World's biggest label kneecaps iTunes store
Universal Music Group has dealt a serious blow to Apple's music ambitions by refusing to renew its contract with the iTunes Store. The New York Times reports that the decision not to continue the annual contract was made by UMG executives last week. It appears likely that Universal's repertory will disappear from the online store, unless the two parties can reach a new agreement. Embarrassingly for Apple, the removal of its catalogue will mean the loss of Apple poster child U2. UMG is the world's biggest record label and claims to sell one album in four. It grew through a series of mergers, acquiring Polygram, A&M, Geffen, Motown, Island, and Verve. Reports that Sony BMG recently renewed its annual contract with Apple. Music executives have chafed at being forced to sell to iTunes at the one price set by Apple. They're also wary of the "cherrypicking" model, permitting single song downloads, that's destroyed the lucrative "bundle" of the album. They're keen to see more regular, service-based models succeed, even though these offer lower per-unit returns.

iPhone creates stir on US launch
Apple sold up to 525,000 iPhones at its stores and AT&T's in the first weekend since the device launched on Friday. And half of Apple's stores on the US west coast sold out on the first day. According to AT&T, provider of wireless services for the iPhone, most of its 1,800 stories sold out within 24 hours. The phone, on sale in Europe this year, has a web browser and media player. Apple boss Steve Jobs has said the iPhone will become Apple's third main business after the iPod music player and Mac computer, which generate $10bn in annual sales each. Apple said it hoped to sell 10 million iPhones by 2008 and grab a 1% share of the mobile phone market. According to Apple's website, there is already a two to four week waiting list to order the phone online. Apple said the iPhone's battery would give eight hours of talk time, six hours of web use or seven hours of video watching. The device costs either $499 or $599 and buyers must also commit to a two-year contract with AT&T that will cost them a minimum of $59.99 per month. As with many Apple products, prices in Europe are likely to be higher than direct currency conversions from the US dollar would suggest. The iPhone is due to debut in Europe in late 2007 and in Asia in 2008.

Buying an iPhone without a contract
What's the best way to beat the commitment involved in iPhone ownership? Bad credit. AT&T Inc. said on Friday that people who buy Apple Inc.'s much-hyped iPhone but do not meet its credit requirements will still be able to keep the phone without having to commit to a two-year contract. AT&T, the exclusive U.S. service provider for iPhone until 2009, had said in the months leading up to the phone's launch that customers would be required to sign up to a two-year contract in order to buy the device, which costs up to $600. The companies did not widely publicize that customers who do not pass its credit test have the option to pay for their service on a month-by-month basis, escaping what some consider a restrictive two-year plan. After buying an iPhone, customers are required to go to Apple's iTunes Web music store to activate the phones. While AT&T performed credit checks on customers who came to its stores to buy the iPhone on Friday, Apple stores did not. When it came to activating the device, AT&T customers were given a code to tap into iTunes, proving they were already approved for the service and allowing them to skip some steps in the online process. Apple customers would have to go through that process at home in front of their computer. If they found out that they did not meet the requirements, they would be offered the option of signing up for a prepaid plan, which allows customers to pay for calls in advance. While prepaid call charges are more expensive than per-minute charges for postpay customers who pay monthly bills, prepaid customers do not have to commit to keep the service. Postpay customers pay a hefty fee to leave contracts before they expire. In order to avoid such costly cancellations, mobile service providers often pay huge subsidies for customers' phones as a way to entice them into contracts. AT&T, however, is not subsidizing the iPhone's retail price tag. While several reviewers gave glowing endorsements to the iPhone this week, many criticized the phone's Web browsing speeds as it does not run on AT&T's fastest data links.

Online Customized Ads Move a Step Closer
Yahoo announced new tools for online advertising today that could pull the company ahead in the race for what is called “behavioral targeting,” that is, the ability to better tailor online advertisements to the people most likely to buy. The product, Yahoo SmartAds, would help marketers create custom advertisements on the fly, using information on individual buyers and information on real prices and availability from the vendors. For example, a person who had recently searched for information about blenders might see an ad from Target that gives the prices for the blenders that are on the shelves in the store closest to that person’s home. The Internet has long promised this kind of one-to-one marketing, but it has often been difficult for advertisers to customize display advertisements with a broad reach. Yahoo has struggled to catch up with Google in search advertising and has disappointed investors with its ad sales the past few quarters. SmartAds is one attempt to catch up. Although the technology is complex, the goal of SmartAds is simple: show the right advertisement to the right person at just the moment that he is about to pull out his wallet to make a purchase. SmartAds is being tested on Yahoo’s network of sites — which includes local newspapers as well as its own portal — by two major airlines,.

