Editor’s note: Guest contributor Amit Shafrir is president of Badoo, a social network for meeting new people based in London with 130 million users.

Silicon Valley is famously, and rightly, proud of its place as the spiritual home for startups. And it has an inspiring and awesome track record that’s tough to beat.

However, as the recent Le Web conference proved, European tech hubs like London, Berlin and more recently Paris, can now also lay claim to breeding world-class entrepreneurs. There’s a sense that Europe is finally getting its groove on when it comes to startup innovation, and that’s exciting to watch and be a part of. (When even Chanel designer Karl Lagerfeld is getting in on the action, you know that Digital/Tech is having a moment…)

Loic Le Meur’s mission for Le Web—to bring the best of Silicon Valley to Europe—is a laudable one. As Loic says in this TCTV interview, European entrepreneurs are eager to learn from the best and the brightest in the US. And if you look at the headlines from this year’s Le Web, you’ll see the usual bold-faced American names, such as Google, LinkedIn, Foursquare, Twitter, Flipboard, and Instagram.

But hang on a second. Shouldn’t it work the other way around too? Shouldn’t we in the States also look to the European startup renaissance for ideas and inspiration?

After all, some of the most successful start-ups on stage at Le Web weren’t just the Valley wunderkinds, flown over to show the Euros how it’s done. They were the European companies that are innovating in the fields of commerce, lifestyle, and social networking. Not content with just providing local versions of Facebook or LinkedIn, they are creating new businesses for a sophisticated consumer audience. And proving they can be profitable.

With Spotify as a notable exception, there wasn’t a ton of excitement or buzz about those European startups over here. And I have to question why that is. I welcome your thoughts in the comments.

In the meantime, here is my own attempt to try and help redress that balance. Below is my own take on five of the European startups we should be paying closer attention to in 2012:

Social gaming:

Wooga: One of the hottest companies to emerge from the Berlin tech hub, Wooga is Europe’s largest social games developer and the third largest in the world. Wooga recently launched the mobile version of its game Diamond Dash, one of the top 10 social games on Facebook, and hopes to reinvent mobile game app distribution through smarter use of Facebook’s app notifications.

Online Music:

Deezer: Spotify might be making all the headlines over here, and they certainly had a good showing at Le Web this year. But French mobile music-on-demand site Deezer seems intent on giving them a run for their money, announcing their expansion to 130 more countries at Le Web, taking the total to 200 around the world. Interestingly, this doesn’t include plans for the US. Deezer’s CEO, Axel Dauchez, is focused on smartphone users and doesn’t see enough growth happening in the States compared to other countries and territories. However, this decision might be better explained by its competitors’ well-documented struggles with US music labels.

Soundcloud: Headquartered in Berlin, fast becoming a hub for the online music industry and with two Swedish founders, Soundcloud is one of the German capital’s most prominent start-ups. The company is growing at a rapid pace, with over 8 million people creating and sharing sounds across its platform. With its focus on the mobile platform and apps, Soundcloud looks set for an even bigger 2012.

Personal Finance:

Wonga: UK-based short-term online loans company Wonga (the name is a British slang term for cash) is on a tear and looks set to keep growing as the UK economy continues to falter and the need for such a service increases. Wonga closed a massive $117 million round back in February, for further expansion in the UK.

Photo-Sharing:

Eye-Em: Unlike the much-hyped Color, Berlin-based Eye-Em has seemingly found a way to make photo-sharing on your smartphone, well, a smart idea. It’s still early days, but the company is growing fast, and is another one to watch.

This list doesn’t even scratch the surface. I could add other more established names, like Rovio, creator of the hugely successful Angry Birds gaming franchise, or private luxury deals site, Vente Privee.

In short, Europe is no longer just imitating the Valley; it’s creating its own narrative for success. And as innovators and business creators in a global economy, the US entrepreneurial community should be sitting up and taking notice.

Map image by blogdroed.

