When we reviewed Grooveshark last August, we called it "one part Last.fm, one part Limewire, and one part iTunes store." With the addition of Grooveshark Lite, the service is now also one part Pandora.

Grooveshark is unique for a few reasons. After scanning a user's music library via the downloadable Sharkbyte client, the site puts that music online. Anyone can then download the music -- for a price. A cut goes to the artist, another to the user who uploaded the track, and finally to Grooveshark. One of the service's real strengths, though, is its Last.fm-style recommendations that we've always found to be very good.

Grooveshark Lite leverages all the various bits of the Grooveshark service -- streaming music, paid downloads, music sharing, and recommendations -- and packages them nicely in a gorgeous flash-based player. Lite extends Grooveshark firmly into Pandora territory with a service that lets users build streaming playlists and download tracks directly.

I was keen to see how Grooveshark Lite would integrate with the playlists and music I already had on the service, unfortunately I couldn't get it to properly access my library. The site did display a message today that it "may be unstable" as the company rolled out the new Lite service, so perhaps that was just a hiccup.

Conclusion

Grooveshark's service was very attractive this summer when options for DRM-free music were limited. At the time, Grooveshark was one of the few places people had access to major-label, DRM-free content in a presumably legal manner. Since that time, though, Amazon MP3 and other services have dramatically changed the music download landscape. Grooveshark is smart to extend their service into streaming music. The company also recently demoed their analytics suite for artists and labels, MoneyShark, which is another smart extension of their core product.

Grooveshark is an exciting company in the P2P music market. Along with services like Amie Street, and Last.fm (which was acquired by CBS last spring) small companies are having a dramatic influence on how music is distributed and consumed.