The iPod phone has to be the longest-running Apple rumor around. But signs are mounting that Apple really is preparing for the launch of a so-called "iPhone," possibly as soon as August, according to Engadget, which is when Apple holds its annual Worldwide Developers Conference. Even normally tight-lipped Apple executives are dropping hints. CFO Peter Oppenheimer, quizzed by analysts on Apple's most recent earnings call about a cell phone, said: "We do not think that the phones that are available today make the best music players. We think the iPod is. But over time, that is likely to change, and we are not sitting around doing nothing."And last month, Apple released new iPod software, which hardcore iPod geeks dissected in AppleInsider's forums. They found tantalizing references to new iPod functions for displaying signal strength and call history -- telltale clues that an iPod phone could well be in the works.

Apple fans are in a predictable froth about the latest rumors. Rather than wait for Apple to roll out the product and launch a splashy marketing campaign, they're already creating their own iPhone ads. Here's one of the most popular ones -- just click to play it in this window.

The annual E3 conference is the main event on any videogame aficionado's calendar -- but now its future is in question, the gaming trade magazine Next Generation reports. According to Next Gen, the major console makers -- Sony, Microsoft, and Nintendo -- have decided the show's payoff in PR isn't worth its costs, and are going to stage their own events instead.

Ars Technica scoffs at Next Gen's story, but says that big changes are indeed planned for next year's event. E3's organizer, the Entertainment Software Association, fears that the show is getting too large and unwieldy, Ars Technica contends. The association is wary of following in the footsteps of Comdex, the once-popular computer trade show that spiraled into a fatal decline after major sponsors tired of the crowds.

Talk of a smaller, "closed-door" E3 could just be convenient spin for having to downsize the show after major sponsors pull out. But whatever the real story is, Ars Technica has one thing right: "The days of the big consumer technology trade shows are indeed passing."

More proof arrived today that in big media companies, not only is synergy dead, but the left hand doesn't know what the right hand is doing. Today, AOL is announcing a Friday relaunch of its would-be YouTube killer, AOL Video. The revamped site will first be available as a beta, and then roll out on August 22. Meanwhile, CNN is expected to announce CNN Exchange, a section of CNN.com where users can submit their own videos.

AOL, CNN and, for that matter, The Browser are all owned by Time Warner. But the company eschews coordinated efforts between its divisions these days. A recent article in the Wall Street Journal captured Time Warner president Jeff Bewkes' feeling about synergy: "While Mr. Bewkes thinks cooperation should be encouraged, he's blunt in assessing the synergy message his predecessors preached to shareholders: "It's bull-."

And while the two video services may have surfaced on the same day, there's actually little similarity between them. AOL Video looks to be a broad, mass-market entertainment play, part of the ongoing transformation of AOL into a content provider. (Time Warner is expected to update investors on plans for its AOL division on Wednesday.) CNN Exchange hopes to collect user-filmed videos to improve its news coverage. CNN had already begun to use YouTube clips in its on-air coverage of breaking news from the Middle East, notes News.com. Now it aims to source its own videos directly from viewers.

We can only hope this means video sharing will evolve into something more redeeming than Ask a Ninja.

It's been a bad year for laptop batteries. Apple, of course, has its "you can fry an egg on it" MacBooks, but the problem is clearly not brand-specific. In a widely syndicated report, the Toronto Globe and Mail recently tallied up the recall numbers, finding that "laptop companies have recalled more than 150,000 batteries since Jan. 1, 2005. Hewlett-Packard recalled 15,700 of them in April alone. Dell recalled 22,000 batteries in December and Apple recalled about 120,000 batteries in 2005."

Boing Boing resurfaced the flaming-laptops story this weekend, running some gory photos of "self-immolating" Dells. Even more worrisome, the problems don't seem to be limited to laptops. One singed Boing Boing reader tells of his near miss with a flammable PDA: "I can tell you that a PDA with a lithium-ion battery burst into flames without any warning, apparent cause or reason while I was wearing it, lighting my shirt on fire and singing some chest hairs before I quickly ripped my shirt off and tossed the whole thing into the kitchen sink."

Ouch. No wonder consumers' tempers are getting heated up. Lithium-ions are also suspected in the case of the UPS airplane that caught fire in February. Here's the irony of the situation: Just when laptops and PDAs had reached the pinnacle of svelteness, they suddenly require a bulky new peripheral: a fire extinguisher.

Photo by sizemoresr

Updated.

A story on iPod repairs that originally ran in the Miami Herald earlier this month and got picked up on the Chicago Tribune's Red Eye had a sensational quote from Apple spokesperson Natalie Kerris about the iPod's lifespan, reporting that she'd said iPods were meant to last "four years." The Tribune's Web story, published on Monday, prompted a number of reports across the blogosphere, including one right here in an earlier version of this post in the Browser. But on Friday, Kerris started telling bloggers that she'd been misquoted. Kerris claimed that she'd told the Herald that iPods are meant to last "for years," not "four years." That's one heck of a convenient homonym, but the Herald and Tribune ran corrections.

The report nonetheless raised the awkward topic of iPod failure rates, sparking conversation on numerous blogs. Kerris, for her part, claimed the iPod failure rate was a "normal" 5 percent, but the Tribune cited a Macintouch survey suggesting a higher number: "The survey reported a failure rate of 13.7 percent, roughly half of which were battery-related, while the other half were hard-drive-related." The newspaper then found another expert who claims 15 percent is the industry average for device failures. One out of six gadgets a dud? Is that really acceptable for any manufacturer?

