Amazon isn't the only company ending its affiliate programs in a handful of US states in an effort to avoid being forced to collect sales tax in those states. The Wall Street Journal reports that Overstock.com has shut down its affiliate programs for California, Hawaii, North Carolina, and Rhode Island.

Each of those states has either adopted or is about to adopt a law that would require online retailers with in-state affiliate partners to collect sales tax on items sold. The idea is that a web publisher who posts links Amazon, Overstock, or other web stores and gets a commission for items sold through those links is essentially giving the online store a physical presence in the state, which means state tax laws come into play.

On the one hand, states are struggling thanks to the recession, and it makes sense that some states would turn to this tax as a revenue source. On the other hand, if companies like Amazon and Overstock decide that the laws are too burdensome and just pull out of those states altogether, then nobody wins.

It's worth pointing out that you're really supposed to pay sales tax for most things purchased on the internet. But in most cases, the burden is on the shoppers, not the retailers. If enacted, these state laws would require the stores to collect the taxes which consumers pretty much never pay voluntarily.

[via The Business Insider]

As I sat down this morning to begin working on a few small news items, Torrent Freak had dropped a bomb on my RSS: the Pirate Bay has been sold for just under $8 million US.

Swedish gaming giant Global Gaming Factory X will become the new owners, and The Pirate Bay as you and I know it will change forever. A necessary evolutionary step, according to Peter Sunde (brokep).

"We've been working on this project for many years. It's time to invite more people into the project, in a way that is secure and safe for everybody. We need that, or the site will die. And letting TPB die is the last thing that is allowed to happen!"

Why would a legitimate company want to purchase TPB? For starters, it's one of the top 100 most visited sites on the internet. While I'm not in the habit of referring to $8 million purchases as a bargain, it's hard to imagine being able to pick up any of the other 99 sites on the list for that kind of money.

Last week Amazon shut down its affiliate program in North Carolina. This week it's Rhode Island's turn.

The Amazon Associates program allows web publishers to post links to Amazon products and earn a commission every time someone places an order after clicking those links. And a handful of states including North Carolina, Rhode Island, and New York have decided that this essentially means that if even a single person in any of those states has an Amazon Associates account, that's essentially means that Amazon has a physical presence in the state... and that means that the state can force Amazon to collect sales tax on sales to customers in those states.

Amazon sees things differently, and rather than being forced into collecting sales tax, the company has decided to simply terminate its affiliate programs in North Carolina and Rhode Island, two states that are on the verge of passing bills that would require Amazon to collect sales tax. New York already passed a similar law last year, but Amazon has been fighting it in the courts. In the meantime, Amazon still operates an Associate program in New York, presumably because the company stands to lose more money in sales by pulling out of New York than it will lose by shutting down its North Carolina and Rhode Island programs.

Update: It looks like we can add Hawaii to the list of states that Amazon used to offer its associates program in.

Back in 2006, Netflix launched a contest to improve its movie recommendation algorithm. To win the Netflix Prize, a team has to improve the accuracy of the Netflix movie recommendations by 10% or more. The prize is a million dollars. Now it looks like one team may have won the contest, with a score of 10.05%. Although several teams had come close, nobody was able to hit the 10% mark until members of four top teams joined forces. It's not over yet, though. Other teams now have 30 days to best the 10,05% result, with the prize going to the best overall score.

BellKor's Pragmatic Chaos, the first team to top 10%, includes researchers from Yahoo and AT&T, and many of the team members have collected Netflix's Yearly Progress Prize for their attempts in previous years. The rules of the contest require that the winning team explain how their algorithm works, and allow Netflix to use their work. This victory may have come sooner than Netflix expected: the contest was scheduled to run until 2011 if no one could come up with a suitable solution before then.

Remember last year when New York passed a law to start collecting sales tax on items sold by online retailers with affiliate deals with New York residents? Basically stores like Amazon had been able to get around collecting sales tax in states where they had no physical retail presence. But New York decided that if John Smith posts links to Amazon products on his web site and gets a commission for any items sold, and if John Smith happens to live in New York, that constitutes a retail store.

Amazon, Newegg, and Overstock were having none of it, and Amazon even filed a lawsuit. It lost.

Now North Carolina is preparing to adopt a state budget that would similarly require retailers like Amazon to collect taxes if they have affiliate relationships with individuals living in North Carolina. And this time Amazon took a different approach. It canceled its affiliate relationships with North Carolina residents.

Search Engine Watch points out that North Carolina lawmakers have instituted tax breaks for a handful of other major companies including Apple and Google in an effort to convince the companies to build data centers in the state. The result could be that these companies will play by different rules than the ones that would have applied to Amazon had the retailer not severed its affiliate relationships in North Carolina.

