Web-only music, movies and video game retailer CD Universe reports sales growth of 20.5% for 2007, which it attributes in large part to ongoing search engine optimization it performs in-house. We’re always optimizing search engine marketing especially in the fourth quarter, which is big for us, says John Salai, marketing director. The company, No. 190 in the Internet Retailer Top 500 Guide, gets most of its traffic from natural search, he says.

CD Universe closely tracks conversion from search engines, Salai says. If it drops we look at where it happened and what might have affected it. Then we make a fix — or roll back from a change we might have made.

In 2008 the company will explore digital music downloads now that the top four record labels have agreed to end digital rights management restrictions, Salai says. Also on the agenda: expanding product offerings to include novelties such as T-shirts and other clothing and books related to its core products.

Salai says the company’s growth has been slowed in recent years by the effects of digital downloads; however, CDs and DVDs won’t go away. We still feel people want to hold a product, but it never hurts to expand the product line, he adds.