The company has confirmed to All Things D that it is actively investigating several opportunities, and is in talks with several partners about gambling on the Internet.

A Zynga spokesperson provided this statement to AllThingsD:

“We build games and experiences that our players want and love. Zynga Poker is the world’s largest online poker game with more than 7 million people playing every day and over 30 million each month. We know from listening to our players that there’s an interest in the real money gambling market. We’re in active conversations with potential partners to better understand and explore this new opportunity.”

As with any new entrant in the space, Zynga will have to fulfill several requirements, meaning any major rollout is still months away.

The San Francisco-based social games maker will have to wade through a maze of state, national and international regulations. It will have to secure the correct licenses, and it also needs the right technology to make betting over the Internet secure.

For either of these last two requirements, a partnership or acquisition of an online gambling organization or other technology would make the most sense, instead of starting from scratch.

However, the effort could easily pay off.

Zynga was one of the first online gaming companies on Facebook, and continues to dominate the platform today. If it is able to get its toe in the door, just as the laws change in the U.S., it could be a leader yet again.

Back in October, Zynga first started showing broad interest in the casino category.

Zynga founder and CEO Mark Pincus announced at a press event that the company was going to launch Zynga Casino, which would serve as a single destination on Facebook to build off its strong brand in poker.

Its first new game, which has not launched yet, will be bingo.

Until now, the company’s efforts have been limited to building social and mobile games that are given away for free and monetized through the sale of virtual goods.

Getting users to make bets and part with real money could prove difficult, even for a company that has so many dedicated fans.

One thing Zynga has going for it is that social games are frequently compared to gambling because of their addictive nature — both lure consumers into spending a few more dollars to continue playing.

The casino genre has also been quietly racking up big numbers on Facebook.

Besides Zynga Poker, which is the most popular poker game on Facebook, and one of the company’s longest standing titles, there are many other sleeping giants. Sean Ryan, Facebook’s director of game partnerships, has even called them “unbelievable monsters.”

Said Ryan: “It turns out that people are completely okay winning virtual currency that they can never cash out.”

If players actually have the chance to win money, who knows the size of the opportunity?

A Facebook spokesperson said the company does not necessarily see a future for gambling on the social network. “We don’t have any plans to get into real-money gambling,” she said.

It’s unclear if that eliminates others from experimenting. In the meantime, it hasn’t stopped game makers from exploring the category or the concept.

Last week, Seattle-based Double Down Interactive, which was named by Facebook as one of the most popular game makers of 2011, was acquired by video poker giant International Game Technology for $500 million. It has 4.7 million monthly active users playing a variety of games, including blackjack, slots, video poker and roulette.

The deal closely followed Caesars Entertainment’s purchase of Playtika, an Israeli game company known for its Facebook title Slotomania. Caesars bought the company in two stages, the first of which was rumored to be purchased for up to $90 million.

Caesars, which filed to go public in November, declined to comment because it is currently in its quiet period.

However, some of its plans were revealed in a document filed with the Securities & Exchange Commission. It said its Caesars and World Series of Poker brands are dedicated to online gaming, and will take advantage of real-money gaming as it becomes legalized. Right now, Caesars Entertainment offers games “for fun” in jurisdictions where online gambling is not yet legal, but has identified the legalization of online poker in the U.S. as “the largest opportunity in online gaming in the near term.”

Still, the biggest hurdle is the law.

Internationally, several countries have permitted gambling for some time, and those areas represent the most immediate opportunities.

But there are signs of the U.S. beginning to open up, too. On the day before Christmas, the Department of Justice gave the online gambling community an early present, according to a blog post written by Nelson Rose, a professor and lawyer.

“President Barack Obama’s administration has just declared, perhaps unintentionally, that almost every form of intra-state Internet gambling is legal under federal law, and so may be games played interstate and even internationally,” Rose wrote.