The bottom line, writes Matthew Himmler at Bloggingstocks, is that Apple should worry more about the failure rate. Himmler, a self-described iPod junkie, points out that should the problems persist, the chances for Microsoft's Zune look that much better.

What do you think? Do iPods fail too often?

A bill aimed at keeping MySpace out of schools and libraries could well end up booting Amazon.com, Yahoo, and other major commercial websites off those computers as well. The U.S. House of Representatives on Thursday approved the Deleting Online Predators Act in a 410-15 vote, with the goal of keeping kids from logging on to social networking sites.

But the bill, if passed into law by the Senate, could end up deleting vast swaths of the Internet, ZDNet reports. It turns out that the social-networking features the bill targets, like creating profiles and engaging in online discussions, would require the blocking of any number of websites that let their users interact with each other on the site. (For that matter, the Browser could well end up banned, since it dares to let you, gentle reader, comment on our posts. Thanks, Congress!)

It's not just Web businesses that are alarmed by the bill. On the Cool Cat Teacher Blog, schoolteacher Vicki Davis argues that the bill is misguided, and will result in the blocking of her blog, where she tries to educate other teachers about using blogs as educational tools, from schools.

What do you think? Will the blog ban help or hurt education?

If you live in Detroit, the ads you hear on your commute could be coming from Google, News.com reports. The Web-search giant has struck a deal to sell radio ads for Greater Media, which owns 19 radio stations across the country, and the ads are already airing in the Motor City. It's the first radio deal for Google since it bought dMarc Broadcasting, which runs an automated system for buying radio-advertising time, for $102 million in January.

If Google's radio efforts spread beyond Detroit, it will be the first time the company has succeeded at selling anything other than Web advertisements. An earlier attempt at brokering print ads failed miserably, notes Bill Wise on MediaPost. But radio may be better suited to Google's efforts: The online bidding it uses to sell advertising works well for markets with some element of scarcity, argues Wise, and radio, with its narrow drive-time windows for reaching large audiences, is well-suited for such auctions.

At what The Register breathlessly describes as a meeting that "will go down in history," the U.S. government conceded Wednesday that it would give up its "control" of the Internet. The Internet Corporation for Assigned Names and Numbers -- the outfit that doles out domain names and numerical IP addresses -- has long been overseen by the Department of Commerce, an arrangement other countries find most unsatisfactory. Ars Technica, however, notes that the issue of U.S. dominance over the Internet comes up regularly, and that this week's concession makes no short-term promises. For now, "things are not about to change."

Naturally, the conversation is heated on Slashdot. Some applaud the internationalist spirit: "We actually did something in the spirit of cooperation with other countries," writes one wag. "I think my head is going to explode." Others are more cautious, however. "I fear that Internet regulation will devolve into Internet bureaucracy and politicization, a la the United Nations." Finally, some commenters are downright revolutionary: "I've often said that the only way you can solve most of the issues revolving around the Internet today is to make it a sovereign nation."

Who do you think should govern the Internet?

You'd think that coughing up $1.1 billion in small bills to Californians upset about its anticompetitive behavior would make Microsoft more cautious about its business tactics-- not to mention the recent pledge it made to play nice. But no.

Microsoft is pushing a new version of its Internet Explorer Web browser -- the very piece of software that got it into hot water with antitrust cops -- as a Windows "Automatic Update." That means Windows users will get Internet Explorer 7 whether they want it or not. (A post-publication update for the nitpickers: For whatever it's worth, Microsoft notes that it's adding an extra step to ask whether users want to install the automatically downloaded update, but the Browser maintains that it's highly unlikely the average user -- who just wants to click as fast he can to get rid of all the alerts his PC throws at him -- will pause to read the installation alert, let alone meaningfully consent to it.)

"This method of distribution is considered aggressive and is likely to result in the majority of users proceeding to install the application," writes VNUNet. Controlling the operating system on most of the world's personal computers sure is helpful when it comes to software distribution, isn't it? Rival Firefox browser has to take out ads in the New York Times to garner downloads.

The news came, very 2006-style, on Microsoft's IEBlog, where corporate IT types are now huddling with their questions. Even though Microsoft claims IE7 is more secure, for systems administrators, installing any new piece of software comes with headaches as they have to test how it works with all the other software their employers run.

Microsoft is providing corporate accounts with a blocker that prevents the automatic download, but installing that, too, is another headache for IT staff. So far, the Web reaction has been less focused on Microsoft's abuse of power and more on how to cope with the impending deluge of new, untested software. At least one commenter on Microsoft's blog, however, expressed his dismay at the move: "Very nice IBM, erm... Microsoft."

That comment, of course, picked up on yesterday's raging "Is Microsoft becoming the old IBM?" debate. Microsoft, apparently, is still capable of being a little pushy.

Intel is rolling out a new, faster notebook chip tomorrow -- but Mac users will have to wait until the holidays to buy MacBook Pros with the new chip inside, says Mac blogger Jason O'Grady. That's because Apple is still trying to fix problems with the circuit boards in its current Intel-powered laptop designs. That's not the only bad news for Apple fans. American Technology Research analyst Shaw Wu tells the International Business Times that new iPods won't come out until next year. Wu believes that Apple is rolling out a long-rumored widescreen iPod -- but not until early 2007, because of challenges in increasing the screen size and extending battery life at the same time. A new, scratch-resistant iPod Nano with a magnesium casing will come out around the same time, but like the MacBook Pro, the Nano is also reportedly delayed by chip-design problems.

