Amie Street is one of those startups that just got me – love at first site if you will. I first discovered them in 2006, calling it an awesome new music model. Artists upload songs and those songs are free to download to start. As more downloads occur the price goes up. A cent, fifty cents, etc., up to $1.

The price of the song is an indication of how good it is, as friends share the good stuff with others.

Over time a lot of artists tried out the service, songs were downloaded over 10 million times, and the company raised venture capital from Amazon and others.

And today, the company will announce that Amazon has acquired the Amie Street business. Going forward the team will focus on Songza, which they acquired in 2009.

Amazon will redirect Amie Street to a new cobranded Amie Street/Amazon Music Service site and give users a $5 coupon to purchase songs on Amazon. But while the users and the brand are being acquired, Amazon will most likely ditch the business model, say the founders (stressing that they don’t know for sure).

Much like imeem’s acquisition by MySpace, this is more of a traffic acquisition than anything else. The terms of the deal aren’t being disclosed.

The team seems bullish on Songza, which lets users create custom playlists/radio stations and share them with friends. Since relaunching less than a month ago 20,000 stations have been created and some users are listening for an average of half an hour at a time. Here’s a station that Yelp employees in Miami created, for example.

RIP Amie Street. I once had you on the list of products I couldn’t live without. Somehow, I’ll have to find a way to move on. And I’m looking forward to seeing how Songza evolves.

Big labels have mostly shied away from Amie Street, although they’ve had success with independent labels, and there are more than 1.5 millions songs on the site. Today, though, the company is announcing their first deal with a major label, Sony.

New and catalog songs will be available at set prices of $.69, $.99 and $1.29 per song. That isn’t Amie Street’s normal model, but at least it shows that Sony is willing to experiment with variable pricing. Perhaps in time they’ll be willing to move to a purer model.

Some of the more popular Sony artists are listed here.

Amie Street co-founders Elias Roman and Joshua Boltuch confirm that the acquisition definitely took place, and Songza co-founder Scott Robbin has since become part of the 20-headed team based in New York. Songza’s other co-founder, Aza Raskin, had earlier left to join Mozilla.

Update: more information about the deal just came in. Songza was acquired for part stock, part cash, and the total sum was in the high six figures to low seven figures.

It’s not exactly the best of times to be in the digital music space right now, particularly if you’re a startup trying to build a legitimate business around an ad-supported music streaming service (look at what happened to Ruckus and SpiralFrog), but that’s exactly where Amie Street is planning on taking Songza. Currently, the service is merely an admittedly great-looking front-end for an engine that leverages the YouTube and imeem APIs and lets people intuitively play and share music and generate custom playlists, but Amie Street says it has a much bigger vision for Songza and will release a revamped version of the service by this Summer.

Amie Street thinks it can make ad-supported, licensed music streaming work, and there’s no reason to doubt that for now. After all, the company has managed to build a nice, sustainable business with a great conceptual model (where the user community dynamically decides on the pricing of music tracks) and this in partnership with music labels.

So why did they buy Songza? Roman tells me the service had long been an affiliate partner for Amie Street, and apart from a decent revenue generator for them, they were impressed with its marketing potential, design, active and committed user base as well as the fact that the small company went out of its way not to stream copyrighted content (which sounds nice, but seems virtually impossible to avoid since it depends on third-party services for locating music). Either way, the company is now a part of Amie Street, and according to Roman and Boltuch the aggregate traffic currently exceeds 1 million uniques on a monthly basis, the bulk of which comes from Songza, since it is completely free and requires no registration for searching and playing music.

Here’s another thing I learned during my conversation with Amie Street’s co-founders: the company is currently finalizing a Series B round of funding, which it expects to close pretty soon. They had earlier raised an undisclosed round of investment from Amazon.com.

Amie Street, the music store that sells songs on a sliding price scale based on how popular they are, has launched a totally revamped website and new features including a new music player and an enhanced recommendation system. We’ve been big fans since first hearing about them in 2006.

Despite Amie Street’s growing popularity, especially in the indie music scene, the site has long had a somewhat barebones or even amateurish look that was functional but not very visually appealing. The new site is much more professional, with a rotating ‘featured’ panel prominently displaying new releases and promotions, and more intuitive overall design.

New features for the release include a new music library/player that looks very similar to iTunes. Users can access all music that they’ve purchased through Amie Street and stream it from this player free of charge, from any computer. Users can also browse through the music libraries of their peers, though they’ll only be able to listen to brief previews of songs they don’t own (the company hopes to eventually include full song previews, but it sounds like this is still a ways off).

The site is also expanding its role as a discovery platform, strategically placing recommendations throughout the site. Other enhancements to the site include the addition of wishlist and gifting functionality to the main store.