Deezer, which in a press release quite literally claims to have “invented music streaming” four years ago (who knew!), is planning to roll out its music streaming services all across the globe in the next few months to reach a total of 200 territories by June 2012. Not on the roadmap are the United States and Japan, because Deezer considers those countries uninteresting due to “market saturation and low growth forecasts”.

Details of the startup’s ambitious, global roll-out plans were unveiled at the Le Web conference in Paris, where Deezer will later this week celebrate the launch with an exclusive performance by The Ting Tings.

Read more at TechCrunch Europe.

The launch has been a long time coming, considering the fact that the startup has already produced a fully functional web client, and Adobe-AIR powered desktop client and applications for iPhone, Facebook and Boxee since its founding in late 2008.

Like Lala, imeem (which both recently got acquired, by Apple and MySpace, respectively) and other competitors like MP3tunes and Deezer, tunesBag allows registered users to upload their entire music collection to the cloud. This enables them to play tracks from anywhere as long as they have a working Internet connection and a browser.

There’s also a social layer wrapped around the music streaming and backup service, which makes it easy for users to share individual songs and playlists with others by e-mail or via social networks, as well as rate and recommend them publicly.

What about copyright, you ask? tunesBag claims it has all of that covered, as it will only make sharing features visible to people who are located in countries where sharing of tracks is legally covered by licensing agreements, as determined by their IP addresses. As a substitute, the service will attempt to fetch the music from other sources (e.g. YouTube to let other people stream songs you wish to share with them). This isn’t fail-proof, of course, which tunesBag acknowledges.

As an example, I uploaded Depeche Mode’s Enjoy The Silence to my tunesBag account, and the public link to it will not effectively give you access to the track I uploaded, but to a video that features the song as the audio layer.

I hardly think this approach is going to stop the record industry from taking a very critical look at the fledgling company’s offering, although they appear to be serious about closing deals for more countries in 2010 (the service is already available in multiple languages, by the way).

TunesBag has adopted the standard business model of most digital music startups: advertising, selling premium services and affiliate revenue.

The startup offers a basic, advertising-supported version of the product for free with 1GB of space, or an ad-free version with more storage space for your music (up to 200GB), higher streaming bitrates and a desktop uploader. The company also hopes to generate revenue from referrals for music purchases, event tickets, etc.

In case you’re not familiar with Grooveshark: it’s a great web-based music search, play and management tool that’s been around since April last year. You can use the app to instantly look for, share and listen to music, and there’s the quintessential social component that allows you to interact with people from its community and discover new music from others’ choices.

With the new look, Grooveshark’s design is now more desktop client-like (think Spotify, Deezer or Imeem), which in my opinion is a good thing. The overall design and the new navigation bar on the side make for a much smoother user experience, and you can switch themes to make the app fit your mood or resize the menus to fit your screen.

But the back-end tweaks that have increased the speed of the application are what’s making me seriously considering switching to Grooveshark for most of my online music needs. Playback between tunes is now seamless, with no more lag in between tracks when you’ve added multiple ones to a playlist. Switching between menu items and tabs is as fast as I consider possible inside a browser. In short: great new design combined with an excellent user experience.

Grooveshark is still struggling to get all major music industry players involved for the ‘legalization’ of its vast content library, which is in large part put together by avid users uploading music files straight from their hard drives. So far, the only one it has signed up is EMI and that was after the company sued Grooveshark over copyright infringement.

Music plays a large role in our lives. Since the web now plays an even bigger part, combining the two together has become unavoidable. The greatest thing about this powerful duo is that you don’t need to spend a lot of time searching for music you like  — just use this nifty guide list and you’ll find just about everything you need to enjoy hours of good music. The sound quality changes from service to service, but overall, it’s good enough for regular web usage.

Please note that this is a list of services that you can use over the net without the need to download anything to your computer. This is why I’m not listing any P2P software: i.e., Spotify, as well the fact that most of us can’t really test it or use it for all that matter. This is also only the first half of this guide; part two will include more web music players (including MySpace Music, Streamzy, and others) as well as music search engines and services that make it easy to share songs on Twitter and other social sites.

