Skype, the Web telephone company, said on Monday it would allow consumers in the United States and Canada to make free phone calls, a promotional move that marks a new blow to conventional voice calling services.The offer, which extends through the end of 2006, covers calls from computers or a new category of Internet-connected phones running Skype software making calls to traditional landline or mobile phones within the United States and Canada.

Previously, users of Skype, a unit of online auctioneer eBay Inc., were required to pay for calls from their PCs to traditional telephones in both countries. Calls from North America to phones in other countries will incur charges.

Skype already offers free calling to users worldwide who call from computer to computer.

The company is seeking to accelerate usage in the North American market, where adoption of its voice-over-Internet technology has lagged other regions of the globe. Based in Luxembourg, it counts more than 100 million registered users globally, including 6 million in the United States.

Henry Gomez, general manager of Skype North America, said he believes the move would rapidly accelerate adoption of the service. Skype will pick up the interconnection costs of making calls to phone networks owned by other carriers, he said.

“Skype anticipates that completely free calling in the U.S. and Canada will expand Skype’s increasing penetration in North America and solidify Skype’s position as the Internet’s voice communication tool of choice,” Skype said in a statement.

The offer is likely to put price pressure on rival voice-over-Internet phone service Vonage Holdings Corp., which is expected to go public later this month. A spokesman did not return calls seeking comment.

Although Vonage and Skype serve somewhat different markets — with Vonage acting as a full replacement service for traditional phones over Internet lines, and Skype considered by most as a complement to existing service — the free offer could siphon customers away from Vonage.

“In one stroke, Skype simplifies the choice to try Skype,” said Phil Wolff, an editor at Skype Journal, an independent consulting group that publishes an online news site on Skype developments. “This promotion targets Skype’s hardest market: North America.”

The move puts pressure on rival Internet services such as Microsoft Corp., Yahoo Inc., AOL, Earthlink and Google Inc., which charge small per-minute fees for computer-to-phone services, Wolff said.

Skype, which allows free Web-based calls between members, said the offer to U.S. and Canadian consumers is made feasible by the low cost structure of North American telecom markets relative to other countries, where phone tariffs are higher.

“The structure and efficiency of the telecommunications industry in the U.S. and Canada make it possible for Skype to offer free calls,” Skype said on its Web site.

In October, eBay CEO Meg Whitman signaled that Skype users could eventually expect to make telephone calls for free, with no per-minute charges, as part of a package of services through which carriers make money on advertising or transaction fees.

“In the end, the price that anyone can provide for voice transmission on the ‘Net will trend toward zero,” she said.

The company is betting that by combining electronic markets, online payment systems and Web-based communications, eBay can emerge as a leader in all three businesses.

Gomez said the free phone service promotion will not alter the company’s plans to generate more than $200 million in revenue during 2006, up from roughly $60 million last year. Skype will promote the offer via online advertising, radio spots and ads in selected local cable TV markets, he said.

Microsoft Corp. scored an important win against rival Google Inc. over the weekend, as Amazon.com began using its technology to power the Internet retailer’s A9 search unit.Microsoft’s new Windows Live is at the core of the company’s efforts to win online advertising dollars away from Google Inc. and Yahoo Inc.. A9 had previously been powered by Google.

Amazon’s search engine, A9, breaks down searches into various categories, such as Web searches, book searches, and blog searches. It is a stand-alone search site, www.a9.com, as well as the search technology used on the www.amazon.com Web site.

A9 Chief Executive David Tennenhouse told Reuters that Windows Live presented a “very interesting, powerful Web search option” that had previously been featured on the A9 site.

Tennenhouse said the Google search was removed from the site on Sunday, following the expiration of that contract. He would not comment on the terms of the Microsoft deal, or whether a new contract with Google had been an option.

Microsoft’s new search engine and user interface consolidates a variety of the software giant’s Web services such as search, e-mail, instant messaging and security at its Live.com site.

Senior product manager at Microsoft’s MSN Internet unit, Justin Osmer, confirmed that Google’s contract with Amazon.com had expired, but did not elaborate on what was behind the switch.