Co-founder Joshua Boltuch says that site continues to see steady growth, with over 1 million songs available and an increase in paying users of around 18% month over month for the past three months. The new, more professional design can only help this – I expect many of the people who may have been turned off by the site’s former ‘indie’ look will be more receptive to the new version.

Amie Street, the indie music store that prices songs by their popularity, has pre-released The Walkmen’s new album You & Me three weeks before its scheduled launch date. The entire album is available for $5, with all proceeds going to the Memorial Sloan-Kettering Cancer Center as part of the site’s “Download To Make a Difference” campaign. You can download the album here.

The pre-release is the first to come from Amie Street’s recent deal with The Orchard, a digital music distributor with a catalog of over 1 million songs and a number of big-name artists. The release underscores how much the industry stands to gain from novel indie stores like Amie Street, which are able to experiment with promotional programs like this – boosting banding exposure while helping out a good cause.

Amie Street, the music store that features dynamic pricing that varies according to a song’s popularity, has secured a deal with digital music distributor The Orchard, which holds a catalog of over 1 million songs. For the time being not all of The Orchard’s music labels will be taking part in the deal, but Amie Street hopes to have them all finalized in the near future.

Amie Street offers musicians a unique marketplace that scales prices according to how many times a song has been purchased. Fledgling musicians trying to establish an audience will likely see their songs sell for only a few cents, but as they grow more popular song prices increase to up to 98 cents (Amie Street gets the first $5 made by each song, musicians keep 70% of any revenue thereafter). They’ve been one of our favorite startups since launching in mid-2006.

The deal marks a huge win for Amie Street, which has gradually been able to establish itself as a destination to discover new music, especially when compared to more traditional stores like iTunes and Amazon. The Orchard features a long list of notable labels and artists, and while it’s currently unclear how long it will take all of them to sign on, it’s clear that flexible pricing is being accepted as a viable business model by the music industry.

In March New York Governor Eliot Spitzer’s predilection for high class call girls was splashed across the media worldwide and his favorite hooker of choice was Ashley Alexandra Dupre. Between tricks Dupre dreamed of a singing career, and her outlet of choice was Amie Street. Dupre’s two singles not only broke Amie Street records for sales volume, she also delivered a massive bounce in traffic for Amie Street. By the end of the month Amie Street’s traffic had more than tripled according to both Quantcast and Compete (charts available on Amie Street’s Crunchbase page here).

There’s no later traffic data to see how much of Amie Street’s new traffic stuck around, the bump certainly didn’t hurt Amie Street’s profile.

See Michael’s January 2007 review of Amie Street here.

Marked as a first for national TV, CNN used Skype Video to conduct a live interview Monday. According to Reuters, CNN interviewed Jeffrey Toobin, who went to Harvard Law School with Spitzer, via Skype from Maui.

The report says that Toobin used a laptop computer and webcam borrowed from the business centre of the hotel where he and his family were staying. The interview was featured in CNN’s prime-time political programming, and Toobin took part in a discussion on Anderson Cooper 360, all via Skype Video.

Skype has long been used for IM and voice calls, but its still relatively new video feature hasn’t taken off in a similar way. With CNN being able to use Skype Video to conduct interviews and live appearances, Skype may now get a boost as a strong video alternative to existing video conferencing tools and companies.

On a related note, the hooker behind the Spitzer scandal sells music on Amie Street. 89c buys the rather ironically named Unspoken Words album with the feature single What We Want.

Update: Amie Street has added a new song “Move ya body” to the playlist. If you want to hear a famous hooker sing get in quick, the album was 29c 12 hours ago, it’s now up to $1.16. Your slice of New York history

The company’s business model is dead simple – Artists can upload their music for download on the site. Users download songs, with the starting price at free. When downloads pick up for popular songs, the price starts to rise, all the way up to $0.99. If a song gets to $0.30 or so, you know its popular. The artist keeps 70% of revenues after the first $5 in sales.

We’ve followed the company through its beta and launch periods. Until now, though, the company wasn’t doing much with all the pricing/popularity data they were gathering. Yesterday, however, they started allowing people to vote on songs directly (like Digg and the recently launched iJigg), and launched new areas of the site to show popular songs.

Amie Street has also released tools to help artists promote their songs, including an embeddable player for any song (see this MySpace page for an example) and a tool to allow artists to create Amie Street song stores on their own websites.

The company says they are currently in the process of raising a Series A round of capital. In this funding environment, I don’t think it will be very hard for them to close that round. All three of the founders, Elliott Breece, Elias Roman and Joshua Boltuch (pictured here) are still, I believe, in college.