Music Recommendations:

Pandora is a service that can be used only in a specific locale, this one being within the U.S. Luckily, I had the chance to test the service when it was first released and became available to everyone. Launched way back in July 2005, the project had been in the initial testing phases for five years prior to launch date. Pandora recommends music to you by matching similar musical attributes. All you really need to do is choose an artist or a band you like, and Pandora will do the rest. Pandora delivers high quality 128Kbps audio streams, offering recommendations similar to the artists you have chosen. Pandora’s player looks like a radio, you can open up to 100 stations and navigate through them quickly. Registering for Pandora will provide you with a free account (advertising-supported). Free Pandora accounts will play up to  40 hours of music for free per month, you also have the option to pay 99 cents for unlimited listening hours for the rest of that month, or pay $36 to upgrade Pandora for one year. If you want to download music from Pandora, you can do it through iTunes or Amazon. You can see our past Pandora coverage here.

With almost 3 million unique visitors a day, Last.fm is one of the most powerful social music communities on the Web today. Like Pandora, the service allows you to enjoy music that you like, but unlike Pandora, Last.fm analyses what you and your friends listen to and like, and then suggests more music based on that analysis. When you recommend music to a friend or you tag it, or you write about it, or simply just listen to it – you shift the song’s importance on the site, and will in turn get recommended to more people. Based on the music you’ve already listened to, Last.fm will recommend new music you might like, as well as suggest other users with a similar music taste to yours, which you might be interested in friending, and you can also easily communicate with them. If you live outside the U.S., U.K. or Germany, you can listen with a free 30-track trial or subscribe for a low price of $3/month for unlimited radio streaming. (Launched in 2002!)

This is how BlogMusik, looked in 2006, and this is how Deezer (formerly BlogMusik) looks today – pretty impressive change, don’t you think? The French-based service is one of the largest and happens to also be a very successful music recommendation search engine. Once registered here, you can create your personal profile and reach the Deezer community. You can create playlists, send messages to your contacts, leave comments, add artists and albums to your favorites, and more. But here’s what I like the most – The SmartRadio, which is an intelligent radio that automatically generates 3 hours(!) of continuous listening based on one artist – completely free. Priceless! You can see our past coverage of Deezer here.

I think the first Adobe AIR application that I ever tried was Finetune. Finetune provides you with the most interesting new playlists of related music from your choice of artists. Besides the site’s community where you can browse, listen to music, create a profile, connect with other users and more, Finefune also has some cool feautures to complete their suite, and each tool gives you an extraordinary music experience. Take for example the Finetune Wii project (which can be played also over the web), it’s a great sight and sound for the eyes and ears. Just enter an artist’s name and Finetune will create a playlist with similar music that will play for hours. Best of all it’s free, and you also get an iPhone, Facebook and a Desktop app that all sync with your music playlist, no matter where you play it from. You can see our past coverage of FineTune here.

Also worth mentioning in this same topic group are, of course: Ilike.com (acquired by Myspace), and music.strands.tv

Independent Music:

Amie Street is a home for musicians. The service allows music fans to discover new and independent music. Visitors at the site can search for new music based on genre, region, or recommendations. Fans can also search for music according to its price -  Amie Street is actually the only marketplace where listeners determine the price of the music. How does it work? Every song is originally priced free or very inexpensive and increases in price, up to 98 cents, as more and more users purchase it. Musicians then get 70% of the revenue from each sale. Additionally, Amie Street matches you with music that you might like, for example: I couldn’t locate Coldplay on the site, but I got more than 70 results that sound similar to the band. Obviously, this exposes me to music that I’ve never heard before, which is always a welcomed experience. You can see our past coverage of Amie Street here.