“It’s another opportunity to reach a new segment for us and get people acquainted with the Windows Live search brand,” Osmer said.

Google and Yahoo built multibillion-dollar businesses supported mainly by online ad sales from search, while Microsoft lagged behind. But Microsoft now aims to close the gap with Windows Live and a new pay-per-click advertising system called adCenter.

“We view this as more of a marathon than a sprint,” said Osmer.

MSN’s search engine lost market share again to Google and Yahoo in March. Its U.S. share fell to 11 percent from 14 percent, while Google and Yahoo each gained, rising to 49 percent and 22 percent of the search market, respectively, according to Nielsen//NetRatings.

Google did not return a phone call seeking comment.

Nick Lachey and Jessica Simpson are back together. In the wireless world, anyway. Both are participating in a new mobile blogging service offered by Sprint called BlogStar, which also counts Wesley Snipes, the Game and Bam Margera as contributors. The rich and famous stars are documenting their lifestyles with camera phones and posting pictures, text and, eventually, video to their personalized mobile blogs. Access to each blog costs $5 per month. Subscribers receive alerts when new posts are uploaded, to which they can leave replies as well as discuss content with other subscribers. It’s just one example of how the blogging and social networking that have taken the Internet by storm are going wireless. At a time when ringtone and wallpaper image sales are beginning to flatten, the music industry is looking for new mobile revenue streams and promotional opportunities. MySpace has a tremendously strong impact on the music industry, and now the pieces are in place for a wireless version to do the same. BlogStar CEO Keith Yokomoto — founder of the original ArtistDirect service — says he and ArtistDirect co-founder Ted Field formed BlogStar to better capitalize on MySpace’s promise. “Just imagine if 100,000 of your fans were all connected,” Yokomoto says. “You send out a blog that goes straight to their cell phone, and you’ve got an army of folks out there blogging back in real time. How powerful is that?” On paper, the marriage of blogs and mobile phones seems like a perfect match. Everyone seems to have a mobile phone, and increasingly these devices have photo and video cameras included. Supporters say the ability to blog on the fly rather than hold off until reaching a computer adds a more intimate, real-time element to the experience.

Yet mobile blogging is no slam-dunk. Camera phones may be ubiquitous, but only the most expensive actually take decent pictures, and video phones are even more expensive. What’s more, carriers face a herculean task in convincing subscribers — who for years have been trained to view their mobile devices as a tool for making voice calls — to start thinking of their phones as a mobile computer.

Companies like Text100, MyMMSBlog.com and SMS.ac pioneered the mobile blog space by providing wireless subscribers a means of posting camera phone pictures and text messages online. But their services never grew much beyond their novelty factor.

Sprint’s BlogStar service is one of many attempts to put a recognizable face on mobile blogging to generate interest and awareness among mobile phone subscribers — in this case by relying heavily on star power.

In the last two months, however, the 800-pound gorillas of the online social networking scene began muscling their way into mobile as well. In March, MySpace — by far the most influential service, with 36 million unique visitors and more than 60 million members as of March — struck a deal with startup youth-oriented wireless operator Helio. Users will be able to update their MySpace profiles with text and photos, as well as access the profiles of others, from their mobile phones. It’s expected to go live later this spring.

At the CTIA Wireless 2006 industry conference in early April, MySpace rival FaceBook — with about 10.5 million monthly unique visitors — rolled out a mobile extension to its service with Cingular, Sprint and Verizon Wireless. Members initially will only be able to post text updates to their FaceBook profiles, with photos expected over time.

Others are following their lead. Intercasting’s Rabble mobile blog service now runs on Cingular and Verizon Wireless, which charge subscribers $3 per month to join. Los Angeles-based startup Juice Wireless launched its Juicecaster blog service at CTIA as well. Unlike online blogs now creating wireless extensions, Juicecaster was built from the ground up to integrate online and wireless posting and access.

Buzznet has been doing the same for the past two years, and recently won a contract with concert promoter Goldenvoice to power the integrated online and mobile social networking site of the upcoming Coachella music festival in Indio, Calif.

