to do so in a way that will minimize any distortions of competition,'' EU Competition Commissioner Neelie Kroes said in a statement.

The program, named Theseus, is the German portion of a joint project with France, which calls it Quaero, to create a European rival to Google Inc., the world's most popular search engine.

The German aid will be spread among industry and academic researchers through 2011, starting with ``icebreaker'' grants to big companies, the commission said. The recipients are:

-- Empolis, a unit of Guetersloh, Germany-based Bertelsmann, Europe's biggest media company;

-- a German affiliate of Thomson, the world's largest maker of television set-top boxes, which is based near Paris in Boulogne-Billancourt, France;

-- SAP, based in Walldorf, Germany, the world's largest maker of business-management software; and

-- Munich-based Siemens, Europe's biggest engineering company.

Thomson also was tapped to lead a 90 million-euro project for the French counterpart, Quaero. Other companies involved are Bertelsmann and France Telecom SA.

The project grew out of former French President Jacques Chirac's championing of European companies to challenge the Web dominance of California-based Google and Yahoo! Inc. France has backed the creation of an online library and provided aerial maps as an alternative to Google.

To contact the reporter on this story: John Rega in Brussels at jrega@bloomberg.net.

Last Updated: July 19, 2007 12:08 EDT