Twenty-four-year-old YouTube sensation Marié Digby, a singer-songwriter whose homemade performance videos have been viewed more than 2.3. million times, was outed in The Wall Street Journal this week for having signed a deal with Hollywood Records 18 months before blowing up online. Reviewers started out calling Digby's success a product of the power of social networking on the Web. Now critics say all Digby demonstrated was the power of the Internet to deceive.

Digby's record label helped develop her Internet strategy, advised her on what songs to post, and sent a high-quality version of the song she recorded (a cover of the R&B hit "Umbrella") to iTunes and radio stations. Digby fueled the story line personally by playing up the YouTube-phenomenon angle on the Carson Daly Show, even though she was booked for the appearance through Hollywood Record's PR department. Last month on her MySpace blog, Digby wrote, "I NEVER in a million years thought that doing my little video of Umbrella in my living room would lead to this. tv shows, itunes, etc!!!"

Nice try, but this is only going to backfire for Digby and Hollywood Records, said the Lefsetz Letter. "Once the über-beautiful Marié Digby is revealed to be just another young music wannabe, no different from any other major label priority, suddenly, there's nothing of interest left." The real lesson about the Internet here is that it's useless to hide anything nowadays—"the truth will be revealed online." So "guard your credibility very closely. Lose it, and you can't recapture it."

Sure, Digby's path to fame was "a little shady," said Jonathan Coulton on his blog, but it's not like it was completely fabricated. "You can't make this stuff happen without the music actually being good enough for people to like it, so all the Internet buzz was quite real in a way—many of her fans really did find her on YouTube, and they probably really did like her music." The most disappointing thing was "willingness of the media to push the spin even though they know it's not true."

Let's be honest, said the Toad Stool blog. This was a pretty clever strategy. Digby's "stripped down, no-frills approach that sounds like, well, like a girl in her bedroom playing for her friends," was a perfect match for the marketing campaign Hollywood Records designed for her. And this type of thing happens all the time. "Most entrants in 'make your own commercial' contests are wannabe directors/actors/creatives in search of an agent or job." What's the big deal?