Wireless operators could not be more thrilled. The wireless industry has long believed that the successful mobile content and applications will be those that best take advantage of the communication elements of wireless. For years, the industry has been throwing everything it had at consumers to see what would stick.

Google Inc CEO Eric Schmidt on Wednesday defended the search engine’s cooperation with Chinese censorship as he announced the creation of a Beijing research center and unveiled a Chinese-language brand name.Google is trying to raise its profile in China after waiting until January to launch its Chinese-language site Google.cn.

Activists have criticized the company for blocking searches for material about Taiwan, Tibet, democracy and other sensitive issues on the site.

“We believe that the decision that we made to follow the law in China was absolutely the right one,” Schmidt said at a news conference.

He said Google had to accept restrictions in order to serve China, which has the world’s second-largest population of Internet users after the United States, with more than 111 million people online.

Schmidt also announced the creation of a research center in Beijing that he said should have 150 employees by mid-2006 and “eventually thousands of people.” He said the center is meant to create products for markets worldwide, though he said planning was still in such an early stage that he didn’t know what they might be.

Schmidt was speaking at a ceremony to announce Google’s Chinese-language brand name — ‘Gu Ge,’ or ‘Valley Song,’ which the company says draws on Chinese rural traditions to describe a fruitful and rewarding experience.

Talking to reporters later, Schmidt said Google’s managers were stung by criticism that they accepted Chinese censorship, but said they haven’t lobbied Beijing to change its rules.

“I think it’s arrogant for us to walk into a country where we are just beginning to operate and tell that country how to operate,” he said.

Asked whether Google might try to persuade Beijing to change its restrictions, Schmidt said he didn’t rule anything out, but said it hasn’t tried to change such limits elsewhere. He noted that Google’s site in Germany is barred from linking to Nazi-oriented material.

“There are many cases where certain information is not available due to local law or local custom,” he said.

Schmidt said China accounts for only a small portion of Google’s revenues because the company has only recently obtain a license to allow it to carry local advertising. But he said the company expects China to be an important part of its future business.

One possible Google project in China would be to make Chinese books available online in digital form or to use translation software to produce English-language editions, Schmidt said.

He said the Beijing technical center could quickly become Google’s biggest outside the United States, surpassing its European lab in Zurich, Switzerland.

Chinese universities “are now churning out a very large number of very, very good programmers,” he said. “So we are moving quickly now to hire the best and the brightest.”

Google Inc. said on Wednesday it had agreed to pay up to $90 million to settle its part of an industrywide lawsuit alleging Web search companies overcharge some advertisers by billing them for false customer leads.

Google’s proposed class action settlement stems from a suit filed a year ago by several plaintiffs, including Lane’s Gifts and Collectibles, in an Arkansas state court. It covers abuse of Google’s pay-per-click advertising system by outside parties.

The deal aims to resolve all outstanding claims against Google for so-called “click fraud” dating back to 2002, a spokesman said, but similar claims against the Mountain View, California-based company are outstanding in other courts.

At issue is “click fraud”, the abuse of search advertising systems for the purpose of driving up advertiser fees.

It involves a malicious party repeatedly clicking on an advertising link — either manually or using robots — and so generating a commission payment with each click.

Plantiffs argue Google and other search providers indirectly benefit from click fraud by doing too little to thwart it.

The $90 million would involve legal fees and credits — rather than any cash payments — to any of its advertisers who apply to be part of the class settlement, once the judge certifies the agreement, Google spokesman Steve Langdon said.

Also named in the original lawsuit were the search businesses of Yahoo Inc., and lesser players Walt Disney Co., Lycos Inc., LookSmart Ltd. and Findwhat.com Inc., which is now known as MIVA Inc..

A spokeswoman for Yahoo said her company was prepared to continue to defend itself against the legal action. A spokesman for Disney could not immediately be reached.

Google’s proposed settlement deal would also cover Google ad search partners including America Online and Ask.com who were also originally named in the suit, which alleged that click fraud was a widespread Internet industry practice.

The case covers all advertisers using Google’s pay-per-click advertising system from February 2002 through the date when the judge certifies the settlement. The final settlement hearing is expected to take place in coming weeks.

