What's Yaga's mission?

We enable publishers and small businesses who have not had access to distribution . . . to get their products distributed and to make money from their digital goods.

Is there really a market for digital goods?

We have about 1,200 publishers, and we have about 130,000 trial subscribers, and probably 100 actual humans who are paying us money. Now that the service is up we expect that to grow very quickly. I'd like to see more than 100,000 paying subscribers by the end of next year.

Will people weaned on Napster really pay for content?

Let's distinguish between free-free and free-stolen. Free as a business model is going away. The estimate that I heard was about three-quarters of content sites are losing money. The cash window on Wall Street is closed. These people are not going to get any more money. They have two choices: Go out of business or switch to a transactional model. Free-stolen from the music point of view is really the competition. But Napster is gone. Even if [its replacements] somehow survive, you'll find people who will be distributing viruses through them. The signal-to-noise ratio will drop to the point where I think honest consumers, if given the choice between stealing something that may or may not work and paying $5 a month, will pay $5 a month.

So who's making money with Yaga?

Our privacy policy forbids me from saying who they are. But, for example, a company in the online clip art business has done very well. A company that is an alternative music label has done very well. Some adult materials—that's not really a big surprise.