THE BROWSER: Truth and rumors from the tech world
Apple hit with patent lawsuit claims that iTunes infringes on its streaming-video patents. Plus: Search advertising faces a slump in prices.
By Owen Thomas, Business 2.0 Magazine online editor and Oliver Ryan, Fortune reporter

SAN FRANCISCO (Business 2.0 Magazine) -, a two-person Internet video company, has sued Apple, claiming that its iTunes and QuickTime software violate Burst's patents. Techdirt says the move was expected after Apple (Research) filed suit earlier this year to have the court declare Burst's patents invalid. Last year, Burst brought a patent-infringement lawsuit about Internet video delivery against Microsoft (Research), settling the case for $60 million after alleging that Microsoft tried to crush the company. Both Burst and Apple have hired big legal guns, setting this up to be a case the likes of which we haven't seen since NTP sued Research In Motion (Research) over the BlackBerry.

Search-engine ad prices slump

The telecom boom is back
Level 3's $163 million deal for ICG shows that fiber-optic networks are in demand again. Plus: Videogamers get a league of their own on TV. (more)

Online advertising felt a chill this winter: Research firm Fathom Online has released the results of its first quarter keyword pricing survey, noting that the average price paid for ads linked to search terms was down three percent, dropping from a Q4 shopping-season high of $1.43 to $1.39 in the depths of winter. But Fathom's "Keyword Price Index" is not without its detractors, however. On John Battelle's Searchblog readers lobbed arcane technical criticisms at Fathom. The bottom line: Keyword advertising remains the fastest-growing area of all advertising, with spending growing at an annual rate of 25 percent. And, for the record, on Yahoo (Research), you can buy the keyword "seasonality" for $0.21.

IRS duns Symantec for back taxes

Symantec (Research), maker of the popular Norton antivirus software, has long made a living off of warding off security threats. Following the news today that the IRS wants it to pay $1 billion in back taxes related to its acquisition of storage-software company Veritas, the company might consider redeploying some of its crack software engineers to the accounting department. Last week, before the tax news, CEO John Thompson acknowledged that the Veritas merger had been problematic, using an unfortunate analogy: "We're in the protection business, but not like Tony Soprano," he noted at a press event. Shareholders whacked the stock by 6 percent following news of the tax bill, which Symantec says it will appeal.

Backfence buys local blogging site

In a humbling end to a splashy launch, local-news website Backfence has taken over Bayosphere, a high-profile blog startup that tried to enlist Bay Area residents to cover local news. A year ago, the media world was abuzz over the promise of "citizen journalism" - the notion that local residents could report the news that mattered to them just as well as professional journalists. Following that promise, San Jose Mercury News columnist Dan Gillmor left the paper to start Bayosphere. Unfortunately, when it came to financial affairs, Gillmor proved to be a citizen businessman, admitting in a Bayosphere post that the website hadn't found a way to make money. Now, however, the site has found a savior in Backfence, which has launched local-news websites in several suburbs of Washington, D.C. Backfence, which didn't disclose the terms of the deal, now plans to launch its own Backfence-branded Bay Area website, with contributors from Bayosphere. Top of page

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