The Associated Press reported Monday that vinyl records have made a surprising return in some markets in the last year. A story about an employee at the Fred Meyer retail chain mistakingly ordering the vinyl edition of an album instead of the special edition CD with a DVD illustrates the impressive jump LP sales made between 2006 and 2007, rising more than 36% while CD sales dropped 17% due to increased digital downloads (CD sales remain hundreds of millions of copies higher though). The article also indicates that regional and specialized chains are not the only outlets selling LPs successfully, with both Amazon.com, Inc. (NASDAQ: AMZN) and Best Buy Co, Inc. (NYSE: BBY) creating sections and testing sales.

The resurgence in LP sales has also stoked the raging debate about differences between analog and digital formats. Melinda Merrill, a spokeswoman for Fred Meyer told the AP "It's not just a nostalgia thing, the response from customers has just been that they like it, they feel like it has a better sound." The AP also reports that sound is not a central factor in increasing sales. The experience of listening to an LP, much more involved than a CD or a digital file is drawing new listeners and keeping old ones. This tendency has lent to more sales of players and the pressing business has been renewed.

In the end, increased LP sales make it clear that consumers care about more than the music that is produced. Jay Millar, a director of marketing at United Record Pressing indicates that he feels vinyl is "for the die-hard music consumer," or the consumer that isn't looking for the most convenient method of acquiring an album and its music. Unfortunately, the mainstream music industry and its consumers will continue the push away from LPs and CDs, but if regional or independent retailers can keep the limited pressings intact via strong and surprising sales, then the history of the music industry and the "original" format that is as close to live music as you can get will continue to live.

Sir Richard Branson is selling Virgin Megastores to a management buyout team and exiting the music retailing business four decades after it helped him start on the road to becoming a mogul. Some odd, bold move or calculated business strategy? It's easily the latter.

With music retailing slowly morphing into an industry that uses internet downloads and digital forms of music instead of the physical CD, the move should not come as a surprise to anyone. From an economic perspective, the music industry worldwide is reaping what it sows as sales of $15 CDs are losing out to the 99 cent download. Plus, there are "subscription" music services where customers can 'rent' music for a monthly fee and never have to buy or carry another CD again.

Branson's move here, even in the industry that started his career as a global entrepreneur, has been timed perfectly. Branson, like most business owners, knows entrance and exit strategies with the best of them, and apparently he sees the brick-and-mortar music retailing business slowly becoming extinct in the iPod age.

Should other music retailers listen up? Most of them have, and have dropped prices on CDs to levels comparable to music downloads, or are using CDs as loss leaders to get traffic inside stores for other, higher-margin purchases. But, for Branson to sell off what was his business baby should signal a shift to the music retailers who have not listened so far: compete in the new internet music distribution era or perish.

Digital music sales increased 49 percent for the first 6 months of 2007 as sales of conventional albums continued their free fall, dropping 15% year over year. According to the Associated Press, "The trend away from albums and toward digital tracks has been going on for a few years, with industry insiders saying it is fueled by pop music's emphasis on hit singles. Consumers simply buy the songs they want and skip the albums."

There is essentially one pure play on digital music download sales: Napster (NASDAQ: NAPS), the name that started it all. If you want to bet on a recovery in brick-and-mortar music sales, you can choose Handleman (NASDAQ: HDL) or Transworld Entertainment (NASDAQ: TWMC).

Obviously the sales trends favor Napster more than Handleman but remember, markets are a discounting mechanism. Shares of HDL and TWMC are scraping all-time lows, and trading at substantial discounts to their respective book values. Of course that alone does not make these stocks buys, as their fundamentals seem destined to continue to deteriorate. The question investors have to ask is "Is the worst over?" Similarly, Napster shareholders have to wonder "When will the growth slow?"

The latest sales numbers are extreme. Is a 49% increase in digital music sales sustainable? No way. Will sales of CDs continue to decline 15% a year until they reach 0? That is a matter of some debate, and it's entirely possible that companies like Handleman and Transworld won't exist in 10 years, and will continue to bleed red ink until that happens. That's not a stock that I want to own. But I also wouldn't want to own shares of Napster which continues to lose money in spite of rapid growth in the industry.

There's no question that the music industry is in the midst of huge changes, but I can't find a stock that makes me want to get involved.

In a move to appease officials of the European Union, Google Inc. (NASDAQ: GOOG) has announced that it will again shorten the amount of time it keeps individual user statistics. Previously, Google kept user data indefinitely. It then shortened the time frame to a maximum of two years. Now, Google has again announced a reduction in the data retention time frame to a maximum of 18 months, but Google's privacy attorney Peter Fleischer, in a letter to a group of officials advising the European Union on privacy policy, cautioned that the time frame may need to be increased again to conform with future data retention laws.

So, when thinking about Google and what data it may or may not be keeping about you, bear in mind that in some ways it is duty bound by law to keep those records. Not all data retention issues are decided at Google's home office. Google knows full well that for its own consumer profiling purposes a 120 day time frame is quite sufficient to create a profile that would successfully outline a consumer's habits and enable Google to then provide personalized data returns based on those usage habits.

If you're nervous about what data may be kept regarding your internet usage habits, you're better served by taking "Big Brother" to task about it rather than Google. In most instances, it's a matter of government regulation and it's not just a Google issue.

Next time my Mom threatens my Dad to toss his hundreds of vinyl LPs that he's collected over the last 20+ years, I am going to direct him to the latest in turntables -- one that allows users to convert LPs to digital files directly from the platter onto one's hard drive.

Today's Sunday New York Times reports on two new consumer turntables on the market at $200 that will let one's memories re-live in a digital format, including the iPod.

One of the new turntables is called the Ion iTTUSB Turntable with USB Record and it is listed for $199, but can be bought for around $150 on Amazon.com, Inc. (NASDAQ:AMZN). This turntable is compatible with Macs and PCs. However, one downside is that the process of converting these old LPs can be time-consuming. The turntable has to be assembled properly and the LPs must be thoroughly cleaned. The recording software which comes on a CD takes about a half hour to set up properly, and may take even longer if you have a slower learning curve.

I know my Mom will be relieved to know that there's hope that the many apple crates packed with LPs gathering dust in our basement may soon be gone. (Though I think my Dad cherishes the album cover art as much as he does the music, so the battle may not be totally won.)