December 26, 2000, 9:55 AM

A blue note goes gold

A pioneer among online music stores, CDNow plays to a crowd with insightful recommendations, convenience and selection.

The site owes its start to the Miles Davis classic, Kind of Blue. A decade ago, when then 19-year-old Jason Olim first heard it, he combed record stores for more recordings by the jazz legend, only to find poor customer service, little musical knowledge and slim pickings. There had to be a better way, and Olim found it. In 1994, he and his twin brother, Matt, launched CDNow in their parents’ basement.

Five years later, the e-retailer continues to build a better Web store. Its personalization features and powerful search engine allow shoppers to fine-tune the site to their tastes.” My CDNow is one of the better examples of one-to-one marketing on the Internet,” says Martin DeBono, senior analyst at Gomez Advisors.

Much like a music store, the Web site is jam-packed, but its categories and menus make navigation relatively easy. Other pluses include Favorite Artists, which provides information about sales, new releases, reviews and free song downloads from from major and independent labels. With so many personal touches, it’s surprising the retailer’s phone number is missing from the site.

Yet that’s not exactly putting a lid on sales or growth. CDNow posted 1998 revenues of $56.4 million, and in March it merged with N2K in a $522 million deal. Not bad for a basement start-up.

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