I'm glad you mentioned Adwords, because that was my first impression. The thing is… I'm not convinced that it's a translatable metaphor. With Adwords there is a much deeper reach that benefits small businesses. If I'm a small, niche specific business, I know I can benefit from targeting a long-tail keyword because someone out there has a specific problem that they need a solution to and my business is built to address that problem.
I think that searches for music are fundamentally different. I'm not looking for a solution to a particular problem, In fact I don't really know WHAT I'm looking for- I just need options to sort through so I can find one that I like. The issue that arrises here is that 9 times out of 10, I'm going to start that search with something I know. This is where Pandora shines (to some degree) because I can say "I want to hear bands in the tradition of Black Sabbath" and BAM, I have a playlist of possibly good options. The problem I see with Earbits is that people are naturally going to start their search the same way, with bands they know. This means that popular bands/artists/genres will be the musical equivalent of keywords like "credit cards" in AdWords- Expensive and only cost effective to large companies with money to burn. All that being said, lets say I DID happen to give Earbits a specific search, do I really want the band that PAID to be here as opposed to the one that earned it by gaining natural momentum and fanfare? Am I getting value for this? More specifically (and importantly), is this a USEFUL method for me to find music I like?
Furthermore, what about the implications for small artists who blow their money on Earbits campaigns? Anyone familiar with the hype surrounding affiliate marketing would know that many a newb has blown their savings on unprofitable Adwords campaigns due to ignorance. Would you expect most artists to have the savvy it takes to run a profitable campaign under what is, essentially, the same business model?
Anyhow… These are just some thoughts. Who knows, maybe these guys will rock this idea and I'll be back here with my head between my legs. I'm just a concerned musician, that's all.