In 2004, when MySpace was still getting going, recording label executive Courtney Holt noticed that musicians were using the website to connect more intimately with their fans, through detailed blogs and behind-the-scenes photos.

Holt, then a marketing vice president with Interscope Geffen A&M, urged bands such as Nine Inch Nails, Weezer and The Black Eyed Peas to nurture MySpace profile pages too. The bands streamed new songs for free on their MySpace profiles, and some had the best album launches of their careers.

"The artists loved it and it created a Pied Piper effect for the fans," Holt said. Now, Holt is being asked to turn MySpace's attention to a music industry in flames - and in the process, to improve the mediocre finances of MySpace as it tries to fend off rival Facebook.

Three months ago, Holt, 40, took charge of the recently revamped MySpace Music, a joint venture with the major recording labels. The service now lets MySpace users queue up multiple songs to play for free on their profile pages, rather than one song as in the past. Users also can create playlists that let them swap songs with their friends.

MySpace Music overhauled its dedicated home page, which promotes album releases and tours and corrals five million blinking artist profiles into genres. And the songs now carry links that let people buy downloads of the tracks from Amazon.com Inc.

The set-up gives MySpace and the music industry a share of song-download sales from Amazon, and it could bring new revenue from ads.

Next, Holt plans to make MySpace into a seller of concert tickets and band merchandise, while better targeting songs, ring tones, artists and ads at the people who will probably be interested in them.

Among the challenges MySpace faces is that several other sites offer similar free music streaming online, including AOL, Yahoo, MTV, Pandora, last.fm and imeem.

Add to that, Google Inc.'s YouTube and Universal Music Group recently announced a venture that will show music videos supported by ads on a tailor-made player called 'Vevo'.

That could play to one of MySpace's strengths. After all, MySpace users helped popularise online music videos by embedding them in their profile pages. And MySpace Music has the right to stream music videos from all the major recording labels, not just Universal's. But that function isn't developed yet.

There are indications that the service is gaining traction. According to tracking firm comScore Inc, MySpace Music had 20 million US users in March, up 30 per cent from a year earlier. That vaulted MySpace from fifth to second place among the music entertainment sites, behind only AOL with 21 million.

Partly in reaction, third-ranked Yahoo, with 18 million users, revamped its music pages this month. However, Yahoo doesn't have a direct deal with the record labels, limiting the number of free songs that people can stream on the site.

MySpace Music has managed to gain an edge in some important ways. The site secured exclusive early free streaming rights for high-profile new album releases, from U2's No Line on the Horizon to Lily Allen's It's Not Me It's You.