Granted, Goldberg's view is the biased view of a recording exec: He's president and chief executive of New York-based Sheridan Square Entertainment, the parent of independent record label Artemis Records. But he has also launched Artist-Ent.com, a group of Internet sites offering access to established artists, such as Todd Rundgren, Peter Gabriel and Sugar Ray, as well as to original content and music programming.

Goldberg's argument is that while the Internet has created a primary culture of sites like The Motley Fool and e-Bay, its influence on the business thus far has been secondary. Most artists, he noted, still get their start on MTV. And of the 22,000 artist sites on American Online, he said, "most of them are looking for record deals," giving credence to the idea record deals still matter. He called the Internet "a gold rush," but added that "the gold is fool's gold."

In fact, Goldberg said, free downloading of MP3 music is driving more demand for CDs and cassette sales, not killing it. "The pundit's predictions have not come to pass. MP3 music has not cannibalized music sales but in 1999 helped drive a 6 percent increase in music sales."

Goldberg did acknowledge that free digital downloads of music have bonded more fans to artists and have benefited some cult bands and musicians. Still, he predicted record companies won't disappear, because their catalogs are simply too valuable. While a few small companies will thrive, he said, "the 30,000 to 50,000 demos on the Internet will not help the vast majority of artists."

Meanwhile, Goldberg warned, "the Internet music business can't be driven by technologists. It will only succeed when it learns to make room for musicians."

But will it make room for new as well as established artists? I believe it's only a matter of time before the Internet becomes a proven vehicle for launching careers and propelling new stars into the limelight. There is simply too much momentum in the Internet music industry-embodied in the growth of music-devoted Web sites, portals, software players, digital audio hardware devices and Internet music-related business deals-not to think so.

Margaret Quan is a Senior News Editor at EE Times.