Why is Jamendo one of my favorite music services? It offers the largest catalog of music under Creative Commons licenses – worldwide. And, not only are all of the albums free to download, there’s also a large chance you won’t know any of the artists. If you already have an open mind about music, surely it won’t stop you from listening to some new albums, right? The best way to find music at this site is to search by the genre tags. Found something that you like? You can review, comment, rate, share and as I’ve said download it for free.  The service is available in seven languages, and has an iPhone app that you can download for free. Business model? Yes they have one too.

SoundCloud is by far the best looking music application there is today. It offers a great interface, a great user-experience and above these all, great music! SoundCloud lets music professionals receive, send and distribute their music. The service allows professionals (and non-professionals) to exchange, and follow music and musicians at the site. It’s a full community where people can easily communicate with each other based on shared tastes, but it is also a place where musicians can store and showcase their music using high quality standards. With the free account, you can only upload 5 tracks maximum per month, but if you are an industry fanatic and you find this plan to be somewhat lacking, you can check the pro page for packages that are more suitable to your needs. See our past coverage here.

TheSixtyOne allows artists to upload their songs and lets thousands of listeners decide whether they like it or not. The most popular songs hit the front page. Think about it as a Digg for music, the more people heart a song, the higher it goes. The site connects musicians and fans, giving them all the tools to communicate with each other. For artists, it’s good place to promote their work. For anyone else, it’s a wonderful place to discover and support new music.

Create & Listen to Playlist:

I’ve never been very much of a Project Playlist fan, but I have to say it’s a good service. Ultimately, it’s a community based on playlists. You don’t have to register to be able to listen to the music, but once you do, you can start building your playlist and enjoy more features such as the Playlist IM, which is a chat system similar to Facebook where you can connect your ‘playlist’ friends or even friends from AIM, Facebook, Yahoo Messenger, etc. What else? You can write blog entries, upload photos, privately connect with other members, browse thousands of other music playlists, comment, share, and much more. My guess is that people use this site mostly to share their playlist on their blog/site or social network. Playlist allows you to grab a playlist code and embed it anywhere you want. One thing that bugs me though is that the member’s search feature is missing. Today, when everything is so connected to your identity, this is a must have feature. On the other hand, I was impressed to see they saved my playlist from 2006…

Jiwa.fm allows you to create personalize playlist and share it in the Jiwa.fm community or with friends & family. As a member, you are able to share, exchange, and explore music. You can also expand your tastes with the SmartRadio tool. I found this service to be unique in a way because no matter what you are doing at the site, it won’t prevent you from listening to your playlist, it just plays in the background. Amazingly, when you click on an artist from within a mixed artists playlist, it will automatically create an album playlist of that artist. You might find the site to be a bit cluttered at first time, but once you get it, it works like a charm – highly recommended.

At Jogli, you don’t really need to create a playlist – they create it for you. Think about it as a giant web-based CD store where you can search for an artist, see all of his/her albums, and then listen to them exactly as listed in original CD  Let’s take Michael Jackson for example: Here you can find all his discography, and listen to his CDs one by one. Clicking on the button ‘Play Radio’ will open a radio station generated from music you might like from similar artists. As a registered member, you are able to save playlists, write reviews, and more. You can also import your playlists to Last.fm or iTunes to make it a video playlist. Check out our past coverage of Jogli here.

MixTube would have been better and easier if they allowed you to search for Youtube videos on their site to create a playlist. But no, you have to supply them with a Youtube URL, which means, you’ll have to go directly to Youtube, search for a song, then copy-paste that song URL back into MixTube. Thus, I found it to be frustrating. But looking at the bright side, you can always search for someone else’s playlist, and save yourself time and agony. One word about the Youtube music integration – lots of services use it, but unfortunately, it doesn’t offer you much control of your playlist, and what plays today, may not play tomorrow..

