Justin Ouellette's music trading site Muxtape, shut down after failed talks with the RIAA, the music labels' copyright cops, may not have earned him a fortune. But it has secured him a modicum of infamy. He got invited to speak earlier this week at the WebbyConnect Summit in Laguna Niguel, explaining to others on how to replicate his overnight success with making a website deeply popular with Brooklyn's most outspoken Internet users. As Ouellette elaborates in this interview, the key is to just make up something that people want. Guess what? Just because people want free music doesn't mean you can give it to them. Ouellette never figured that part out.

MySpace Music, a joint venture between the News Corp. social network and music labels Universal, Sony and Warner,finally launches next week, says Fortune, though it still won't have a CEO. MySpace users will be able to listen to and organize playlists full of songs from all three music labels for free. (EMI is the lone holdout, which means no coldplay.) Playlists will include affiliate links to Amazon.com's MP3 store. MySpace CEO Chris DeWolfe says ad revenues and song kickbacks are going to save the music industry, replacing lost CD sales.Imeem CEO Dalton Caldwell, whose company already offers a similar product,

Following the shutdown of Muxtape, a site for posting online mixtapes, in a dispute with the music industry, someone has launched Opentape.fm, where you can download code to easily create your own Muxtape-like online mixtapes of MP3 files. And if the creators of Muxtape aren't directly responsible, they probably fed Opentape's developers everything they would need. The first clue is that the site is powered by the favored online publishing platform of millennial hipsters, Tumblr. Another clue is that the domain registration information points to 152 W. 57th Street in Manhattan, which just happens to be IAC CEO Barry Diller's address (Justin Ouellette, Muxtape's founder, worked at IAC site Vimeo). Then there are two small hints in the code:The site uses a package of Javascript, Mootools, which was also used by Muxtape. And in the source code, an HTML comment reading "Liberating taste" appears where an ASCII graphic appears in the Muxtape source code. The launch of Opentape is likely a tactic in Muxtape's fight against the RIAA. It puts the record industry trade organization in the position of having to play whack-a-mole as mixes pop up on numerous clone sites using the open-source software. It also means that Muxtape's backers no longer have to shoulder the site's soaring bandwidth costs.

Muxtape founder Justin Ouellette says he's shut down the mixtape-hosting website because of a problem with the Recording Industry Association of America. A statement from the RIAA itself seems to confirm the story. Bu we hear another reason Muxtape is shutting down is that it got too expensive for Ouellette to keep up.A tipster tells us Muxtape investor Jakob Lodwick has been heard to complain that the site's hosting bill alone amounts to $30,000 per day. That figure seems absurdly high — but could our tipster have misheard Lodwick saying the bill is $30,000 a month? After Muxtape's first day, Ouellette posted the site's stats, reporting 8,685 users uploading and playing 19,731 songs over 35,000 visits cost Muxtape $118.17 with Amazon's S3 online-storage service. Extrapolate that first day over a month, at Amazon's standard rates, and you've got a $3,545 hosting bill. Compete.com confirms that Muxtape's user base has grown at least tenfold since then, making a $30,000/mo. hosting bill not just plausible, but likely. The bill is also far more than Lodwick or Ouellette seem to have expected. In an accidentally published investment term sheet, Ouellette estimated three months of hosting would cost $18,000. That's about $72,000 off the mark, enough to eat through Lodwick's $95,000 investment and shut down the site, angry letters from the RIAA or no.

Muxtape, a New York-based online-music startup much favored by the Tumblr set, has shut down its website, citing a "problem" with the RIAA, a music-industry organization which polices copyright. Could it have anything to do with the ease with which users can download music files from the site, despite founder Justin Ouellette's efforts to block them? The company blog elaborates, barely: "No artists or labels have complained. The site is not closed indefinitely. Stay tuned."