So the question is, can you wait that long for new Apple gear? Or are you itching to buy something from rivals like Dell and Creative?

What do you get when you pay $79.95 a month for Verizon Wireless's unlimited broadband? A severely limited service, Joseph Enochs reports at ConsumerAffairs.com. Verizon cancelled one of Enochs's pricey accounts, claiming that he'd sent and received more than 10 gigabytes of data in a month, contrary to its terms of service. But Verizon's own logging software told Enochs he'd only used 2 gigabytes over the past month. More likely, Enochs had violated one of Verizon's other restrictions, which forbid watching online video and using VOIP software -- so no YouTube or Skype, for starters.

"The wireless spectrum is a limited and finite service," Verizon Wireless spokesman Jeffrey Nelson told Enochs. Hmmm. Then why, pray tell, is Verizon promising users "unlimited" service? Techdirt wonders why no one's gone after Verizon for "false advertising," noting that Verizon's restrictions are laid out in the legal materials it sends, not in its splashy marketing.

The Browser would really like to upload a videoblog entry or Skype someone to express its outrage, but it seems we're not allowed to.

Nicholas Negroponte's dream to outfit children in the developing world with their very own, low-cost, open-source, brightly colored laptops took a big hit yesterday when the Indian government decided its money would be better spent elsewhere. According to The Register, the Indian Ministry of Education found the project "pedagogically suspect," with one official telling the Indian newspaper The Hindu, "We do not think that the idea of Professor Negroponte is mature enough to be taken seriously at this stage and no major country is presently following this."

India is not alone in its skepticism. CNET readers last month worked themselves into a lather pointing out that Negroponte had "never brought a product to market," and that the One Laptop Per Child project was all "feel good." But the dream is not over yet. There are still plenty of laptopless children in Africa and the rest of Asia.

And if all those governments agree with India? There are always the underprivileged children in Negroponte's own backyard.

Photo: One Laptop Per Child

Back in 2000, Microsoft chairman Bill Gates reportedly despaired of his company's growing bureaucracy, asking underlings, "When did this company turn into IBM?" Six years and tens of thousands of employees added to the payroll later, Gates's fear is more true than ever, according to SeekingAlpha. Carl Howe writes there that Microsoft is set to lose the software business much like IBM lost the personal-computer business to rivals like Compaq in the 1980s. Apple has released five versions of Mac OS X since Microsoft's Windows XP came out, and Google is endlessly improving its search and advertising technologies while Microsoft struggles to come up with something workable. As Fortune's David Kirkpatrick points out, Microsoft's new self-regulation efforts are hardly going to help the company move faster. Already, the company has spent $20 billion on R&D in the last five years, SeekingAlpha's Howe argues, with no amazing new businesses to show for it.

Howe also points to the threat from Google's recently launched spreadsheet and word-processing software. But Jeffrey McManus doubts that people are ready to switch away from Microsoft Office: "The apps we're seeing today seem to say, 'Behold! I bring you an in-browser version of Word for Windows 2.0 circa 1991. Bow down and worship me, losers!'"

What do you think? Is Microsoft's software business toast?

Who says there's no money to be made off YouTube? Goldman Sachs has led a $130 million round of financing for Limelight Networks, the servers-and-bandwidth company behind such sites as MySpace, Facebook, and Microsoft's Xbox Live online-gaming service. Limelight is also rumored to be the content-delivery network behind YouTube, reports TechCrunch. We hope TechCrunch is right: Then at least someone would be making money off of all those Daily Show clips. According to Red Herring, Limelight booked second-quarter revenues of $14 million, up 35 percent from the first quarter and 200 percent over the same quarter last year.

But on GigaOm, Om Malik says there's a fly in the ointment: A patent-infringement lawsuit filed against the company by Akamai. Akamai previously sued rival Speedera, and ended up buying the company. Maybe Akamai will be the one who ends up making money here.

The United States accounts for 23.2% of spam sent around the world, according to a new report by security firm Sophos. That's bad, writes VNUNet, but even more discouraging is the fact that, for the first time in two years, the volume of spam made in the U.S.A. actually increased in the last quarter. Could there possibly be anyone left in America who clicks on e-mail offers for sexual-dysfunction pills and cheap mortgages?

Still, even spam is continuing to get offshored. Sophos says China is the world's second-largest spammer, churning out 20 percent of the total unwanted-message traffic. After that it drops down quickly. "The third through fifth spammers -- South Korea, France, and Spain -- (combined) generated only 17.5 percent," notes InformationWeek. One worrisome trend: Spammers are switching from text spam to images, which are harder for email servers to filter automatically.

Ah, summer: When temperatures soar, vacations abound, and traffic to youth-oriented websites dwindle as college students scatter to the four winds. That's why Facebook and Apple are teaming up to give away as many as 250 million songs. Facebook users will get a free 25-song sampler from Apple's iTunes Music Store when they click on a banner on the social-networking website. Apple's no doubt hoping to make sure that iPods remain more popular than beer on college campuses. In order to sign up for the promotion, Techdirt observes, you have to join an Apple "group" on Facebook -- a great way for Apple to keep its brand front-and-center whenever Facebook users log into the site. Facebook, meanwhile, has a more subtle motive, says Peter Cashmore on the Mashable blog: Beating MySpace at the music game by getting users to think of Facebook as a place to discover cool bands.

