Seattle was once a hotbed of innovation in the digital music business, but lately it seems like some of that action has dried up a little bit. That may change with iLike, the new venture headed by Hadi Partovi, who resigned as manager of the MSN portal and content group last October, and his twin brother, Ali.

The Partovis are working on a software application and service called iLike to help iPod and iTunes users organize their music and discover new songs based on their interests. It's designed to work smoothly with Apple Computer 's products.

Hadi Partovi told me yesterday that the company isn't going exclusively with Apple, but the iPod platform is the most logical one to work with right now, given its market dominance. Later on, iLike would expand to other media-player systems, and given Partovi's employment history it's a good bet he's looking closely at Zune possibilities.

GarageBand.com, iLike's parent company, announced today it has received $2.5 million in equity financing from investors that include well-known venture capitalist Vinod Khosla and MTV co-founder Bob Pittman. The money will mostly be spent on developing the engineering team and the iLike product, Partovi said.

These days, $2.5 million isn't a whole lot in financing deals, and I asked David Weiden, the general partner at Khosla's VC firm why the investment in GarageBand wasn't bigger.

"We encourage people to raise just what they need to run their business and that's it," Weiden said. "That's just what they did. They're frugal and they're creative and they really focus on just what's necessary to build a great business."

GarageBand.com is technically headquartered in San Francisco, but the company splits its 15-person staff between that city and Seattle, Partovi said.