Kerbango has also designed a console, which offers a slightly different experience. It doesn't require a computer, just a power outlet, phone line and an Internet connection. Simply turn on the purple-and-green boombox -- which costs about $300 -- and it will connect to the Kerbango Web site, which uses search engine-like software to troll the Web and index stations, checking back each day to make sure the stream hasn't disappeared. To listen, turn the dials. You can search by genre or location or you can spin away, browsing from among more than 4,500 stations.

These devices don't offer "anytime, anywhere" access; you can't go for a jog with your favorite station like you can with a Walkman or portable MP3 player. But both of these companies are looking to incorporate their software into other consumer electronics devices like set-top boxes, stereo receivers, clock radios and, yes, eventually cars. "We're focused on a little bit of software and little bit of hardware that can be inserted in a variety of places," says John Alfano, vice president of marketing for Sonicbox.

Like traditional radio, Web radio is free to listeners and will probably be mainly supported by advertising. But the business plans of Internet radio providers don't look a whole lot like their traditional brethren.

"The Internet turns radio economics on its head," says Marc Auerbach, vice president of marketing for Kerbango. "With broadcast radio, it costs a lot of money to get in -- you have to buy a radio tower; you have to buy the frequency from someone else; you have to hire an ad sales team. But adding an additional listener costs nothing. With Internet radio, the cost to get into radio is cheap but it costs additional money to add users."

For example, RealNetworks' start-up streaming package for a college-like radio station is free. The same is true at sites like Yahoo's Broadcast.com and Shoutcast, which act like clearinghouses for anyone and everyone who wants to broadcast online. But once stations grow, costs quickly multiply. KPIG, a rock station in Monterey, Calif., that counts about 57,000 listeners online and the same number via the airwaves, pays about $15,000 each month to maintain the bandwidth for its online streaming.

KCRW, a Santa Monica, Calif., public radio station known for its eclectic programming, loses about $75,000 each year on its investment in streaming, according to general manager Ruth Seymour. And no new purple-and-green boombox or car radio seems able to stem the rising costs of labor, archiving and bandwidth, she says. But she remains optimistic that if the folks at KCRW keep doing what they love, the fans and the money will follow.

"I don't see the future in terms of e-commerce; I don't see the future in terms of looking at screens," says Seymour. "We're all radio people here and we believe in it."

Her excitement seems warranted. While Americans are spending less time listening to traditional radio (9 percent less time in 1999 than 1998, according to Arbitron) some 11 million Americans listen to online radio each week, Arbitron reports. The growth in Web radio audiences has been a real boon to public and alternative stations, which can suddenly find listeners far beyond the reach of their broadcast signal. Some of these new Web listeners are even joining membership drives for the once-local stations. WWOZ, which plays lots of jazz and broadcasts from Louis Armstrong Park in the heart of New Orleans, now receives some 10 to 15 percent of its financial support from outside its local audience, says station manager Freedman. KCRW, which figures its online listeners represent about 40 percent of the station's total audience, finds its Web listeners are also contributing in droves, says Seymour.

But the online stations are finding new ways to earn revenue too. RealNetworks, Sonicbox and a handful of other companies are developing software that lets Internet radio stations swap ads on live radio broadcasts -- say, taking out an ad for a local car dealership and replacing it with an ad for a national product. And Sonicbox plans to offer a "buy" button on its device that links to a CD vendor.

Of course, not everyone is convinced that these little bells and whistles will amount to much on the bottom line. Some traditional broadcasters, like CBS, have not figured out how to make money streaming their programming online, so they just haven't tried the Web. "We're still looking for an optimum business model," says McClintock.

KCRW's Seymour is just as uncertain about the business model, but much more optimistic about its possibilities. "Do I think that in the long run that the investment will pay? Yes, I think so," she says. "But if you ask me how, I have no idea."

The Free Software Project
Read Andrew Leonard's book-in-progress on Linux and open source -- and post your comments.