How much could popular online video website YouTube sell for? A cool billion dollars, says the New York Post. In your dreams, says Business 2.0 columnist John Battelle-- the big media companies are too afraid of the copyright lawsuits plaguing YouTube, and Google in particular doesn't understand how to run a community-driven website like YouTube. Techdirt says YouTube's following in the hype-driven footsteps of Skype, which managed to score a massive payday by floating a billion-dollar price tag for the company -- and then tripling it to $3 billion when nobody bit. That managed to land Skype a $2.6 billion payday from eBay, so the strategy seems to have worked.

Then again, Skype didn't have YouTube's problems -- which include restive users and a brouhaha over the rights that YouTube claims on every video that's uploaded to its service. What's worse--according to Valleywag, which cites a YouTube insider--YouTube's in-house ad salespeople didn't bring in a single dollar of revenue last month. Is that what you get for a billion dollars these days?

Tell us what you think the future holds for YouTube -- leave a comment below.

How much is knowing the value of your home worth? For Zillow's investors, the answer is $25 million. That's how much the real-estate website, which offers estimates of home prices displayed on neighborhood maps, has raised in its latest round of venture-capital financing. Zillow is giving real-estate agents the willies, writes Boston.com's Business Filter, because home-price estimates used to be something you could only get from an agent.

MortgageNewsDaily, however, contend that Zillow's estimates are often inaccurate. That said, Zillow also has abilities that far surpass anything you'd get from an agent. For instance, it can display a "heat map" of neighborhoods showing where homes are priciest, and its home values are now integrated into Yahoo's search results, so you can see home prices arrayed on a map in Yahoo's real-estate website. If you're in the market for a new home, you may still be better off getting a professional opinion from a real-estate agent, but at least Zillow will give you a better idea of where to start looking -- valuable information, now that real estate is turning into a buyer's market.

Forget about counting out those orange Monopoly-money $500 bills with glee. Instead, you'll be paid with plastic. Hasbro, the maker of the classic Monopoly board game, is going modern.

"Monopoly money will be phased out in a new version of the game in a bid to keep up with the times," reports the BBC. "Instead, players will use mock Visa debit cards to keep track of how much money they are winning or losing." Apparently, the new version -- which is called Monopoly "Here and Now, Electronic Banking Edition" -- comes complete with a card-swiping machine. "We wanted to design a more relevant version of Monopoly to reflect modern society," said Hasbro brand manager Chris Weatherhead to the Beeb.

Astute MySpace blogger Darren notes some other attempts by Hasbro to get with the times. For one thing, whereas players once started with a bankroll of $1,500, they will now begin the game with a cool $2 million. Also, some of the actual playing pieces have been rethought, with the dog replaced by a hamburger and a handiron replaced by a cell phone.

For those playing with real money, the makeover was good news: Yesterday, Hasbro shares were up 9 percent.

Trash your Razr and ditch your Nokia 6600: The giants of the cell-phone world are rolling out hot new models. If you've ever wanted a Razr that slides up rather than flips open, you'll dig Motorola's new Rizr. For those who want to stick with the flip, there's the Krzr. Both have a two-megapixel digital camera built in, which should make for high-quality photos.

Nokia, meanwhile, is upping the ante with its N73 and N93 models, both of which sport 3.2-megapixel digital cameras. The N73 is designed primarily as a cameraphone, with Carl Zeiss optics, while the N93's screen flips up and to the side for videocamera-style shooting of digital movies. Engadget notes that the N93 has some features you'd normally find only in a laptop, like Wi-Fi and a video-out connector for playing videos on TVs.

Hoping to stay relevant, Technorati celebrated its third birthday yesterday by unveiling a redesigned home page. The new look was no doubt paid for in part by the $7.6 million the company raised just a week ago. The flurry of activity reflects the company's effort to carve out a sustainable niche in blog search alongside competition like, well, Google.

"While those that have been with the site since its inception may not find the site difficult to use, those new to blogging complain that the site is not usable by the everyday Web surfer," reports BetaNews. Reader opinion on TechCrunch is split on the virtues of the redesign, with some applauding it and others calling the site's new colors "gaudy."

Of course, a rainbow-colored logo worked for Google. But will the new Technorati draw in new users without offending the old guard? For its new investors, that's the $7.6 million question.

MySpace was intermittently unavailable over the weekend, apparently due to a power outage at its main data center. "Hear that? That's the sound of 80 million people hitting the refresh button," wrote a snarky Pete Cashmore at his Mashable blog, who suggested that such a crash would never happen with Google or Yahoo. "With MySpace, however, it's almost expected: Users regularly see errors and the code is notoriously poor." Om Malik also wondered how such a thing could happen: "It is hard to believe that a service this large could just have one data center. Have they not heard of redundancy?"

The good news? The Marines are on the job. Yes, that's right: The U.S. Marines have established a MySpace page, and they've already attracted 12,000 "friends." Apparently the Army is coming next. If only MySpace's Web servers could get the hang of this "semper fi" thing.

A new medium deserves its own award show: That's the kind of thinking which led to the reeking atrocity of the Webby Awards. Now podcasters apparently feel that even the Webbys aren't good enough for them, and they're looking to start their own awards show. The Podcast Peer Awards dismisses other websites' top-10 lists of the most-downloaded podcasts, noting that "there are over 50,000 audio and video podcasts available. Most of them are lousy." True enough. But the backers of the Awards are proposing to have the producers of those same lousy podcasts vote on which ones are the best.