Essentially, what the Justice Department did was to issue a new interpretation of the Wire Act of 1961. Under the new ruling, it interprets the act as only outlawing bets on sporting events — not all events and contests, according to an article in the San Francisco Chronicle.

With that clarification in place, it will now be up to every state to pass legislation outlining operating procedures. So far, Nevada and the District of Columbia have moved quickly to enact laws. To get other state laws passed could be a lengthy process, especially during an election year.

In the meantime, launching games only in Nevada and D.C. doesn’t represent the big opportunity everyone was hoping for.

To be competitive against Caesars and IGT, Zynga may have to partner or acquire companies that already have the licenses in place or the necessary expertise.

Some of the more obvious candidates include Bwin, which operates PartyGaming.com and is traded on the London Stock Exchange; Betfair, and other operators, like Bodog, Bet365 and 888.com. Many are based in the U.K. and handle a variety of casino games and sporting contests there.

The entrance into a new market, such as gambling, would take substantial resources, and Zynga has them thanks to its public offering. In December, it raised $1 billion, making it the largest Internet IPO since Google.

So, will Zynga be the next “unbelievable monster?” Clearly, it is willing to try.

ON THE CREEPY LINE
“There is what I call the creepy line.The Google policy on a lot of things is to get right up to the creepy line and not cross it.”
–October 2010

ON BRAIN IMPLANTS, WHICH WOULD CROSS THE CREEPY LINE
“I would argue that implanting something in your brain is beyond the creepy line–at least for the moment, until the technology gets better. As far as I know, we do not have a medical lab working on implants … As far as I know.”
–October 2010

ON PRIVACY:
“Streetview, we drive exactly once. So you can just move, right?”
–October 2010

ON CARS:
“It’s a bug that cars were invented before computers.”
–September 2010

ON THE BORG:
“What we’re really doing is building an augmented version of humanity, building computers to help humans do the things they don’t do well better.”
–September 2010

ON EXTENDING GOOGLE’S MISSION TO YOUR BRAIN:
“With your permission, you give us more information about you, about your friends, and we can improve the quality of our searches. We don’t need you to type at all. We know where you are. We know where you’ve been. We can more or less know what you’re thinking about.”
–September 2010

ON YOUR FACEBOOK PHOTOS
“Show us 14 photos of yourself and we can identify who you are. You think you don’t have 14 photos of yourself on the internet? You’ve got Facebook photos!”
–August 2010

ON FINANCE:
“One day we had a conversation where we figured we could just try to predict the stock market. And then we decided it was illegal. So we stopped doing that.”
–March 2010

ON YOUR NEEDS:
“I actually think most people don’t want Google to answer their questions. They want Google to tell them what they should be doing next.”
–August 2010

ON PRIVACY:
“If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.”
–December 2009

ON M&A AND “ADULT SUPERVISION”:
“One day Larry and Sergey bought Android, and I didn’t even notice. Think about the strategic opportunities that has created. Sergey found Google Earth one day while he was surfing on the Web. And then he walked into my office and told me he bought them. “And I said, ‘for how much, Sergey?’ And it turned out to be a few million.”
–October 2009

ON ‘DON’T BE EVIL’
“‘Don’t be evil’ is misunderstood. We don’t have an ‘Evilmeter’ we can sort of apply–you know–what is good and what is evil….The rule allows for conversation. I thought when I joined the company this was crap…it must be a joke. I was sitting in a room in [the] first six months…talking about some advertising…and someone said that it is evil. It stopped the product. It’s a cultural rule, a way of forcing the conversation especially in areas that are ambiguous.”
–June 2008

ON THE ‘EVILMETER’:
“We actually did an evil scale and decided not to serve [China] at all was worse evil.”
– Jan. 2006

ON EVIL:
“Evil is what Sergey says is evil.”
–-December 2002

ON IDIOTS:
“People are surprised to find out that an awful lot of people think that they’re idiots.”
–Date Unknown

ON RUNNING GOOGLE:
“Day-to-day adult supervision no longer needed!”
–-January 2011

However, even with the masses descending upon Las Vegas this week, Cricket has decided to delay the Muve music service and the launch of its first Muve-compatible phone.

