TORONTO - Entrepreneur Mike Dougherty envisions a day when people will listen to their car radio via a wireless Internet connection and be able to make song requests with the help of a hands-free device as they drive along the freeway.

We're still pretty far away from that, admitted the former Microsoft executive, who has attempted what he thinks is the first step in that direction with his San Francisco, California-based Web startup Jelli, which allows users on social media sites to control what gets played live on air.

We wanted to be the bridge between all that engagement that is occurring on social media, on services like Facebook and the social Web, and pull that into this radio station, said Dougherty, who co-founded Jelli 18 months ago with partner Jateen Parekh, a former Amazon executive who helped develop the Kindle.

Jelli uses a crowd-sourced model that turns the role of the traditional disc jockey on its head, allowing the listener, or group of listeners, to set the playlist. Popular music websites such as Pandora and Slacker already allow readers to vote on songs and control what gets played, but Dougherty said Jelli takes it a step further, giving surfers the ability to interact with a live FM radio station and take over the stick, as he called it.

Jelli listeners can vote for or against songs, directly through the website <www.jelli.com> or via Facebook and Twitter, and use video-gaming type power-ups and bombs to try to get their favorite tracks played or have tunes they dislike yanked.

If enough people hate a song and hit 'sucks' the song will blow up real time when the song is on the air and it will get taken down and the next song will play, said Dougherty, who raised a $2 million seed round from a mix of friends and family and angel investors, led by Philadelphia, Pennsylvania-based firm First Round Capital. The initial funding allowed Dougherty and his team of engineers to build a server and Jelli's cloud-based platform that is integrated with the radio station, containing its entire archive of songs and sound effects.

Jelli's first client was CBS San Francisco affiliate LIVE 105, which used the Web-station for its Sunday evening broadcast from 8-12 a.m. as a six-month trial run. The partnership was so successful Jelli's role was expanded to six days a week in the same time slot. Dougherty said Jelli recently became the No. 1-rated radio show in San Francisco - a top four market - during that time slot, and among the highly sought-after demographic of 18-34-year-old men.

That kind of validation with the ratings matters to any radio station when they hear about Jelli, said Dougherty, who in the last year has expanded Jelli into 17 cities across the U.S. I think over time we'll start seeing a rolling thunder approach there.

THE PITCH

Broadcast radio ratings have declined 30 percent over the last 20 years, according to the Radio and Internet Newsletter, but Dougherty said 236 million radios are turned on every week. CBS brings in close to $1 billion in advertising revenues from its radio properties alone.

By working with terrestrial radio stations, Jelli gets a cut of that radio advertising that airs during its timeslot. Dougherty declined to say how much Jelli's chunk of that is currently, but it has attracted significant investment, having just closed a Series A round of $7 million led by venture capital firm Battery Ventures, which incorporated the previous seed round.

Dougherty said the new funds will be used to double Jelli's staff, from 11 to more than 20, and expand its reach into all the top U.S. radio markets.

We want to make sure we have the Jelli experience in all the major 50 markets so that we can go to a national advertiser and they can sponsor this experience, said Dougherty, adding he eventually hopes to get into 250 markets. That's when we have some interesting monetizing opportunities.

Until then Dougherty will continue to tackle his biggest challenge of convincing a staid radio industry to transform itself - with Jelli's help - and make it more relevant and engaging to a Web generation that interacts with each other largely via social media.

So even with all that you still run into some inertia, because people are just doing things the old way, said Dougherty, who noted the new funding will help him knock down a few more doors. It will also force Jelli to move from the startup phase to a revenue-generating one in order to prove its worth to investors.

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