Our advice? If you believe in the wisdom of the crowds, stick to the top-10 lists to see which podcasts are the best. Podcast listeners, not creators, are the best judges of a podcast's worth -- and they're voting every day with their headphones.

Mark Cuban, the Internet bubble boy turned media mogul, is wrestling with an intractable problem -- how to get people into movie theaters without losing money. Movie studios regularly spend two to three times more in marketing than they make from their cut of ticket sales, Cuban points out -- a $60 million marketing budget might get 5 million people into theaters on an opening weekend, which works out to $12 a person. So he's looking to hire a new-media marketer who can figure out a way to promote movies on the cheap. (Here's an idea -- cut ticket prices.)

But it's clear that Hollywood is slowly figuring out that the Web is a good way to generate buzz -- take "Snakes on a Plane," a hotly anticipated action thriller that generated endless discussion online the moment its title was revealed. But this approach also threatens the whole movie-theater model, as the audience may turns to short clips on YouTube rather than venturing outside the house. “Their nightmare is a direct feed from moviemaker to audience,” novelist Walter Kirn tells the New York Times.

Would any amount of marketing get you into theaters? Or would you rather just watch videos on the Web?

Friday was a tough day for Boston Communications Group. First, BCGI, a fast-growing provider of cell-phone billing services, coughed up $55.3 million to Freedom Wireless to settle an ugly patent dispute. That payout was actually part of a larger $87 million settlement, reports the Boston Globe, involving several other wireless companies, all of whom were allegedly infringing Freedom's patents on prepaid wireless services. " (Is it just us, or has it been a good year for patent holders?)

The good news for BCGI? TheStreet.com notes it had already accrued a $64 million charge related to the case - so the company actually came out $9 million ahead. The stock doubled on the news, jumping $2.09 to $4.01, its largest-ever gain since it went public in 1996. But then came more bad news: The SEC has begun an "informal" review of the company's option pricing practices. Who said life in Boston was sleepy?

Sometimes Apple seems to just patent things for the heck of it. But its latest invention -- a "touchless" touchscreen for its iconic iPod music player -- could be headed to market in short order. In its recent blockbuster earnings call, Apple CFO Peter Oppenheimer hinted at new iPods coming soon. And last month, Terry Gou, the chairman of Hon Hai, a major contract manufacturer for Apple, blabbed about a "none-touch" iPod on its way in the second half of the year. Apple's new patent shows a tablet-style iPod with a virtual scrollwheel that's activated by the mere proximity of a finger -- so you can manipulate the player without actually smudging the screen by touching it. If the patented device is the same as Gou's "none-touch" iPod, this idea could become reality in your pocket in a matter of months.

Conventional wisdom holds that MySpace beat Friendster at social networking by allowing users far more freedom in modifying their profile pages -- which is why its first attempt at blocking YouTube drew howls of protest. That time, MySpace not only prevented users from embedding YouTube videos on their profile pages, it censored any mention of the word "YouTube." The effort was so ham-handed that MySpace quickly backed down.

Now, it seems that Rupert Murdoch's embattled social network is trying a more subtle approach. MySpace has upgraded its own video-sharing technology -- and has found a clever technological way to bounce YouTube off its friends list. Boing Boing reports that MySpace is effectively blocking YouTube and other video-sharing rivals by upgrading to the newest version of Adobe's Flash technology. While the official announcement cites security concerns, tech blogger Alice Marwick is having none of it: "MySpace can say all they want about wanting to protect users, but really this is about them protecting their advertising dollars."

MySpace has a point about security -- hackers have been using vulnerabilities in Flash to lure MySpace users into clicking onto potentially dangerous websites. But it's definitely in MySpace's business interest as well to keep users firmly planted on its website.

Is MySpace protecting users -- or just trying to prevent them from leaving its website? Leave a comment below to tell us what you think.

In yesterday's dullish earnings report, eBay CEO Meg Whitman announced an increase in certain fees for eBay sellers. The fee hike was targeted at cheaper items sold conventionally, not at auction: A $10 CD, for example, will cost 28 percent more to sell. eBay's rationale for higher fees: Auctions account for 91 percent of all merchandise sold on eBay, but the site's listings are dominated by fixed-price store inventory which take forever to sell. And if the goods don't move fast, eBay doesn't make money.

"The marketplace has been overwhelmed with identical, often poorly-priced items that have diluted the magic of the eBay experience," said Whitman, with a turn of phrase betraying the her years at Disney. Another interpretation: When profits are down 14 percent and Google is breathing down your neck, every penny counts. So up went "insertion fees," which are charged for each listing, whether or not it sells, and eBay also increased the cut it takes on store sales, which now runs as high as 10 percent of the item's selling price. Add in the PayPal fees for credit-card processing, and eBay could be taking $1.64 out of a $10 CD sale -- a sixth of the purchase price.

With eBay taking such a large slice of the pie, will sellers stick around? At least some say no. "Bye bye eBay," writes Brian Groce, "As soon as I have the time I will be closing my eBay store." An acceptable loss, or a grim sign for future earnings? Tune in to Meg's next magical quarter.

