So much for felling the giants.

Michael Robertson, CEO of


, is prepared to blink. Don't get him wrong: After a federal court ruled against's accumulation of songs in a database for its service, Robertson still thinks he'd be vindicated in a higher court.

But he told a Wednesday audience at the

Chase H&Q Technology Conference

in San Francisco that has been trying for four weeks to give up the fight. "I cannot spend three years in court," he said. " is motivated to make a business settlement. So are the record companies."

The San Diego-based firm has built a database of recorded music by purchasing 1,000s of CDs. The service then allows its users to download the audio files from the Internet. Although the company claims that it first requires authentication that users have purchased the music by having users place the disc in their computer, the record industry maintains that the company's library violates its copyrights.

In Robertson's estimation a deal would include offering "some sort of monetary compensation" to the record labels for the privilege of housing their songs online. In the meantime, he said has taken the labels' songs out of its database.

Two weeks ago, a U.S. District Court ruled that's song database violated record companies' copyrights. Robertson insists that is developing lucrative channels for the resale of music, despite record industry protests that he's stomping on their CD revenues.

Robertson insists he can help the music industry make follow-on money on its music, repackaging it for additional sale. He regaled the audience with a model that mimics the movie industry, with a revenue stream from the box office, pay-per-view, video rental, cable TV and broadcast TV sales at decreasing rates. But he has to get them to stop suing him first.'s record-company foes include

Time Warner




(SNE) - Get Report

, and the

Universal Music Group

(VO) - Get Report

.'s stock price fell to 7 after the federal court ruling -- painfully below its 52-week high of 105. The stock finished Wednesday trading at 11 7/8.

Tish Williams' column takes at look at the people who make Silicon Valley tick. In keeping with TSC's editorial policy, she doesn't own or short individual stocks, although she does own stock options in She also doesn't invest in hedge funds or other private investment partnerships. She breathlessly awaits your feedback at