Cricket had hoped to launch service in Las Vegas this week along with a number of other markets later this month.

Under its revised time frame, Cricket plans to launch the service in Las Vegas later this month, add nine more cities in February and roll it out to the rest of its markets this spring.

Although all the necessary licensing is in place, Cricket spokesman Greg Lund said that the company needed the extra time to ensure all of the software bugs were ironed out before it started asking customers to pay for the service.

“It’s got to be just perfect,” Lund told Mobilized in an interview at CES in Las Vegas.

Many years ago, before Google went public, I had an unusual late-night conversation in the lobby of the TED conference with its co-founder Larry Page about the prospect, about which–despite its inevitability–he had more than a little nervousness.

That would be: Taking the search company public.

After much ruminating, Page concluded that one of the more important reasons he felt compelled to have an IPO was to finally reward Google’s employees for all the work they had done to build the company.

While I have never had a similar chat with Facebook CEO Mark Zuckerberg about the powerful social networking company and an initial public offering, I suspect that he would not express any such sentiment.

And it’s not because Zuckerberg does not value his staffers any less than Page did–instead, it’s because he seems to value his privacy most of all.

I know–ironic!–given how many perceive the company to be cavalier about important issues related to disclosures of personal information uploaded to Facebook by the mountain-load daily by its hundreds of millions of users.

That aside, Zuckerberg’s clear intent to keep the lid on Facebook tight–with no information about the details of financial performance and other pertinent information a public offering would require be disclosed–is clearly about to become a nettlesome issue for the company.

While that effort at preserving secrecy by staying private has resulted in little more than cute Silicon Valley media guessing games about a possible IPO, its most recent machinations are too clever by a half.

That would be the new and giant investment from Goldman Sachs, as well as a deal to get $1.5 billion of pre-IPO shares in the hands of the investment bank’s rich customers.

Aside from the appalling image that only the very wealthy can get an early shot at Facebook shares, which instantly became a press meme yesterday after the Goldman deal was announced, pretending this single investment entity–called a “special purpose vehicle”–simply feels like a Wall Street trick.

Plus, a special purpose vehicle sounds like a car that bankers use to take people for a ride.

Thus, a gaggle of rich doctors in New Jersey are treated like one blob, instead of what is plainly true to all. As the old Latin legal phrase goes: Res ipsa loquitur (the thing speaks for itself).

Of course, this strategic move is designed to keep the number of primary stockholders under 500, which is the IPO tipping point for the Securities and Exchange Commission.

Therefore, by all means, let’s do it!

Or not, because I had an intense déjà vu about all this, and an unease that it felt vaguely familiar as a negative characteristic of Zuckerberg’s leadership that seems to cling to him.

That would be the dicey origins of Facebook, which remain a controversy to this day, including garnering an entire Hollywood movie on the subject.

Anyone with a passing knowledge of Facebook’s history knows the basic question: Did Mark Zuckerberg “steal” the idea for Facebook from the Winklevoss twins, as well as sandbag their efforts, while they were all students at Harvard University?

And, more to the point, was it illegal?

The Winklevii certainly think so, continuing in their Don Quixote quest to take Zuckerberg down in a series of ever-more-comical lawsuits.

For me, the answer is a lot more complex–I think Zuckerberg most definitely screwed with the Olympic rowing twins and it was very creepy that he did.

But, in terms of breaking the law, not so much.

Of course, if you are endeavoring to always act with ethics in your career, this should not be the bar set. But in practical terms, it was most definitely an aggressive knee-capping that is not uncommon in business.

Zuckerberg has shown similar tendencies many times since then, especially around the thorny issues of privacy, where fast-and-loose behaviors are quickly followed by the I’m-sorry-I-didn’t-mean-it excuses.