Not a day goes by when the Browser doesn't receive an email purportedly sent by PayPal. They're almost all transparent fakes, sent by hackers trying to trick PayPal users into giving up passwords so that they can seize control of their accounts. The hackers, however, are getting more sophisticated, and lately the fear is that some may have been using a formidable attack called "cross-site scripting."

And Netcraft, a British security-research company, says that PayPal had a security vulnerability to cross-site scripting attacks that went undetected for two years before Netcraft pointed it out and PayPal fixed the problem. Computerworld notes that Chris Marlow, a concerned PayPal user, tried to notify the company of the problem back in 2004, but wasn't able to get through to anyone.

Is PayPal being responsive enough to potential security problems? Leave a comment below.

What's iPod's market share? It depends on whom you ask. NPD Group says that Apple has 75 percent of the music-player market. But wireless consultant and author Tomi Ahonen says that iPod's true share is a mere 14 percent -- and plummeting fast.

How could there be such a vast discrepancy? Ahonen includes music-capable cell phones in his count, a category that's exploding as Motorola, Nokia, Samsung, LG, and others put MP3-playing features in more and more of the phones they sell. The Unofficial Apple Weblog, however, points out a massive flaw in Ahonen's analysis: All iPods are used to listen to audio content, while only a small percentage of cell phones are used for that purpose. According to one study, not quite one out of five cell-phone owners use their phones to listen to music.

Still, there are clearly some cell-phone-using music fans out there: More than half of the songs purchased digitally are downloaded directly to cell phones, according to music-industry statistic -- and that figure doesn't even take into account the vastly larger market for ringtones.. Last year in Japan, wireless downloads counted for 96 percent of of the $211 million digital-music market.

If other countries follow Japan's lead, the iPod's reign could be short-lived indeed.

VOIP watchers were looking forward to hearing about Skype's progress towards becoming a real business when eBay reported its latest quarter Wednesday night, but they were sorely disappointed. GigaOm did the math on Skype's $44 million in quarterly revenues and figured out that revenue per registered user rose a mere 5 percent over the previous quarter, from 37 cents to 39 cents. Skype Journal points out that at the current rate Skype is adding users -- 6 million a month -- it will miss its year-end target of 200 million users by miles, ending up with 149 million users instead.

And there's more competitive trouble ahead: VOIP software maker Gizmo Project announced that it will offer free VOIP calls in the U.S. to regular phones. Skype has a similar free-calling promotion that it has said will stop at year's end, but now it looks like Skype will have to continue to offer free calling in the U.S. indefinitely, a move which may win it more U.S. users but won't garner any revenue. In the U.S., Skype scraped together a mere $6 million in sales for the quarter by charging some Skype users to place international calls and to receive calls at a regular phone number that forwards calls to their computers. At this rate, it's not clear when Skype will ever pay off its bubbly $2.6 billion purchase price, or live up to the profit expectations eBay laid out when it acquired the company last year. What's next, a splashy TV ad with a sock puppet pushing free calls?

What do you think? Did eBay make a bad call in buying Skype? Leave a comment below.

When Google News ended its three-year-long testing period in January, it had already become legendary for spending such a long time in beta. Now, though, it looks like it's time to send Google News back to the shop. InfoWorld columnist Jon Udell points out that his magazine's stories still don't appear in Google News. He quizzed a Google rep, who conceded that InfoWorld met all of Google News's unpublished requirements for inclusion, and that InfoWorld's stories weren't being indexed correctly.

Let's run through Google News's post-beta track record on the sources it includes: Respected computer-trade publication, no; made-up press releases, yes. Until it gets better, we're going to keep calling Google News a beta.

A goodwill-hungry Microsoft yesterday committed itself to a dozen competition-friendly principles that will govern how it builds and sells its Windows operating system. Most of them, however, are just a rehash of commitments Microsoft had already made, which suggests that Microsoft cobbled together the list for PR purposes. Perhaps that's why Microsoft detailed top lawyer Brad Smith to make the announcement in Washington, D.C. News.com points out that "the announcement comes just a week after the European regulators slapped the company with a $357.3 million fine for noncompliance with a 2004 antitrust ruling."

The Microsoft Monitor Weblog notes that most of Microsoft's supposedly new principles are things that it had already promised or was required to do in antitrust-case settlements. Chris Nerney at Datamation understatedly suggests that skepticism is in order: "In the long history of commerce and corporations, I think it's fair to say that self-policing tends not to be the most effective method of ensuring fairness toward competitors or customers."

"When there's trouble on the home front, wage war," goes the old saying. And so Sun Microsystems has launched a highly targeted ad campaign promoting OpenOffice.org on buses in Redmond. OpenOffice is, of course, the would-be open-source alternative to Microsoft Office. The ads' slogans seem targeted at persuading users to drop Microsoft for OpenOffice: "Stop giving a bully your lunch money", "Compatible with expensive, closed, memory loving software", and "Prehistoric reptilians welcome." But the ads only appear on the sides of commuter buses that run from Seattle to Microsoft's suburban Redmond campus. Writes The New Marketing blog, which broke the story, "Maybe this is crazy talk, but I get the idea that these ads are aimed primarily at Microsoft employees. They're like propaganda leaflets dropped over enemy territory. Sun isn't trying to win customers, it's trying to demoralize the enemy!"

But the enemy is hardly demoralized. It didn't take long for a loyal Microsoftie to suggest some new ad slogans for Sun, which has wavered in its support for the open-source Linux operating system: "Solaris, er, Linux, no Solaris, no Linux, uh Solaris, no, aw never mind."

