SAN FRANCISCO (Business 20) - Sony (Research) hoped to turn its PSP handheld gaming console into the next big portable entertainment gadget by getting studios to release - generous compared to the Apple (Research) iPod's 2.5" screen. But the PSP can only work with movies released in Sony's obscure UMD disc format, or with movies downloaded online. However, the fare online is very limited, and consumers don't want to buy both a UMD copy of a movie and a normal DVD that they can play on other systems. Indeed, Engadget notes that Warner Brothers' decision to cancel six scheduled releases for the UMD format highlights the problematic nature of Sony's unpopular, proprietary format. In fact, there are now rumors that Sony may create an adaptor that lets users play UMD movies on home entertainment systems in a bid to save the market.

Korea plans "open source" city

The Korea Times reports that the South Korean government plans to select a city and a university to run entirely on open source software, making it a model "Linux City." Following the lead of Munich, Germany, and other municipalities around the world, Korea's Ministry of Information and Communication wants to take advantage of recent reports that Linux, the free operating system, is both cheaper and easier to use than expensive and proprietary systems like Microsoft Windows and Apple's (Research) OS X. Many foreign governments are bristling under the conditions imposed by American software companies, and want more flexibility. Ko Hyun-jin, president of the state-backed Korea IT Promotion Agency, said, ``In order to become a genuine software powerhouse, Korea has no choice but to secure source technologies. We cannot achieve this goal under the command of dominant closed-source programs,'' With open source software, municipalities can tailor the systems for their own needs more easily. The ministry has reserved 4.1 billion won, or about $4 million US, for the project.

For Microsoft, what happens in "Vegas" doesn't stay there

Microsoft (Research) is testing an online program for parents code-named Vegas, which will allow them to make accounts for each of their children in order to monitor the websites that each child visits, according to Ars Technica. Parents will be able to measure the amount of time their kids spend on chatting, surfing and emailing, ban their children from individual sites they feel are inappropriate, and use pre-installed filters to block websites with sexual or violent content. The program is similar to the Family Safety feature that's part of the new Vista operating system, but Microsoft is making it available as a stand alone program independent of any operating system.

Sunshine in the PARC

Xerox's (Research) Palo Alto Research Center, or PARC, announced a partnership with start-up SolFocus to develop solar energy collectors that will convert sunlight into electricity at less than half the cost of the technology currently on the market, while using only 1/1000th of the expensive semiconductor material needed in solar cells. The announcement was greeted with enthusiasm by alternative energy watchers like WorldChanging writer Joel Mackower, who noted that Xerox's track record for launching successful technology is unparalleled: "Those competencies are not insignificant. After all, PARC is the birthplace of the Ethernet, laser printers, computer windows, WYSISWYG editing, bit-mapped displays, and the first commercial use of the computer mouse, among other things we now take for granted." The SolFocus system increases efficiency by using molded glass tiles like magnifying glasses to concentrate more sunlight onto the semiconductor material, which then turns it into electricity.

SAN FRANCISCO (Business 20) -GigaOm and Venkatesh note that Google seems to be testing it's click-to-call program, which connects web surfers and advertisers by phone. Searching for "hotels, New York," Venkatesh got an ad with a little green phone icon. Clicking on the icon prompted him to enter his phone number, which Google (Research) says it will use to connect a regular telephone call from the advertiser to the customer (without revealing the customer's number to the advertiser). AOL, a unit of Time Warner (Research), started running its own pay-per-call ad program last year. The advantage of these ads: Advertisers pay Internet outfits much higher fees for pay-per-call ads than for the traditional pay-per-click ads, because they are more likely to lead to sales. But Venkatesh feels Google's technology is lacking. Clicking on the ads, he noted, did not yet yield any further information about the advertiser, unlike in AOL's system, which sends surfers to a "landing page" that gives surfers details about the business they're dealing with.

Microsoft's sneak peak

The search-related advertising community has been eagerly awaiting Microsoft's (Research) version of contextual ads, but didn't expect anything until 2007 or 2008. Turns out, they may get a peak as soon as March. According to Search Engine Watch moderator Jennifer Slegg, Microsoft plans to debut its ContentAds program and the MSN adCenter platform in 2006 -- much sooner than expected. Slegg says that Microsoft has scheduled a session to describe the service during its March Mix conference in Las Vegas, where she will also speak. Although many welcome the competition to Google's AdSense and Yahoo's (Research) Publishing Network, some gripe about the boring name.

