I’ve been watching developments in this field for a while. The process I use most is the sending of a track to a vocalist to add record their part which they then transmit back to me. I then compile the finished mix. Actual online collaboration has been attempted by several software producers but has never really worked properly. However, I’m seeing some developments that look promising.
First there’s Soundation http://soundation.com/ – this looks pretty basic but there area a couple of very interesting points. Firstly you can import and export Midi files and I can see right away that you could collaborate online and then use the Midi files to drive more sophisticated software on your own computer. What looks really promising is that you can launch Soundation in a Google Hangout and collaborate with up to 9 people whilst communicating in sound and vision.
Another hot contender is Ohm Studio http://www.ohmstudio.com/ which allows collaboration in the cloud but also gives you a DAW (Digital Audio Workstation) which you also install on your computer. The next version of the software will allow offline editing of your music.