Rapidshare is a service that makes it easy for users to upload and share files with a large number of people. It can come in handy whether you want to send a large file to a friend who has an email service with file attachment size limits or you want to share files with visitors to your website without paying a hefty web hosting bill.

But Rapidshare has never gained the respect that sites like YouSendIt have. YouSendIt provided a similar service, but it's aimed at sending files to just a handful of users. RapidShare, on the other hand, has become popular with users who upload copyrighted software, music, and movies. And today the company could be paying the price of allowing users to get away with those activities.

A German court is ordering Rapidshare to remove about 5,000 songs from its servers. The lawsuit was brought by GEMA, a group representing copyright holders. The court has ruled that Rapidshare must begin filtering content to prevent users from sharing any songs from artists covered by GEMA. The court estimates the value of those songs at about 24 million Euros (roughly $34 million).

Of course, it's pretty difficult to filter content on a site like Rapidshare, where users can easily ZIP files, change file names, or make other small changes to trick any filtering software that's put in place. I guess we'll have to see if Rapidshare ties to take any steps toward implementing content filters, and if the court decides that a good faith effort is good enough. Or maybe Rapidshare will just appeal the ruling.

[via TechCrunch]

Royalties have been a bone of contention between major record labels and Internet radio stations for years, and now it looks like the two sides only have 30 more days to iron out an agreement. After they failed to agree by the February 2009 deadline that Congress set last year, Congress took action to extend the deadline to 30 days from last Wednesday.

Until last year, the Copyright Royalty Board had the authority to determine the rates webcasters would have to pay for songs, but a 2008 bill called for negotiation on the issue instead. What's missing from all the coverage of this extension is what happens if an agreement can't be reached by the new deadline. According to the bill -- which was passed without amendment -- after the 30 day period passes, no agreement can be reached under the existing provisions, which means the rules of the game could change again at Congress' whim.

[via AppScout]

When Amazon created an iPhone app based on its popular e-reader device, the Kindle, it became clear that $10 books were as big or bigger than $400 readers in Amazon's business model. By allowing reading on other devices, Amazon has been able to make sales to customers who would never have bought a Kindle, and that's worked so well on the iPhone that other devices and book formats are now on the agenda.

According to Amazon CEO Jeff Bezos, the company looks at the ebook business and the gadget business as separate. Expanding to new devices isn't going to keep gadget-hungry consumers from buying a Kindle if they were planning to do it anyway, and plenty of customers who would never buy a Kindle might still buy a few books for their own devices. As for file formats, the Kindle already reads PDFs, but Bezos said other formats could be supported in the future. This may be one of the results we're seeing from Amazon's acquistion of Stanza, which supported formats that the Kindle doesn't yet.

Updated: At first, I thought that recent release of the Kindle Source Code might have something to do with developing for other platforms, but it was actually only done to comply with the Gnu Public License. Because the Kindle was built on some open-source GPL-licensed components, Amazon had to release the parts of the code that were modifications of those components. It unfortunately has nothing to do with enabling developers on other platforms to build apps that work with Kindle books.

I'm a big fan of the streaming music site Grooveshark. It's a great way to listen to practically any song and share new music with friends. EMI doesn't have any love for Grooveshark, though: the label is suing the service. It's not clear what the claims in the suit are, yet, but Grooveshark's side of the story is that they were negotiating some kind of licensing deal with the major labels, and EMI sued as a negotiating tactic.

I can see why a label would want to sue Grooveshark. According to one small label that's done business with them, Grooveshark just uses the labels' content to pay its bills, and offers little to nothing in advertising revenue in return. On the other hand, I don't know too many people who use Grooveshark as a replacement for buying a legitimate digital download of a song. You need to be online to listen, and you can't put streaming tracks on your iPod, so it hardly seems like an equivalent product.

I selfishly hope Grooveshark survives this lawsuit, because I enjoy being able to preview full tracks before I buy them. I also enjoy sharing music with my friends by embedding Grooveshark widgets or using the Facebook plugin, and maybe those friends will hear something they like and go buy an album. If I were the music industry right now, I might take those sales where I could get them.

[via AllThingsD]

There have been multiple stories in the news lately -- even on Download Squad -- about the huge percentage of blogs and Twitter accounts that have been briefly adopted and then abandoned. Some commentators have suggested that Twitter is a flash in the pan because of the large numbers of people dipping their toes into the service and then walking away without ever jumping all the way into the pool. All those one-tweet accounts represent curiosity about what Twitter has to offer, though, and in that sense, they're a good thing. News commentary site Slate has assembled a collection of interesting "one tweet wonders."