Digg readers, naturally, enjoyed the mudslinging, but were worried by Sun's tactics: "What is Sun's gain? Is Sun simply desparate?" wondered one. Maybe so, but perhaps Sun CEO Jonathan Schwartz feels it's better to be desperate with a sense of humor.

The Indian government is now saying it simply meant to block a small number of inflammatory blog postings, but that overeager ISPs went too far. ABC News reports this morning that in "scrambling" to comply with an order to block 17 anti-Muslim web sites, "some of India's Internet service providers have simply blocked users from looking at entire domains such as blogspot.com - and the thousands of blogs, or online web journals, hosted there."

When it comes to censorship, bloggers are a touchy and enterprising lot. "Since I don't feel like linking to an mp3 of a wakeup call let me write this in caps - this is CENSORSHIP," wrote Neha Viswanathan who has been following the situation at withandwithout.com. "If this isn't censorship, I don't know what it is." Boing Boing has also joined the fray, offering a clearing house for rumors as well as strategies for "routing around" the blockage.

The government's response to the response has also been swift. In an email message sent to Columbia University journalism professor Sree Srinivasan, A.R. Ghanashyam, India's Deputy Consul in New York describes the inadvertent blocking of all blogs as "unfortunate" and says the "Department of Telecommunications have now clarified the issue and the error is being rectified and it is expected that normalcy in respect of blogs will soon be restored."

Of course, that does leave the question of whether the blogs actually targeted really did "create serious law and order problems," as Ghanashyam and the Indian government have maintained. Opinions anyone?

We've reported there was a war on between Digg and the new Netscape.com. Now Jason Calacanis, Netscape.com's maverick boss, is using cash as a weapon by offering $1,000 a month to the top contributors on Digg, as well as several other popular "social news" sites.

What does it mean? Michael Arrington at TechCrunch notes that on Digg, "a relatively small group of users submit a large percentage of the stories that end up on the Digg home page." He points out that Netscape doesn't have those power users, and has therefore gained little traction with users. Thus, says Arrington, "Jason’s post is a sign of desperation more than anything." Richard MacManus at Read/WriteWeb, on the other hand, thinks Calacanis may be playing some "offensive defense," hoping that the news of his proposition will give the media (and bloggers) something to pay attention to other than the disgruntled users who miss the old Netscape.com Web portal.

For his part, Calacanis is characteristically blunt: "I don't have a complicated relationship with money or capitalism: I love them both and see them as simply as fuel and the process by which fuel is produced."

You'd think that people at Google would be grateful to Tim Berners-Lee for inventing the World Wide Web. But nooooo. Google executive Peter Norvig doesn't think much of Berners-Lee's latest big idea, the so-called "Semantic Web," which is an attempt to make Web pages easily understandable by computers so that they can handle more of our day-to-day transactions in a standardized way.

Norvig claims that Berners-Lee's concept is flawed, because most webmasters aren't competent enough to handle the extra programming that the Semantic Web would require -- and those that can handle it would likely use the Semantic Web deceptively, much as people already try to trick search engines into directing Web traffic to their pages.

We've got a different take on Norvig's stance, however: Google's specialty is taking regular Web pages and processing them so that they're easily understandable by computers -- Google's computers, that is. Berners-Lee's Semantic Web would make it easy for anyone to find information on the Web, not just Google. No wonder Google isn't fond of a technological leap that threatens its bread-and-butter business.

Valleywag's advice to Google: If you want to tangle with the inventor of the Web, bring out the inventor of the Internet -- Vint Cerf, who now serves as Google's chief Internet evangelist.

Some companies compete by assigning people to make better products. Microsoft, on the other hand, competes by hiring people to obsess over its rivals. Since April, Microsoft has been looking -- apparently without success -- for a "Google Compete Lead" in China. A "lead," in Microsoft parlance, is a middle-management position which usually has a couple of program managers reporting to it, so the job is hardly high-profile. But the very idea that Microsoft is trying to hire a specific person to manage its anti-Google efforts in China, a key market, speaks volumes about why it's failing. If Google is such a threat to Microsoft, shouldn't everyone at the company be working to compete with Google?

Snarky consumer champion Ben Popken at the Consumerist blog has published excerpts from AOL's Customer Retention Manual -- the bible of customer-service reps trying to dissuade AOL members from canceling service -- and in the process has set off a gleeful stir in blogland.

Why is AOL's customer service so much in the news these days? It was just last month that blogger Vincent Ferrari called AOL customer service to cancel his account. The AOL rep was reluctant to let him go, and the recording Ferrari made of the resulting phone call wasn't pretty. Ferrari's customer service nightmare became an instant sensation, and the man made the tour of CNN, Today, and finally Nightline. The Washington Post wrote: "Not since Linda Tripp chatted with Monica Lewinsky has a recorded phone call attracted so much attention."

The rep who spoke to Ferrari was fired, but now we're beginning to think it was for incompetence at selling, not for treating a customer badly. Courtesy of Consumerist's scoop, the world is now privy to AOL's heavy-handed sales techniques. Among the priceless bits: "If you stop and think about it, every Member that calls in to cancel their account is a hot lead. Most other sales jobs require you to create your own leads, but in the Retention Queue the leads come to you!"

The Web's response, which includes outrage on Digg, has also drawn out a confession from a former AOL "retention specialist."