Okay, fine, I get it. Business is war.

But, as it moves into a more mature place, the question now is whether Facebook should keep stressing this kind of wink-wink-nudge-nudge propensity, because it feels–how can I say this in the nicest way–icky.

Plus it will surely attract unneeded attention from the SEC, which is already looking into the opaque market for trading shares of closely held companies and where Facebook is the star attraction.

And this is to say nothing of other issues–for example, could there be insider trading problems around the buying and selling of these private shares, as one person close to the situation has noted to me?

Facebook, of course, will defend what it is doing as above board, say it’s not unfair to give special access to its bounty to the very rich in what is essentially a private IPO and wag a finger at critics like me and tell us we don’t understand sophisticated financial issues.

But here’s what I grok without a Harvard Business School degree: It feels sneaky, it feels elite, it feels opaque, and this kind of fancy financing footwork could end in tears.

Because these legitimate questions on how Facebook handles its stock will continue to dog the company until–when he is good and ready (and finances at Facebook look prettier)–Zuckerberg eventually pulls the trigger on an IPO.

It would be nice, even if Wall Street applauds his cleverness, if he didn’t keep shooting himself in the foot along the way.

The company, best known for its prepaid phones, is offering a new service called Muve Music, which includes the cost of unlimited music downloads as part of a $55 monthly cellphone plan that also includes unlimited talk, text and Web. Basically, Muve adds about $10 to the cost of the monthly cellphone tab (which, incidentally, is about what one can expect to pay for the typical subscription music service).

The music is downloaded directly to the cellphone and is accessible as long as you remain a subscriber. From a technology standpoint, the service works by transferring the music to a secure partition of a 4GB digital memory card in the phone; Cricket says that partition can hold about 3,000 songs.

Cricket is launching the service next month with a single compatible phone–a color touchscreen feature phone known as the Samsung Suede, which will sell for $199. The service will first be available Jan. 6 in Las Vegas, with about 10 of Cricket’s other markets due to come on board later in the month.

What makes the service interesting is the approach–there is no tie to a PC whatsoever. Music comes to the phone, lives on the phone and is managed on the phone. In an interview, Cricket Vice President Jeff Toig said the service is geared to Cricket’s base of customers, many of whom don’t have a PC and broadband connection. It also allows them to get their music the way they do their other cellphone services–by paying in cash at the company’s retail outlets, thereby eliminating the need for a credit card.

The downside, of course, is that the music can only be played on the phone, though the phone can connect to a car stereo or external speakers over bluetooth or via a 3.5mm cable.

On the plus side, Muve doesn’t add much to the cost of a cellphone plan and eliminates some of the complexity traditionally associated with digital music. In addition to the ability to download and play tracks from all four major music labels, Muve subscribers can set any track to be either a ringtone or ringback tone (the music heard by callers while they are waiting for someone to answer).

Nokia tried a somewhat similar approach with its “Comes With Music” phones, which debuted in 2008. In that program, the cost of the music subscription was included in the price of the phone rather than in the monthly cellphone bill. Others, such as SpiralFrog, have tried to create services relying on advertising to subsidize the cost of providing music free to the end user.

Toig said that his customer base is one that typically isn’t downloading music from iTunes at 99 cents a pop, but includes a fair number of people that illegally download music from file sharing services.

The new service, he said, allows them to have a better experience without having to spend much more than they already are, while giving the record industry a chance to reach digital music customers they are largely missing out on today.

Unlike other services, which Toig said bank on the fact that people have access to a computer, Muve tries to make it easy to discover and download music directly from the phone. Customers can subscribe to curated feeds of music that get automatically updated, as well as find and download albums by name. A built-in social network allows them to see what their friends are listening to (assuming they also have a Muve-compatible phone).

“Nobody has done mobile music right,” Toig said.