Lala is another great music store/playlist maker that we’ve covered extensively since the site relaunched last year. It allows users to listen to any song they want one time. If you want to listen to a song more than that, you buy a 10 cent ‘web song’ that lets you stream the song from the cloud as many times as you want (you can also purchase a full download of the song as you would from iTunes or Amazon). The site has a great integrated music player and a variety of pre-made playlists built by other users.

Worth mentioning: Imeem, and Maestro.fm

Music Visualization:

There’s no doubt in my mind that Musicovery has a strong following of avid users. The site is an interactive and personalized webradio enabling its users to generate in a few clicks a musical program adapted to the various listening situations and their preferences. Their unique mood matrix proposes a relationship between music and mood in an ergonomic and attractive manner. I’ve submitted this item about the service to Digg in 2006 and it’s good to see the site still works . But things have changed. You have limited navigation if you’re not a pro user ($15/3 months or $48/12 months), but once you are – the sky is the limit. In any case, this service will blow you away.

CitySounds.fm is perhaps just a mashup site, but it’s a good one! CitySounds.fm collects music from SoundCloud and pictures from Flickr to create a wonderful music experience from a single page. You can listen to the latest music from cities all around the world. At the top are the most active cities and the list is constantly changing as new music is being created.

Web-Radio:

Very similar to Last.fm in concept, Jango allows you to create your own custom radio stations and share them with friends. Just type in what you want to hear – and your station will immediately play the music you want along with similar favorites of other Jango users who share your tastes. You can customize your stations further by adding more artists and rating songs. Each artist get a page, containing the web-radio, the music playlist, biographies, events list, comments from members at the site, and fan list for easy communication. The service claims to be legal and says it pays royalties due to all labels/artists every time a song is played. Moreover, Jango runs a program called Jango Airplay. This program gives emerging artists an unprecedented opportunity to be proactively exposed to the millions of visitors at the site. See our past coverage of Jango here.

RadioBeta is an efficient way to locate radio stations in your area or around the globe. You can search stations by geography, genre, band, language or tags. You can listen without signing up, or you can log in and create your personal dashboard with favorite stations that  you can then listen to on a daily basis. We mostly hear radio on the go, but now you can easily track your favorite radio stations on the web. All the radio stations are public so you aren’t asked to pay anything to use the site.

OK, TheRadio is also one of my favorites because of its simplicity. Entering an artist or a genre gets you custom channel, but if you go over the channel listing, you will find much more interesting suggestions. I don’t know about you but I actually like when someone else picks the music as long is it in the range of my request. Anyway, TheRadio does a great job on finding music that I like – it simply works.

Aupeo fits in the Recommendation list as well as this category. The service lets you experience music in a fours different ways: by Stations, Artist, Mood, and Personal. The Stations area is pretty limited if you don’t have a pro account, but you can still get the feel of it. In the Artist zone, you enter your favorite name and choose from a variety stations suggested. The coolest way is the Mode area, which plays music based on your chosen mode. These stations are created by music experts, says Aupeo.  The Personal station streams music based on your music behavior at the site. Overall, very intensive and powerful!

Worth mentioning: Tun3r, Mugasha, and  Play.fm

That’s it for Part 1 of this music guide. If you have any other suggestions related to these groups, you are more than welcome to add them in the comments. In the next part of this post, I’ll offer the best options for Music search engines, Music web-players, Twitter-Music craziness, and more. Stay tuned!

Image by RossinaBossioB on Flickr.

While you’d think the main advantage of a download is portability, most people won’t be able to take songs off their computer because they use iPods that can’t play the WMA files. See more details in our earlier coverage.

The songs come from some pretty unique deals with the big labels UMG, EMI, and BMI. In exchange, labels get a share of the ad revenue and affiliate song sales on the site and the comfort of control through the service’s DRM.