Pixar's cars

Pixar, recently acquired by Disney (Research), celebrated its 20th anniversary and showed off some clips of its upcoming feature film Cars at San Francisco's WonderCon cartoon convention last weekend. The movie is about the trials and tribulations of a rookie race car named Lightning McQueen, but mixed reviews are trickling in over the blogosphere, according to a summary by Cartoon Brews. Some thought the computer-animated film looked "cool," and "AMAZING," saying the details were "breathtaking," but others griped about the NASCAR theme.

Will Apple upgrade the iTunes phone?

When Motorola (Research) and Apple (Research) launched the ROKR, which allows customers to use iTunes to download and play music on their mobile phone, Motorola might have been a little unhappy about the simultaneous debut of Apple's much splashier iPod Nano, which is capable of carrying a 1000 songs, compared to the ROKR's measly 100. But the ROKR may yet have its day in the 1,000-song capacity sun. Engadget reports that a curious file-surfer found an image on iTunes that appears to be a mock up ad asking customers: "Want more music on your mobile phone with iTunes? Upgrade now."

SAN FRANCISCO (Business 2.0) -- Tesco, the U.K.'s largest grocer, has opened its first store-within-a-store dedicated to selling Apple Computer products. The display area in a cavernous store in Milton Keynes, north of London, features iMacs, PowerBooks, iPods, and accessories. For Apple (Research), this is the latest expansion of its retail presence overseas, and for Tesco, it's part of a continuing push to expand its sales into nonfood items.

Skype gets wireless

In Europe, where most cell-phone users pay by the minute for calls, the free calling service provided by eBay's (Research) Skype is seen as a big threat to the established wireless carriers. But 3, an upstart third-generation wireless network, sees a partnership with

Skype as an opportunity, not a threat. Since its subscriber base of 11 million in five European countries is smaller than rivals like Vodafone (Research) and T-Mobile, 3 has more to gain by signing up subscribers drawn by the appeal of free Skype calls than it has to lose in the way of calling charges. 3 representatives were careful to note that they don't think of the Skype calls as free, but rather bundled with 3's monthly network access fees, which is how 3 plans to make money off of the new subscribers. Skype and 3 announced the deal at 3GSM, a major telecom conference taking place this week in Barcelona.

The Googleplex keeps growing

Web analytics used to be a thriving business, until Google (Research) got in the game and started giving away services to track web traffic for free. The one complaint that bloggers like venture capitalist Paul Kedrosky have is that Google Analytics was too cumbersome for a simple blog website to use. Hence Google's latest acquisition, a deal to buy blog tracker Measure Map, which aims to deliver detailed information about a blog's traffic, measuring comments, links, and other signs of reader involvement. Kedrosky, who has tested the product, says he finds it easier to use than Google Analytics. The Measure Map deal could ultimately help Google expand the reach of its contextual advertising programs to more blogs. Of course, if Measure Map makes blogs better at serving up advertisements, that should ultimately help Google's ad sales.

Nintendo gives gamers more distractions

Nintendo is branching out of traditional gaming by enabling its DS handheld machine to work as a portable digital TV, and by equipping it with a version of the Opera browser. The browser will take advantage of the Nintendo DS's built-in Wi-Fi and dual 3-inch LCD screens, one of which is touch-sensitive and can be operated with a stylus. To allow users to type, the browser displays an on-screen keypad, but Slashdotters note that touch screen text entry is slow. The addition of TV viewing and Web browsing will undoubtedly broaden the DS's appeal.

SAN FRANCISCO (Business 2.0) -- The Winter Olympics normally aren't as big a ticket as the summer version, but two days into the games, NBC's Olympics website got 63 percent more pageviews than it did for the start of the 2004 Athens games. PaidContent says that this is primarily thanks to partnerships with Google (Research) and ESPN, as well as the spread of broadband and Internet video usage. Also driving traffic: NBC's Offthepodium.com, a youth-targeted website profiling athletes that avoids the network's peacock logo altogether.

