I wasn't trying to say that Groveshark did anything illegal, just most of the songs there (and all those I had seen) didn't seem to be licensed (mostly because they where available in multiple copies). I assume that the uploads was done by users, not Groveshark.
We are a completely legal business. We follow federal dmca rules and if you want something taken down you can notify us and we'll remove it within 48 hours. We are also in the process of negotiating with all major labels. We like to think that we help new artists get discovered though. We have a very good analytics solution that tracks the number of plays new artists get and present the results in our Grooveshark Artists section. New artists can also pay for Autoplay campaigns and we'll circulate their songs into users Autoplay sessions.
I have simply not seen one of those new artists, but that is definitely a good idea.
If you get an agreement with the major labels, I will become a paid subscriber. It would be one of the greatest things that have happened to music in this millennium.
Part of it is just not having a good way of offering those recommendations when you're in the midst of an Autoplay session, which is going to change in the next launch cycle as we implement our new algorithm.
As for the major labels, keep your eyes peeled. We're working hard on that end. We know it will be a critical component.
You're very casually making a serious accusation. Can you offer any evidence that Grooveshark is doing something illegal?