Cricket won’t say how much of the incremental $10 in monthly revenue it is getting goes to the labels, but Toig said part of the bet is that Cricket will be able to reach customers that it otherwise could not.

“We’re obviously not doing this for a few percent,” he said. “We think this has appeal beyond our base to segments Cricket has not appealed to before.”

A spokesman for the studio, a unit of Time Warner Inc., declined to say whether it had yet figured out the source of the leak, but said an investigation was underway. The spokesman said the early release wasn’t a promotional gambit.

The watermarked footage was made available for download on BitTorrent file-sharing sites such as IsoHunt.com and thePirateBay.org. Copies were still available Wednesday, though Warner Bros. said it was working to remove the illegal copies.

Read the rest of this post on the original site

The company says it will comply with a court injunction to turn off “the searching, downloading, uploading, file trading and/or file distribution functionality, and/or all functionality” of its software, which remains one of the most popular methods of finding free–and illegal–music on the Web.

That means the company will stop offering downloads of its software, which you could still get on its site as of late Tuesday afternoon. And it also means that the company will disable the software that’s already been downloaded, according to people familiar with LimeWire’s plans.

I don’t know if LimeWire intends to cripple its client via a “kill switch” or some other method, but as of 20 minutes ago it hadn’t gone into effect–I was able to locate and download a version of the Clash’s “I Fought the Law” within a minute of booting up LimeWire’s software. (UPDATE for the technically minded, via a person familiar with the company’s plans: “They’ve taken down the relay severs on the Gnutella network which the Limewire client uses to figure out which other p2p clients have what info on them.” This should render existing clients effectively useless as anything other than a media player within the next nine hours, I’m told.)

LimeWire‘s client has been downloaded “hundreds of millions” of times, and is still responsible for the “vast majority” of usage on the Gnutella trading network, says Eric Garland, who runs the BigChampagne media tracking service. The company’s moves won’t affect other open source clients that run on the same Gnutella network, like FrostWire.

Meanwhile, LimeWire’s parent company, Lime Group, is prepping a new music service that it says will be legal, and should be due out in a month.

But the utility of that service depends on the participation of the big music labels, and at least for now the labels are still trying to extract a big piece of Lime Group’s hide. Court hearings in the damages phase of Lime Group’s hire are scheduled to resume in January. And this statement by industry trade group RIAA makes it clear that the labels aren’t feeling conciliatory:

“For the better part of the last decade, Limewire and Gorton have violated the law. The court has now signed an injunction that will start to unwind the massive piracy machine that Limewire and Gorton used to enrich themselves immensely. In January, the court will conduct a trial to determine the appropriate level of damages necessary to compensate the record companies for the billions and billions of illegal downloads that occurred through the Limewire system.”

Today’s announcement comes after Lime and the labels spent weeks trying to negotiate an out-of-court settlement; Federal District Court judge Kimba Wood actually handed down the injunction in August.

Here’s LimeWire CEO George Searle’s description of events, via  blog post:

As of today, we are required to stop distribution and support of LimeWire’s P2P file-sharing service as a result of a court-ordered injunction.

Naturally, we’re disappointed with this turn of events. We are extremely proud of our pioneering history and have, for years, worked hard to bridge the gap between technology and content rights holders. However, at this time, we have no option but to cease further distribution and support of our software.

It’s a sad occasion for our team, and for you–the hundreds of millions of people who have used LimeWire to discover new things.

While we have enabled open sharing and discovery for the past decade, LimeWire is mostly the product of the people who used it. You made LimeWire. Thank you for letting us being part of that. Your support and enthusiasm has fueled everything that we do.

During this challenging time, we are excited about the future. The injunction applies only to the LimeWire product. Our company remains open for business.

We remain deeply committed to working with the music industry and making the act of loving music more fulfilling for everyone – including artists, songwriters, publishers, labels, and of course music fans.Our team of technologists and music enthusiasts are creating a completely new music service that puts you back at the center of your digital music experience.