PAY-PER-CLICK

Google counts thousands of advertisers on its system but declines to disclose any actual numbers. The vast majority of Google’s revenues, around 97 percent, are the result of pay-per-click ads.

Critics have said the threat of click fraud is the single greatest risk to Google’s advertising-dependent business model. But the company has downplayed the risk, saying only a small percentage of the clicks on its search ads are fraudulent.

Google is the most popular provider of Web search. It makes money largely by selling small text based ads along the edges of search results pages on Google or on many partner sites who run Google ads on their own Web pages.

In a statement on Google’s Web site, Nicole Wong, associate general counsel, said the company would extend the deadline so all advertising customers over the past four years can apply for reimbursement for ad clicks they believe were invalid.

Under its existing policy, advertisers had 60 days to recoup any such losses. Instead, Google would offer credits regardless of when the click fraud occurred, Wong said. The credits can be used by advertisers to buy new ads from Google.

“We do not know how many will apply and receive credits, but under the agreement, the total amount of credits, plus attorneys fees, will not exceed $90 million,” Wong said.

Google has reported more than $7 billion in revenue during its first five quarters as a public company and has generated billions of dollars more since the system was first launched four years ago.

Yahoo spokeswoman Gaude Paez said nothing had changed as far as her company’s willingness to pursue the case.

“We stand firmly by our proprietary click protection and look forward to vigorously defending our position in court,” she said.

NBC Universal has signed a deal to acquire iVillage, the women’s and parenting website, for about $600 million.

The companies said Monday that shares in the publicly-traded iVillage will be purchased for $8.50 a share, up a little more than 50 cents a share from its $7.98 a share close on the Nasdaq on Friday.

The deal still has to be approved by shareholders and regulators although it’s likely to close in the second quarter.

One of the premiere destinations on the Web for women and parents, iVillage launched in 1995. It reported a full-year 2005 revenue increase of 30% and NBC Universal said Monday that it expected to increase revenues about $200 million in 2006 with a 20% future growth rate.

“It has built a strong name for itself and it’s a very advertising-friendly platform,” said Bob Wright, NBC Universal chairman/CEO. He said iVillage would be a significant growth platform for NBC Universal’s online strategy going forward.

“It gives us immediate scale in the online world,” Wright said.

When the deal closes, the New York-based iVillage would report to Beth Comstock, NBC Universal’s president of digital media and marketing development.

“Right away you’ll expect to see the beauty of both of us (iVillage and NBC Universal), right away we’ll be able to bring video to bear and take advantage of the community that iVillage has built up,” Comstock said.

Among those video assets include “Today,” “Project Runway” and “The Biggest Loser,” said Jeff Zucker, CEO of NBC Universal Television.

Zucker wouldn’t close the door on using iVillage to help build a women’s centered cable channel to compete with Lifetime, WE and Oxygen. He said initial talks had been held about a possible channel.

“I think that’s absolutely something we will look at,” Zucker said.

There’s also the possibility of growing into other areas, beyond the women 18-49 demographic online. Doug McCormick, chairman/CEO of iVillage, said Monday that the company also has gurl.com, a site for teenage girls, and iVillage’s parenting sites has built up a following among young fathers too.

Amazon.com came under fire from Britain’s book publishing and retailing industries on Monday even as the debate raged over a perceived threat presented by Google Inc.

The chief executive of HarperCollins UK, said she feared the online book seller more than the Web search leader, which has created a stir with plans to digitize every book.

“We all want to talk about Google, but personally I see Amazon as a bigger threat because Amazon has shown a lot of signs that they actually want to move into the publishing space,” said Victoria Barnsley.

She cited Amazon.com’s recruitment of senior executives from the publishing industry and its approaches to book agencies as evidence of the company’s ambition.

“They are moving into the publishing space and we ought to be very mindful of that,” she said during a panel discussion on the future of publishing at the London Book Fair. HarperCollins is owned by Rupert Murdoch’s News Corp.

“I think we’d argue that Amazon is a real friend to the publishing industry,” a spokesman for the retailer said when told of Barnsley’s remarks.

He said Amazon had helped boost sales of publishers’ back titles and said its own opt-in scanning project that allows consumers to see inside a book online has helped increase sales of those books by 7 percent in the United States.