However, SpiralFrog was over a year in the making and only officially launched last September. A lot has changed since then. Music prices have dropped, DRM is dead (for paid tracks at least), and new legal/questionably legal sites have popped up to serve up free tunes. Competition includes HypeMachine, RadioBlogClub, Deezer, InTune.fm, Mog, Last.fm, Imeem, and a bunch of other sites. One key difference is that users on these sites stream music instead of downloading it, but that doesn’t seem to be slowing down their growth rates. Imeem, which follows an ad splitting model similar to SpiralFrog, did over 3 million monthly uniques around the time SpiralFrog launched last year. Lets not forget that Yahoo may be treading in this territory as well.

Three that we’ve been tracking are SeeqPod, Songza and Skreemr.

All three index the web, or parts of the web, looking for music files that people have uploaded to servers. Users search by artist or song. MP3s or other non-DRM sound files with metadata matching the query are served as results.

Unlike sites like LaLa, Imeem and Pandora (and many others), which are all trying to play by various RIAA rules to deliver music to users, music search engines generally don’t pay royalties of any kind. The music itself is never on their servers, so they have significantly less copyright exposure. More on that below.

Of the three, Seeqpod is the most useful. It has an index of 8 million individual songs, auto-spell checks queries to find common misspellings, and allows users to create playlists. Seeqpod also has embeddable players, and will try to find music videos of songs you are playing. Seeqpod, by the way, was originally a project of the Lawrence Berkely National Lab.

http://www.seeqpod.net/cache/seeqpodEmbed.swf
SeeqPod – Playable Search

Songza also allows users to create playlists and provide embeddable players.Skreemr has bare bones functionality and the hit rate is a little iffy. But they have one feature that the others do not – a direct link to the file on the third party server. That means downloading the song to your hard drive is just a right mouse click away.A fourth company, Deezer, changed its model in the face of litigation in France.

Copyright, Schmopyright

There’s no reason to mince words here – the music these sites are playing is almost always copyright infringing. But it’s distributed on servers unaffiliated with the search engine itself, making it effectively impossible for the RIAA and its international equivalents to do much about it other than try to force the largest infringers to remove the content. That’s because there is little recourse against the search engines themselves.

None of those legalities affect the search engines, though. It’s unlikely that under current U.S. law the RIAA can do anything at all to stop them.

Current case law gives a lot of leeway to search engines. I spoke this evening with Andrew Bridges, counsel for Google in Perfect 10 v. Google. In that case, Google was held not held to be infringing the copyright on images just by displaying a thumbnail of the image in search results.

The same arguments are valid with the music search engines, says Bridges (with the caveat that he’d have to look much more closely at the specific facts of any case).

The services may still be liable for contributory infringement, he says, but there just isn’t any definitive U.S. case law on matter yet. And no statutes cover contributory infringement.

So for now the search engines are free to link to infringing songs, and even stream them on their site. Just so long as the songs themselves are never stored on their servers. That’s good news for Deezer, Seeqpod and Skreemr, and the users who’ve come to rely on them.

BlogMusik will announce tomorrow that they came to an agreement with the SACEM, clearing the service of copyright infrigement accusations. The details of this agreement are not are not being disclosed, but other deals suggest it is based on a revenue sharing mode. BlogMusik’s business model is relying on advertising and affiliate revenue coming from the sales of songs on iTunes and Amazon. This agreement should cover BlogMusik for any music they host wherever the music is listened from. However they still have to come to an agreement with organizations representing majors and labels (Pandora had to face new webradio rates imposed by the RIAA). This is being taken care of according to the CEO of the company and new agreements should be announced soon.

All in all this is a good news for BlogMusik The company now has an opportunity to become a true free legal alternative to listen to music on the internet. Unlike Pandora this is a music on demand service where you choose the titles you want to listen to (although you have a smart playlist option to generate automatically radios out of a song or an artist).

BlogMusik.net will also change name and become Deezer.com. This is a good thing i had a hard time getting the UR/nameL right with this “k” in the middle (not mentionning the .net).

RadioBlogClub, another popular french service was forced a few months ago to change hosting provider following a complaint sent by the same SACEM. The service was interupted a few days and opened again as fresh as new. To date no official licensing agreement was made with the company.