We’ll be sharing more details about our new service and look forward to bringing it to you in the future.

And here’s a LimeWire PR rep’s description of what’s going on:

As a result of a court ordered injunction, we are required to disable “the searching, downloading, uploading, file trading and/or file distribution functionality, and/or all functionality” of LimeWire’s P2P file-sharing software.

Please note LimeWire’s official statement on this legal development is as follows:

“While this is not our ideal path, we hope to work with the music industry in moving forward.  We look forward to embracing necessary changes and collaborating with the entire music industry in the future.”  – LimeWire Spokesperson.

An important point of clarification, LimeWire is not “shutting down”, in specific regarding our software, we are compelled to use our best efforts cease support and distribution of the file-sharing software, along with increased filtering.  And, that is what we are doing.

“As you can see from the unedited interview, my comments were made during a fairly long back and forth on privacy. I clearly misspoke. If you are worried about Street View and want your house removed please contact Google and we will remove it.”

– Google CEO Eric Schmidt on his suggestion that folks concerned about the company’s Street View service “just move“

PREVIOUSLY:

• Google CEO’s Advice to the Street-View Shy: The Video
• Schmidt: Don’t Like Google Street View Photographing Your House? Then Move.

• Google CEO’s Advice to the Street-View Shy: The Video
• Google CEO Apologizes For Street View Quip

“The problem with Google is that Eric Schmidt is creepy….The industry is filled with eccentric CEOs–billionaires who, say, wear a wardrobe that consists of nothing but identical black shirts and Levi’s 501 jeans, or who dress as a samurai warrior, including swords, at their home. But Schmidt doesn’t seem eccentric (or at least not merely so). He seems creepy.”

– John Gruber, Daring Fireball

Google CEO Eric Schmidt says the company’s “policy is to get right up to the creepy line and not cross it.” And while that may be true of Google, it’s clearly not true of Schmidt, who lately has been happily high stepping across the creepy line like the grand marshal of the Tone-Deaf Technocrat Parade.

In the past year alone he has:

• Addressed criticisms of Google’s stance on privacy by saying, “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.”
• Claimed people want Google to “tell them what they should be doing next.”
• Said of Google, “We know where you are. We know where you’ve been. We can more or less know what you’re thinking about.”
• Said this: “One day we had a conversation where we figured we could just try to predict the stock market. And then we decided it was illegal. So we stopped doing that.”
• Suggested name changes to protect adults from the Web’s record of their youthful indiscretions.
• Said this: “What we’re really doing is building an augmented version of humanity, building computers to help humans do the things they don’t do well better.”

Nice selection of remarks with which to begin a Bartlett’s Unsettling Quotations From Powerful CEOs, right?

And Schmidt’s far from done. Appearing on CNN’s “Parker Spitzer” program last week, he said that people who don’t like Google’s Street View cars taking pictures of their homes and businesses “can just move” afterward to protect their privacy. Ironically, he said this on the very day that Google admitted those cars captured more than just fragments of personal payload data.

Interestingly, CNN has since edited that quote out of Schmidt’s segment. Did Google ask CNN to remove it? Who knows. Perhaps the company has finally realized that Schmidt’s penchant for indulging in this sort of pedantic dorkery doesn’t do much for its public image.

Freaking people out with asinine power-tripping pronouncements might be great fun for Schmidt, but it isn’t a wise PR strategy, particularly when Google is a company about which the public and government are increasingly concerned.

Schmidt really should know this.

Actually, it’s hard to believe he doesn’t.

Which is just…creepy.

UPDATE: Here’s Google’s official comment on Schmidt’s “just move” remark as given MarketWatch: “The point Eric was making is that our Street View service provides only a static picture in time, and doesn’t provide real-time imagery or provide any information about where people are. Of course, we also allow users to request that their home be removed from Street View.”