Popken and others hope that all the negative publicity will teach AOL -- and others -- a lesson. This is called learning the hard way, no?

An iTunes movie-rental store will take the stage at Apple's upcoming Worldwide Developers Conference, a gathering for Mac software programmers, according to Think Secret. That Apple is planning to rent movies, rather than sell them - if indeed this is the case - comes as something of a surprise, since Apple CEO Steve Jobs has previously badmouthed subscription and rental plans for music. But, says Think Secret, the movie studios have insisted on rental plans rather than permanent downloads, and Jobs -- who now oversees a major movie studio as a Disney board member -- has finally given in.

Virtual Economics calls Apple's rental plan "flawed," saying that the movie studios have failed to learn from the music industry's experience with iTunes, where selling permanent downloads got people to stop using file-sharing services and pay for music instead. But Carlo Longino at Techdirt says that the "studios' insistence on playback restrictions" actually benefits Apple. While Jobs may not be thrilled with the rent-not-buy requirement, other restrictions -- like limiting movie playback to video iPods -- will suit Apple just fine, since online movie rentals will help it sell more of its portable media players.

The escalating violence in the Middle East has forced tech companies with operations in the region to take extraordinary precautions. According to News.com, Microsoft has evacuated its Beirut offices, and both Microsoft and Intel have increased security at facilities in Israel. Meanwhile, picking up a Reuters report, EETimes writes that "staff at Intel's Haifa research center...are working from underground bomb shelters equipped with a wireless network." Also affected is IBM, which apparently has 400 engineers in Haifa, but has kept its security response confidential. Digg, meanwhile, also has problems maintaining peace on its boards, as a discussion about Microsoft's departure from Beirut devolved into racist name-calling.

As more details emerge about Microsoft's Zune music player, one thing is clear: Microsoft is trying its best to copy Apple's playbook for the iPod. For starters, Digital Music News reports, it's gutting its PlaysForSure licensing system, which lets Windows Media play music on gadgets from Creative and Samsung, and download music from any online store. Songs downloaded from RealNetworks' Rhapsody, Napster, MusicMatch and others reportedly won't play on the new Zune. Instead, the Zune will have its own branded store that's off-limits to other players -- much as song downloads from the iTunes Music Store are meant to play on iPods only.

After Microsoft gets done stabbing its former partners in the back, however, it's hardly planning to do more than poke at Apple. Strategy documents leaked to Digital Music News say that Microsoft is only hoping to capture 20 percent of the iPod market, concentrating on the 18-to-28-year-old demographic. And even those modest ambitions may be a bit high, since, at $399 for a 30-gigabyte player, Microsoft's first Zune will cost $100 more than a comparable iPod. A better way to capture cash-strapped teens would seem to be offering a cheaper player, not a more expensive one -- but the Wi-Fi networking features in the Zune apparently boosted the cost.

Does Microsoft's new music strategy have a chance? Leave a comment below and tell us what you think.

Last month, Netscape unveiled a new version of its home page, closely modeled after the social news site Digg.com. Within weeks, Digg rolled out its own long-planned upgrade that took the news-discussion site from its tech roots into politics and world events. Now, as the battle heats up, TechCrunch reports that on July 24 Digg will be rolling out more new features, including sports topics, as well as two Flash-based "news visualization" tools. "The release, along with user stats that show massive growth," writes TechCrunch's Michael Arrington, has "pushed Digg into the consciousness of mainstream Internet users for the first time."

Some Digg regulars are skeptical of their site's broader ambitions. "I think Digg should have stuck to their core market - technology news," comments one TechCrunch reader. "The stories from every other category are, in my opinion, almost always sensational and worthless," says another. Others however welcome the broader mandate: "Now I won't ever have to go to any other websites. Digg will have everything I need," reads one Digg post. With community-filtered news edging towards mainstream acceptance, it seems likely that the pro-expansion camp will carry the day.

What do you think of the new Digg?

Wal-Mart, eager to get more teen shopping dollars, is diving into social networking, according to AdAge.com. But its first effort looks likely to get laughed out of school. The Hub (School Your Way) website features a choppy, distorted video of kids talking about clothes they just bought and invites teens to submit their own videos to win a prize. Teen critics like Amy Kandel say the site doesn't ring true: "Are these real kids?" she asked an AdAge.com reporter. ConsumerGeneratedMedia.com says Wal-Mart's site is the latest example of big brands like Coke trying to capture the popularity of user-generated content websites like YouTube.

But will Wal-Mart's create-your-own-video contest take off virally? Not likely. Today's kids are utterly savvy about the economics of peer production. Molly Morgan, 14, tells AdAge.com: "It, like, takes a lot of time, and it's not very likely you'll win."

YouTube, the indie poster child for the Web video craze, announced yesterday that it's now serving over 100 million videos per day. Of course, the site has been reporting astounding growth numbers since it hit critical mass last fall, but let's put this in perspective: According to yesterday's Reuters report, the typical YouTube video lasts about two minutes. The site has 20 million users, which means that the average YouTube viewer is spending five hours a month watching videos on the site. How does that translate into market share? HitWise estimates that YouTube serves roughly 60% of all videos watched online.

The big question, though, is what YouTube's worth. Screenwerk points out that "the site has started showing banner ads and has struck a deal with NBC" to post the network's clips, and thus figures it could "now fetch an astronomically high purchase price." That's the same logic that "led gossip blog Valleywag last Thursday to notice that YouTube's