Justin Ouellette's Muxtape, a site which hosts online mixtapes, is on shaky legal ground — and not just over the way Ouellette left his former employer, IAC-owned video site Vimeo. Making a mixtape for personal use is clearly accepted; but posting it online, for everyone on the Internet to listen to? Unclear at best. Ouellette himself has hinted that he's worried about being sued. On Userscripts.org, a site where people post and discuss add-ons to the Firefox Web browser, Ouellette has been scolding programmers for creating tools that let Muxtape users download MP3 files directly from the site — even as he was claiming that he wasn't worried about copyright issues."Please remove this script, it can only contribute to getting the site shut down," Ouellette wrote in April on Userscripts.org. "As long as you can hear the music you can copy it, but that doesn't mean I'm not going to do the diligence of trying to stop casual downloading (one of the things that would hurt its long-term viability)," he wrote on another occasion. "I was naïve enough to think assholes like you wouldn't want to wreak a good thing, but I guess I was wrong," he concluded. He's been quieter since then, aside from suggesting the site would drop the popular MP3 format in an effort to stop downloaders. The scripters have kept up their efforts. Not that this cat-and-mouse game matters. The RIAA has wisely left Muxtape alone, avoiding an ugly publicity squabble over a site that has yet to show any commercial potential. If it does begin to show some financial success, then the music-industry lawyers will swoop in demanding money. People are swift to criticize the RIAA, which has made a number of boneheadedly unpopular moves. But what should we say about the naivete of entrepreneurs like Ouellette, who are hoping that battling Firefox script kiddies will somehow count in their favor when the record labels come knocking? Muxtape's lawyers might make a "safe harbor" argument under the Digital Millennium Copyright Act — but that requires showing that Ouellette was unaware of copyright violations on the site. Hard to argue that, when he uses it himself.

On Monday, we posted Muxtape founder Justin Ouellette's accidentally-emailed-to-the-Internet photo of a napkin on which he'd scribbled details of his investment deal with Jakob Lodwick. Lodwick, best known for getting fired from Vimeo, an online video-sharing site he founded, now owned by IAC. He now spends his days playing the solipsistic teenager in a man's Crocs-shod body. Now Lodwick's replacement at Vimeo, director of development Andrew Pile, joins the fun.

Once an oversharer, always an oversharer — no matter what it costs, personally or financially. When IAC fired Jakob Lodwick — the Internet's own Howard Roark — from Web video site Vimeo, IAC agreed to pay Lodwick $100,000 a year until 2011, just so long as he stayed away from IAC employees in any new ventures. Lodwick, reportedly bipolar and never much one for consistency, has proven unable to resist the temptation. An image posted to former IAC employee Justin Ouellette's personal blog seems to confirm what's already been rumored: Lodwick funded Ouellette's side project, an online-music site called Muxtape, with enough cash — $95,000 in exchange for 1 percent of Muxtape's equity, going by the scribbled napkin — so that Oullette could quit IAC to run Muxtape full time.

Reports came in over the last hour that Muxtape was hacked, and the online-music startup has confirmed the news on its blog.

Interviewing Muxtape's Justin Ouellette for Listening Post, Eliot Van Buskirk asked "How many users are there at this point? How many muxtapes?" Ouellette's response — "more than the population of Germany, less than the population of Japan" — puts the number between 82 million and 127 million users. Compete.com puts the number around 52,000. Ouellete might have been joking, but Van Buskirk published the numbers without comment. And remember, with Ouellete and his Muxtape partner Jakob Lodwick, whom Barry Diller fired from his post as founder of online-video site Vimeo, you can't judge what's actually going on based on what they say.

We heard Jakob Lodwick may have broken his severance agreement with IAC's Connected Ventures when he poached Vimeo Web designer Justin Ouellette to help him start Muxtape, an online mix-tapes startup. How much could the gaffe cost the Connected Ventures cofounder? Reportedly, $100,000 a year through 2011. "What a mess," an IAC exec tells us. True, but mostly for Lodwick. IAC can hire more Web designers to replace the one Lodwick's entrepreneurial ventures have cost them so far. Diller's six-figure dole will be harder for Lodwick to replace.

Jakob Lodwick, the fired founder of Vimeo who's now dabbling in online music, rushed out an announcement of his involvement with Muxtape, an online mix-tapes startup — shortly after we started asking questions. But in his attempt to spoil our scoop, Lodwick may have put the payout he got from Vimeo's parent company, IAC, at risk. We're told that part of Lodwick's severance package included a fairly typical agreement to not poach any of his former Connected Venture colleagues for future projects. But with Muxtape, that's just what Lodwick's done.

Jakob Lodwick now admits he's involved with Justin Ouellette's Muxtape. What the Connected Ventures cofounder, ousted from his job at the IAC-backed venture by Barry Diller, doesn't disclose: a financial stake in Ouellette's online mix-tapes project. We hear it's more than plausible Lodwick is an early investor in the startup. Lodwick has already shown a willingness to invest in projects he admires, such as David Karp's Tumblr. Before publicly disclosing his employ with Muxtape, we asked Lodwick to explain his connection to Muxtape. In an email, Lodwick changed the subject to fantasies of his personal life.

It's starting to feel like 1988 around here, and not just because Rick Astley is back in the news. No, it's because old analog-like tech is making a virtual comeback online. Muxtape, the latest project from Vimeo's Justin Ouellette, allows aging alt-rockers and hip-hoppers to create mix tapes for their crushes like we used to with cassettes. And that's just one example.