UPDATE: CNN says Google did not ask that Schmidt’s remark be removed from the broadcast version of the show. “Producers routinely make editorial decisions about what sound bites to include in their shows,” a spokesperson told me via e-mail. “In this case, the clip was posted on cnn.com and disseminated to other media outlets and was widely available.”

Comcast did have reasonably good news to deliver this morning. It signed up more new customers than Wall Street expected, though it had to cut prices to do so. We’ll see if that mollifies investors, who really have been salty–look what’s happened to CMCSA shares since news of the GE (GE) transaction broke:

Since Comcast barely addressed the NBCU deal during its earnings call this morning, it had more time to tackle other topics. A recurring theme: How would increased Web video consumption affect the company?

The answer: No one knows, exactly.

On the one hand, there’s the threat that consumers will be less likely to pay for cable TV if they’re getting their shows over the Web, whether it’s through illegal streams or legitimate “over the top” services like the one Apple (AAPL) is trying to assemble.

That’s why Comcast CEO Brian Roberts described his company’s “authentication” efforts, which are in a beta test now but are scheduled to go nationwide next month, as an effort to make sure that people who consume Web video do so “in a way that secures the existing model.”

That is–he’d like them to keep paying Comcast for a TV subscription even though they’re watching shows online. Tough sell.

On the other hand, even if you stop paying for cable TV, you still have to pay someone to connect you to the Web, and it’s very likely that company will be Comcast. And if you’re not paying Comcast for TV, there’s a very good chance you’ll pay more for your Internet connection.

“I’ve been saying for a long time that I think video over the Internet is more friend than foe,” Roberts said this morning. Let’s see if Wall Street agrees.

Depends on who you ask, of course.

Executives at Veoh say Judge A. Howard Matz has given them a new lease on life, and at least some of the company’s investors are doing some chest-beating. Universal, the world’s largest music label, says it’s confident it will win an appeal.

You can get the same split opinion by asking two different companies that happen to be locked in a similar fight. Executives at Google’s (GOOG) YouTube, which is trying to fend off a copyright suit filed by Viacom (VIA), say the Veoh ruling bolsters their case. You can guess what Viacom says.

The gist of the fight: Universal says Veoh didn’t try hard enough to keep illegally uploaded material off the video site; Veoh says it made a good-faith effort. Matz agreed with Veoh and tossed out Universal’s claims.

Even if you disregard the posturing, it’s fair to say there’s a genuine debate over the ruling’s meaning. Veoh, along with some of my bloggy colleagues, is treating the decision as the final word on Web copyright disputes, or at least those that involve the Digital Millennium Copyright Act.

And Matz certainly slapped Universal around. But it’s worth noting that copyright owners have lost Web cases in the Ninth District before, but ultimately won on appeal. Ask Grokster, the now-defunct file-sharing network that dissolved after a 2005 Supreme Court ruling.

You can read all of Matz’s judgment at the bottom of this post. But this excerpt, in which he argues that simply having illegal material on your site isn’t a crime, and neither is knowing about it (at least, in a general sense), gives you a good idea of Matz’s thrust and tone:

No doubt it is common knowledge that most websites that allow users to contribute material contain infringing items. If such general awareness were enough to raise a “red flag,” the DMCA safe harbor would not serve its purpose of “facilitat[ing] the robust development and world-wide expansion of electronic commerce, communications, research, development, and education in the digital age,” and “balanc[ing] the interests of content owners, on-line and other service providers, and information users in a way that will foster the continued development of electronic commerce and the growth of the Internet.”

Legal debate aside, the ruling does give a practical benefit for Veoh. It allows the company to fetch a higher price on the auction block.

CEO Dmitry Shapiro has been shopping the site to bidders over the summer, and as of a few months ago, he was willing to accept less than the $70 million investors like Time Warner (TWX), Goldman Sachs (GS) and former Disney (DIS) CEO Michael Eisner have poured into the site.