Meanwhile, one of Britain’s biggest book retailers said it is contemplating severing ties with Amazon.com and creating its own online retail space.

Alan Giles, CEO of HMV, which owns the bookselling chain Waterstone’s, said he is not sure the shops should continue having Amazon host their Internet presence.

“We are having quite an open debate with Amazon whether that is necessarily fulfilling the aspirations we’ve got in the online space,” Giles told Reuters on the sidelines of the presentation.

“The deal we did with Amazon was right for the time because it gave us a very cost-efficient way of providing maximum service to our customers, but we are due to make some changes to punch our weight on the online channel,” he said.

Many companies initially were happy to farm out their online commerce sites to pioneers like Amazon for cost and efficiency reasons, but the ability to run them has become cheaper and easier, and more important for preserving brand identity.

The Amazon spokesman declined to comment, saying it doesn’t publicly discuss commercial relationships.

Waterstone’s is in the process of trying to buy rival Ottakar’s while parent company HMV is the subject of a takeover bid by private equity firm Permira.

GOOGLE STILL A CONCERN

Google’s efforts were not forgotten amid the Amazon chatter as book fair attendees flocked in droves to standing-room-only presentations explaining how the digitization efforts will work.

Google has been on the defensive since it unveiled a pair of scanning initiatives in late 2004 and has been trying to reassure the industry it is not making available online the full texts of volumes still under copyright protection.

U.S. publishers have sued Google and the animosity has now spilled overseas.

Nigel Newton, CEO of Harry Potter publisher Bloomsbury, called for a boycott of Google as the book fair opened, claiming the digital scanning plans are a “Pandora’s box” despite the company’s claims otherwise.

“Its quest to monetize for its own benefit the literature of the world must be stopped,” he said.

“It must be regarded as likely that a subsequent management regime at Google will pressure publishers to allow it to offer 100 percent of text as battles for market share are joined against the other mighty search engines,” Newton added.

Barnsley, the HarperCollins executive, said she had no plans to swear off Google, but noted that her company is spending millions of pounds to build its own digital repository.

“We will not do what Nigel Newton wants, which is not talk to Google,” she said. “It would be mad to just shut down the dialogue.

“I do think that search — which is what Google is about — is going to transform our industry. I think it’s the most exciting that’s happened.”

The National Archives and Google are teaming up to allow unprecedented access to historical film properties for free with just the click of a mouse.

Through a pilot program, U.S. archivist Allen Weinstein has collaborated with Google Video to compile an online library of 103 films, including movies, documentaries and other cinematic creations formerly unavailable to those who can’t make the trip to Washington, D.C.

“This is an important step to achieve our goal to become an archive without walls,” Weinstein said. “For the first time, the public will be able to view this collection of rare and unusual films on the Internet emphasizing the importance of providing access to records anytime, anywhere.”

The diverse assemblage of titles can be accessed via Google Video as well as the National Archives Web site. They range from U.S. government newsreels documenting World War II to NASA-produced documentaries on the history of the space program. The earliest film preserved in the archives, 1894’s “Carmencita — Spanish Dance” featuring the famous Spanish gypsy dancer, also is included.

“Whether in San Francisco or Bangladesh, students and researchers can watch remarkable video such as World War II newsreels and the story of Apollo 11 — the historic first landing on the Moon,” said Sergey Brin, co-founder and president of technology at Google.

Other historic films in the collection include documentaries from the 1930s showing the founding of the national and state park system in America and the creation of Boulder Dam.

Formed in 1934, the National Archives and Records Administration is an independent federal agency serving as the nation’s record keeper.

The project is part of a more expansive effort by the search engine Google to make written and multimedia works from public and private libraries available online. The films join the increasing number of titles available on Google Video including CBS television shows, Charlie Rose interviews and NBA games.

U.S. retail sales over the Internet and other electronic networks rose a seasonally adjusted 3.3 percent in the final quarter of last year, a slower growth rate than the third quarter and the same period a year ago, the Commerce Department said on Friday.