Gamers heading for extinction

Nintendo executive Reggie Fils-Aimé points out a fascinating statistic noted in a Brandweek column: The ranks of teenage boys are set to dwindle, which has ominous implications for the videogame industry. The number of 5-to-9-year-old boys in the U.S. is 8 percent smaller than the number of 10-14-year-olds today, according to Census data, reversing a growth trend that has naturally buoyed console makers and videogame publishers. More worrisome, the industry's attempts to broaden its market aren't working, with casual gamers playing less frequently than they used to. That suggests that the industry ignores older gamers at its own peril. Rather than fight with Microsoft (Research) and Sony (Research) for more share of a dwindling market, Nintendo is now going after gamers over 35 with new games and a new console interface.

Oprah's million-dollar-an-hour deal

XM's (Research) $55 million agreement with Oprah has been hailed as a model of parsimony compared to satellite radio rival Sirius's (Research) $500 million deal with shock jock Howard Stern. But the UtopiaOverIP blog does the math and finds that for the actual time Oprah will spend on air, she's getting paid $940,000 an hour, compared to about $105,000 for Stern. XM's Oprah & Friends channel will only feature a half-hour of Oprah every week, with the rest of the schedule filled with shows by frequent guests like Bob Greene and Marianne Williamson.

Craigslist: Not on the block

Craigslist CEO Jim Buckmaster isn't in it for the money -- but no one seems to believe him. Facing a tough crowd in New York, Buckmaster deflected question after question about why the company hadn't sold out, saying he didn't want to have to travel with bodyguards ("I do," volunteered a wag in the audience). Intriguingly, Buckmaster, when asked how he'd respond to a hypothetical $1 billion buyout offer from the New York Times Co. (Research), suggested that Craigslist had actually been offered such a deal. "It hasn't happened as often recently," said Buckmaster. "But we're not interested."

SAN FRANCISCO (Business 2.0) -- Last fall, when Microsoft's (Research) Xbox launched, retailers tried all kinds of strategies to deal with shortages. Some Best Buy (Research) store managers hit on what they thought was a winning formula: Use high-pressure sales tactics to persuade shoppers to buy the Xbox in a bundle with controllers and other peripherals. Customers who came in to buy the $299 Xbox that was being advertised were told, "Sorry, we're out, but you can buy this $700 bundle instead." The move backfired, with customers complaining they were tricked into buying hundreds of dollars of gear they didn't want just to get their hands on a scarce Xbox. Now, UK tech website The Inquirer reports that an internal Best Buy investigation into the affair has resulted in firings, including a senior district manager.

iPods at 7-Eleven, but only in Japan

A gadget becomes truly ubiquitous when it shows up on convenience-store shelves. That's now true of Apple's (Research) iPod, which shoppers can now grab off of a rack at 7-Eleven stores in Japan. (Japan's 7-Eleven chain is more upscale and stocks more gadgets than the U.S. stores.) The stores stock the whole line of iPods, and at current exchange rates, the players are a few dollars cheaper at a 7-Eleven in Japan than they are in the U.S.

Watch out, eBay -- here comes Edgeio

On his Mashable blog, consultant Pete Cashmore calls Edgeio a "little eBay killer." That's a big threat to attribute to a just-launched startup, and Cashmore admits it's "hyperbolic," but there could be something to it. Edgeio plans to pull for-sale listings off blogs and publish them on its website. That's a change from other classifieds sites like Craigslist, which requires you to submit a listing through a form on its website, an annoyance which will grow as online classifieds sites multiply. (Microsoft (Research) and Google (Research) are already planning their own classified sites.) Edgeio's decentralized approach is a possible threat to eBay's (Research) auction model, which depends upon people coming to a central marketplace to buy and sell, with eBay taking a cut of the sales. One small problem with Edgeio's business model, which depends on people marking their for-sale blog entries with the tag "listing": Only about 10 blog entries a day currently carry that tag.

Wal-Mart, OfficeMax investigated in identity theft

Last week, Bank of America (Research) and Washington Mutual (Research) cancelled and replaced more than 200,000 debit cards because of a security breach at an unnamed retailer. News.com has learned that OfficeMax (Research) and Wal-Mart (Research) are under investigation in connection with the identity-theft incident. Wal-Mart reported in December that customers who bought gas from its Sam's Club stores in September and October may have had their card numbers stolen. An OfficeMax representative said that the company was unaware of any security breach.