Multimedia magazine: 2-Way Media's interactive publication, Launch, was one of the only products in its genre to survive - and now it's headed for the Internet.

When David Goldberg and Robert Roback were schoolmates in Minneapolis, neither had any intention of working together in the interactive music business.

Goldberg landed a job as a management consultant in Boston while Roback became a Chicago lawyer.

It was only after Goldberg - who by then had moved to L.A. and was working as a marketing strategist for Capitol Records - saw a niche for a computer-based music magazine that he called up his old buddy Roback and proposed they go into business.

With some backing from friends and family - what Goldberg calls "the MCI method" of starting a business - they set up shop in a small Santa Monica office three years ago.

Today, Goldberg and Roback head up 2-Way Media Inc., a company with $3.5 million in 1997 sales whose main product has been Launch, a CD-ROM music magazine.

And two months ago, 2-Way Media took the plunge onto the Internet, acquiring Firefly Networks Inc.'s Web site as its online vehicle. As an online music magazine, myLaunch (www.mylaunch.com) offers articles, reviews and music samples that most of the other online music retail sites - such as "CDnow" - do not.

Launch, the CD-ROM, blends elements of both a traditional music magazine and a CD-listening bar, and has a heavy emphasis on what it calls "non-top 40" rock music.

The CD-ROMs, which are mailed out to subscribers and music retailers six times a year, contain articles, interviews, musician profiles and reviews just like Rolling Stone or any other music magazine in paper format.

But unlike a print magazine, the CD-ROM allows users to actually listen to selections from new releases or collections. And unlike an alternative music radio station or an MTV or VH-1, the user can instantly skip over songs or artists they don't want to hear without switching stations.

One recent issue of Launch, for example, features an audio interview with Canadian singer Sarah McLachlan, interspersed with samples of her music, as well as a live, acoustic video performance by Meredith Brooks and music reviews - with samples - from new albums.

"We saw this as an opportunity to use the computer to introduce new music to people in an interactive way," Goldberg said.

But the business of selling CD-ROM magazines, which seemed so promising three or four years ago, has largely fizzled.

"The CD-magazine concept never really caught on that well," said David Card, a computer and Internet industry analyst with New York-based IDC/LINK.

Launch has been able to succeed with the CD-ROM format primarily because it has managed to attract big-name advertisers, including Sony Corp., Levi Strauss Inc., Toyota Motor Corp. USA and ABC Television. Sixty percent of its revenues come from these and other advertisers.

"Toyota, which always wants to be on the cutting edge of all media, wanted to experiment with this medium and found that it was not expensive to do so," said Alan Segal, associate creative director for interactive media with ad giant Saatchi & Saatchi Pacific, whose largest client is Toyota.

The remaining 40 percent of revenues come primarily from subscriptions, which have grown from 75,000 in 1996 to 200,000 for the November/December issue.

Still, Launch's revenue growth has been relatively modest, from $1.1 million in 1995, its first full year in business, to $1.4 million in 1996 and $3.5 million in 1997.

Now, Launch is taking on the next computer frontier: the Internet.

"Launch has built a nice little business around the CD-ROM. But this has all just been a warm-up and pales in comparison to the opportunities available on the Internet," said Jamie Kiggen, managing director of institutional research for Boston-based Cowen & Co.

Revenues for myLaunch come almost exclusively from advertisers, because the online service itself is free.

So far, those revenues have been miniscule, since it has only been operational for two months. By the end of next year, however, Goldberg and Roback predict myLaunch will account for 25 percent of total revenues.

However, myLaunch is far from the only online music site. Besides the music order houses (such as NTK Inc.) and the musician fan club sites, other music magazines, such as Rolling Stone, also have a presence.

For now, MTV is Launch's biggest worry. Its Web site offers much of the same fare as myLaunch, including music reviews, news, feature interviews and a chatroom. And on Dec. 9 MTV launched "The Live Link," allowing visitors to its Web site to interact with guests appearing on MTV television shows in real time.

To compete with the likes of MTV, Goldberg and Roback said they are concentrating on trying to build the business. They are not seeking an immediate cash infusion; rather, they said, they are looking for long-term strategic relationships, some of which may involve equity stakes in the company.

Spotlight

2-Way Media Inc.

Year Founded: 1994

Core Business: Producing and distributing a music magazine on CD-ROM and, since November, on the Internet.

Top Executives: David Goldberg, chief executive and editor-in-chief; Robert Roback, president.

Revenues in 1994: $0(*)

Revenues in 1995: $1.1 million

Revenues in 1997: $3.5 million

Employees in 1994: 5

Employees in 1997: 40

Goal: To become the top independent music site on the Internet.

Driving Force: Soaring growth of the Internet.

* Company spent first year on research and development; started selling product in 1995.