Purchases over the Internet, by e-mail or through other electronic networks rose to a seasonally adjusted $22.94 billion in the October-December period. E-commerce sales accounted for 2.4 percent of total sales, exceeding the previous record of 2.3 percent set in the third quarter.

Total retail sales for the fourth quarter rose 0.3 percent versus the previous quarter to $960.291 billion. They were up 6.0 percent over year-ago levels.

E-commerce sales include goods and services negotiated via the Internet but exclude online travel services, ticket sales and the services of financial brokers and dealers.

The United States began first publishing data on e-commerce transactions in 1999.

The government collects sales data from about 11,000 retail firms out of what it estimates to be over 2 million such companies.

Source-Reuters

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Chinese Communist Party elders and U.S. lawmakers fired shots at China’s powerful censors this week, but Li Xinde says muck-raking campaigners like himself are undermining the country’s barriers to free speech every day.

Li is one of just a handful of Internet investigative reporters, exposing corrupt officials and injustice on his China Public Opinion Surveillance Net (www.yuluncn.com).

Then he spreads his often outrageous, sometimes gruesome stories on some of the 49 blogs he uses to slip past censors.

“They shut down one, so I move to another,” he told Reuters.

“It’s what Chairman Mao called sparrow tactics. You stay small and independent, you move around a lot, and you choose when to strike and when to run.”

Li, 46, lives in Fuyang, a city of 360,000 in the rural eastern province of Anhui, and he is far from a household name among Chinese readers, even Internet enthusiasts.

But some of the cases he first reported became notorious after other reporters, even state-run television, took them up. Li’s Web site has become a magnet for discontented rural citizens hoping to turn his spotlight on their complaints.

In 2004, Li helped bring down a corrupt deputy mayor in the eastern province of Shandong after posting bizarre pictures of the official kneeling before his one-time business partner, apparently begging her to stay silent.

More recently, Li published the grisly story of a businessman apparently beaten to death while in official custody in the northern province of Hebei.

Recently, the Communist Party has sought to tighten its grip on information. Censors sacked editors from three bolder newspapers, and on Thursday removed the editors of Freezing Point, the China Youth Daily’s combative investigative weekly.

But China has 110 million registered Internet users, and even rural towns have Internet bars where locals can email complaints to Li or, more often, play computer games. “Sometimes old farmers get their sons to write to me,” Li said.

“CAN’T TURN BACK A RIVER”

Swelling popular demands for rights are combining with the spread of the Internet to make it harder for the Propaganda Department to shore up censorship, even as officials shut down newspapers and purge editors, he said.

“It’s like the Yellow River. You can guide its course, but you can’t block it and you can’t turn it back. That’s the Internet”.

Before embracing the Internet in 2003, Li was a soldier who joined the Communist Party and then worked as a reporter for a series of small newspapers. Now payments from well-wishers and reporters who use his leads give him a small living.

Several Chinese journalists who have written for Internet sites abroad are in jail, and in two cases Yahoo provided evidence used against them.

Li said it might make business sense for international companies such as Yahoo and Google to comply with China’s censors, “but morally it’s wrong to sell people’s freedom”.

Li said he had published hundreds of reports on the Internet without direct trouble with police, but evading the censors had become more difficult in the past two years, as controls were tightened and his reputation grew.

His Web site was shut down for several months, and only recently reopened, and many of his blogs are regularly shut by nervous or intimidated operators. But Li said China had dozens of Web activists who shared news about corruption despite censors.

“I can still spread news across the whole country in just 10 minutes, while the propaganda officials are still wondering what to do,” he said with a chuckle.

On Tuesday, 13 retired senior officials and scholars in Beijing, including a former aide to Mao Zedong, jointly denounced censorship. And members of the U.S. Congress this week proposed legislation to deter foreign companies’ cooperating with Chinese censors.

Bu Li said Chinese people’s demands for clean, accountable officials, and their salacious curiosity about bad ones, were the censors’ ultimate enemy.

“Our party always said revolution depended on the gun and the pen — the military and propaganda,” said Li, echoing a slogan of Mao’s. “The gun is still firmly in the party’s hands, but the pen has loosened.”

Source-Reuters