But it would eventually have a devastating response to its competitors.

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Unlike its competitors, Tower has a novel response: It's going to give its music away on the Internet.

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Michael Arrington, editor of the influential blog TechCrunch, tipped the pot on a simmering controversy in September when he accused a prominent group of angel investors (whom he calls "super angels") of colluding to keep competitors out of deals and hold valuations down, partly in response to Graham's newly empowered students.

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