Internet radio compromise on the way?
It's looking ever less likely that Congress or the courts will act swiftly enough to save Webcasters from the doomsday that they argue will result from imminent new fees. But there are signs that Internet radio players and a group representing artists and record labels may be moving closer to a detente. A few weeks ago, we reported that the increased royalty rates set to kick in July 15 were poised to create a burden not only for small major Webcasters but for the largest ones as well. Because the fee hikes also include a $500 minimum payment per "channel," the three largest Webcasters alone--Yahoo, RealNetworks and Pandora--said they would owe more than $1 billion in the first year alone because of the thousands of unique "channels" their services offer. Now, with the deadline for the fees creeping ever closer and the outcry from Webcasters still at a fever pitch, relief may be on the way. SoundExchange, said that it has offered the Digital Media Association (DiMA), which counts the major Webcasters among its membership, a $2,500 cap on that annual requirement. According to DiMA executive director Jonathan Potter, however, there was a catch that wasn't mentioned in SoundExchange's press release. Namely, SoundExchange presented a written offer to apply that reprieve only through 2008, whereas the new U.S. Copyright Royalty Board rates extend through 2010.

HD-DVD gets set of new features
HD DVD has recently faced some head wind in its struggle to become the high-definition successor to the DVD, but its supporters are playing an ace from their sleeve with the arrival of the first discs that take advantage of its players' built-in Internet connections. Buyers who connect their HD DVD player to a broadband Internet line will be able to download a high-definition trailer for another movie, change menu styles and download additional subtitles. Those relatively modest Internet-dependent features will be beefed up in soon-to-be-released discs like the martial epic "300," due at the end of July. The HD DVD version of "300" will allow users to re-edit the movie, selecting and ordering the scenes as they see fit, and upload their edit to a server hosted by the studio, Warner Bros. The edit will be accessible to other users, who can download it to their players and see the movie in its new form. "300" will be available on the competing Blu-ray high-definition disc as well, but will lack the re-editing feature and a few other extras like a strategy game. "Blood Diamond," out July 3 on HD DVD, will allow watchers to participate in online polls after watching. The movie is already available on Blu-ray. Blu-ray, championed by Sony, scored a major win two weeks ago when Blockbuster Inc. said it would not stock HD DVDs when it expands its high-definition offerings to 1,450 stores next month. Blu-ray has stronger backing from Hollywood.

Net growth prompts privacy update
The world's leading industrialised nations have been forced to update privacy laws made obsolete by the huge volume of data moving around the net. Of particular concern to the 30 OECD (Organisation for Economic Co-operation and Development) states was the increasing amount of personal data flowing between nations. These cross-border torrents made it tricky to prevent unlawful use of people's data and for authorities to enforce existing laws. The newly adopted recommendations update a 27-year-old agreement. The 1980 guidelines laid the foundations of privacy laws amongst OECD states but did not account for the internet age, with instant access to global information. The recommendations are meant to augment member countries' existing privacy laws to aid co operation between different enforcement agencies. This is important, says the OECD, as most agencies only have jurisdiction in their own country. Investigations or complaints are difficult to pursue across borders.

Spam now accounts for 90% of all emails
Spam now makes up 90.06% of all email. Spam levels fluctuated throughout the month and some days saw levels drop to 86%. Like any other business, apparently spam shops also suffer poor trading days. Highest ever percentage of email classified as spam when it stopped 96.55% of all email scanned, correctly identifying it as junk mail. Narrowly beating February's record of 96.22%, the high level occurred during a weekend when there is less legitimate business email. Spam levels on week days during June peaked at 91.36%. With no major outbreaks recently and a drop in phishing activity, the overall percentage of emails stopped as viruses fell in June to just 0.61%.

The top five virus families in June 2007 were:
1. phishing: 96.56%
2. netsky: 0.91%
3. stration: 0.45%
4. bagle: 0.45%
5. mytob: 0.44%

Winning lunch with Warren Buffett
Two investors put in the winning bid of $650,100 in a charity auction to break bread with billionaire Warren Buffett. Mohnish Pabrai, who will put up most of the money, said Saturday that he's going to be well-prepared by the time he meets the famed investor at a New York steakhouse. Pabrai, who manages about $600 million for Pabrai Investment Funds in Irvine, Calif., teamed up with a friend to bid $30,000 more than the top bid from last year's auction. The 43-year-old investor said he bid unsuccessfully in the previous four auctions. The auction, which ended Friday night, benefits the Glide Foundation, which provides social services to the poor and homeless in San Francisco. Pabrai, his wife and two daughters will join his bidding partner, Guy Spier of Aquamarine Capital Management, and Spier's wife at the dinner with Buffett, the chairman and chief executive of Berkshire Hathaway. The group will dine at the Smith & Wollensky steakhouse in New York City. The restaurant owners contributed $10,000 to Glide and will host the lunch. Pabrai said he does not expect the date to be set for a few months. Pabrai said he will pay two-thirds of the winning bid — about $433,000 — while Spier will pay the other third, about $217,000. Pabrai said he attributes much of his own success to learning from Buffett and a few other investors.

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