Yet another online music service to launch

The former head of McAfee has announced his plans to become the next entrant into the already overcrowded digital music world.

With a pitch that evokes the heady days of 1999, digital music start-up Mercora is planning to launch a distribution service next month, inspired in equal parts by iTunes, Friendster and eBay.

Headed by former McAfee CEO Srivats Sampath, the upstart will edge into terrain that has already been staked out by the likes of Apple Computer, with iTunes, Musicmatch and Napster. But the newcomer is putting a twist on digital music sales, hoping to spur the creation of like-minded, music-loving mini-communities that can help sell new bands and artists to each other.

The self-funded company even plans a smidgen of peer-to-peer distribution, according to Sampath. Songs bought through the service will all be wrapped tightly in Microsoft copy-protection technology, but people may be able to download them from each other's computers in order to save on bandwidth costs and download times, he said.

Analysts have said Sampath's model of a music marketplace could be a welcome addition to the influx of companies that are in the business of selling digital songs. But competition is likely to be fierce, analysts said, making Mercora's long-term survival a chancy prospect.

McGuire, an analyst with GartnerG2, said: "Nobody has figured out the perfect business model on how to make money from digital distribution, so we need to have as many experiments as possible."

Mercora's new approach to the online music business stems from the rush of activity that has prompted others to respond to Apple's iTunes introduction. After years of failing companies and industry malaise, the excitement generated by iTunes helped catalyse new business models and optimism.

Sampath said the software - which bears a striking resemblance to iTunes - will show people songs and music choices based on what other people in their listening groups are tapping into that day.

"Music is so personal. There's no way to quantify it, no way to pigeonhole it," he said. "Music will lend itself perfectly to being marketed on social networks."

John Borland writes for News.com