Blogs don't seem to be going away anytime soon, yet only 7.4 million of the 133 million blogs on the web are actually maintained. As a microblogging service and a publishing platform, Twitter should logically be putting up similar numbers. Certainly, the trend of Twitter growth will level off at some point, but I wouldn't be too worried about its health just yet.

[via Slashdot]

In response to a lawsuit by famed baseball manager Tony LaRussa, Twitter has decided to speed up the process of launching those verified accounts we've been hearing buzz about for the past few months.

In a post on the Twitter blog, Biz Stone asserts that while there's no way Twitter's going to pay off LaRussa after their support team got rid of the impostor, they're going to keep this kind of thing from happening in the future by adding a special badge to the accounts of notable people whose identities they can verify.

Because of the resources required, this is going to roll out slowly, starting with "public officials, public agencies, famous artists, athletes, and other well known individuals at risk of impersonation." Businesses won't be included in the initial test.

There's no launch date specified yet, but Twitter has begun to answer the sticky question of how they plan to verify the accounts. Apparently, a link to a Twitter account from the celebrity's official website is going to do the trick.

Artist Jorge Colombo drew the cover of the June issue of The New Yorker. That's not so unusual, considering that he's a very accomplished illustrator, designer and video artist who was first published in the New Yorker more than 10 years ago. What's unique about it is that this particular drawing was created with a $5 fingerpainting app for the iPhone, called Brushes.

Colombo spent an hour standing near the scene depicted on the cover, using Brushes to draw what he saw. Why draw on an iPhone instead of with a traditional sketchpad or canvas? For one thing, it's less conspicuous. Colombo said nobody noticed what he was doing or asked him about it. He also touted the iPhone's ability to provide a drawing space where paper can't: in the dark.

[via SmarterWare]

Remember the panic a while back about social music site Last.FM supposedly leaking listener data to the RIAA? TechCrunch sure does, because they started the rumor, and then faced accusations of shoddy reporting from basically the whole Internet when it turned out to be false. Well, now TechCrunch have uncovered some new information that shows they were right after all ... sort of.

Last.fm's parent company, CBS, was the source of the leak to the RIAA. Last.fm didn't know about it at the time, having just turned over the data to CBS, which explains their vehement denials. TechCrunch isn't saying Last.fm lied, but they are saying that CBS duped them during the reporting for their original story, asking TC to attribute a CBS quote to Last.fm.

The reason for the link, according to Techcrunch's source at CBS, is that the requester (it could have been the RIAA, or an individual label) had the ability to hurt CBS/Last.fm on streaming rates. The source also claims that Last.fm premium accounts aren't making any profit, and the leak was made with the intent of protecting Last.fm from increased rates that could put it out of business.

No comment from Last.fm yet, but it's still early (and a three-day weekend) at their headquarters in the UK. We'll know more when they've had a chance to respond.

Professional art critics endlessly debate the merits of various photographs -- heck, that's the entire premise of a photography contest! -- but what if a computer could reliably do the same thing? Researchers at Penn State put together a photo ranking algorithm that you can now test for yourself on the web. It's called Acquine, and it's based on data from large numbers of human ratings that determined what people find aesthetically pleasing in a photo.

For best results, give Acquine a high-resolution color photo, at least 600x600 pixels. It will give the photo an unbiased rating between 0 and 100. There's a library of the photos people have already uploaded, and you check them out in rank order to see if the algorithm gives the same results you would have. It's definitely an interesting exercise, and a thought-provoking comment on the challenges of replicating human aesthetic judgments through software.

When the Twitter team was first figuring out how people liked to use the site's public reply feature, it introduced a set of three options for seeing @replies: you could either see replies to and from people you follow, from people you follow to anyone else (regardless of following), or no @replies at all. It was a decent system, and it gave people a choice about how much noise they wanted @replies to make.

Twitter has now removed the option, and the new default for every user is that @replies that are both to and from someone you follow will be visible, but other @'s won't. The change was announced in a blog post called Small Settings Update. The move appears to have been made because an overwhelming number of users had been using replies this way, but I'm already seeing a bit of a frenzy in my normally-calm Twitter stream from people who liked discovering new users by seeing their friends @ them.

Perhaps the recent popularity of Twitter as a way to contact celebrities -- we're post-Oprah here, people -- made users a little sick of seeing the people they followed replying to celebrities they didn't follow or care about. There's a fairly simple solution to that, though: change the @reply settings yourself. I'm not sure what Twitter gained by removing the option, but I'm sure it will become clear when they respond to the backlash. My prediction: the settings go back to normal by the end of the week, or we hear a much better reason for the change.