Start-up to offer CD-swap network

The San Jose Mercury reports:

A Palo Alto start-up is launching a service that is a mix of social networking, Internet swap meet and music store.

It's MySpace.com meets eBay meets iTunes.

The company, Lala.com, is open for business now on a limited basis. It goes fully public this summer. (The company is offering 1,000 early memberships at www.lala.com/invite /sj beginning at 6 a.m Tuesday.)

Lala.com, which has $9 million in venture backing from Bain Capital Ventures and Ignition Partners, presents itself as an online music co-op that allows members to trade in CDs in exchange for those they want from others. Those who want to obtain the used CDs must be willing to trade CDs from their own collection. Members pay $1, plus 49 cents in postage.

But the site is more than a CD swap meet. Consumers will also have the option of buying new CDs, and, eventually, digital music. Members are encouraged to write reviews of CDs and join an online community of like-minded music lovers.

It will be interesting to see how the record labels react to this one.