Selling a Web video site in 2009 is a tough challenge without a handicap, but the lawsuit was a big one. It was a huge time-and-money suck–Veoh may have spent as much as $6 million fighting the case in the last two years–and more important, the unresolved case was a huge liability. Who wants to buy a lawsuit?

Now, Shapiro says, Veoh’s options include not selling at all. He insists that some of Veoh’s existing backers are willing to recapitalize the company and that new investors might join in as well.

I’ll take him at his word, but if I had to bet, I’d wager that Veoh ends up getting acquired sooner than later. Maybe quite soon–the company has a board meeting today.

Wonder what they’ll talk about?

VEOH –

Still here? How about that? You get a bonus video! (But be warned: Pacino chews up a lot of scenery here, and there is some impassioned cursing.)

The paper says “some readers” have seen unauthorized pop-up ads promoting antivirus software on NYTimes.com, and warns visitors who see the ad not to click on it but to restart their browsers instead. While the Times doesn’t spell this out, the newspaper has likely had its site hijacked by a “malware” scammer who is trying to trick visitors into installing pernicious software onto their hard drives.

MediaMemo reader Tim Minter passed along an image of the pop-up below (click to enlarge). Here’s his description of the way it appeared on his desktop:

The ad hijack[ed] my computer. Say I’m reading an article (the Clean Water Act was the one that caught me). It then redirects my browser involuntarily to sex-and-the-city.cn. That site then redirects to the ad I screen-captured.

At no time did I click anything. That’s what is so nefarious about this malware.

Thankfully, since I run OS X, I knew immediately it was malware (seeing WindowsXP on a Mac where that’s not installed is suspicious).

You generally have to travel farther down the Internet publishing food chain to find this kind of bogus ad–go hunting for porn and/or illegal downloads, for instance, and you’ll find plenty of this stuff.

But Web advertising is still a wild and woolly place, and this type of thing still plagues high-end publishers too. Sometimes it’s the fault of ad networks the publishers use to move their unsold inventory; sometimes the bogus ads are bought directly from the publishers themselves.

I’ve asked both the Times PR staff and ad tech team for additional information about the ads, but haven’t heard back yet. Still, you have to give the paper credit for flagging this on its front page at all.

UPDATE: The Times’ explanation: A hacker duped the paper by buying the ad directly from the paper’s sales staff, then disguising it as a legit ad for a week.

Amazon has explained why it has been deleting some novels from its customers’ Kindles: It shouldn’t have been selling them in the first place.

Amazon (AMZN) says the copies of George Orwell’s “Animal Farm” and “1984″ it removed without warning from some Kindles this week are “illegal” because the publisher didn’t have the rights to sell them.

Won’t happen again, the e-commerce giant says. Sort of:

These books were added to our catalog using our self-service platform by a third-party who did not have the rights to the books. When we were notified of this by the rights holder, we removed the illegal copies from our systems and from customers’ devices, and refunded customers. We are changing our systems so that in the future we will not remove books from customers’ devices in these circumstances.

Here’s the thing: I refrained from making any Orwell references when I wrote about this earlier today. But doesn’t this statement have a hint of Newspeak to it?

If Amazon wanted to reassure customers worried that digital media they buy from the company might disappear, unannounced, it could do so very easily. It could just say: “We won’t be taking away stuff we sell you ever again. You buy it, you own it. Doesn’t matter if it’s a book, a CD, or a collection of bytes.”

Because, as I noted before, that’s basically what the Kindle license already says: Amazon says it “grants you the non-exclusive right to keep a permanent copy of the applicable Digital Content.” The company doesn’t seem to add any caveats that I can see.

I’m hoping Amazon’s language here is just an awkward bit of PRspeak, and not a lawyerly way of reserving the right to pull stuff off Kindles sometime down the road. But I’ve asked, and will let you know if I hear back.

An interesting variation on the “membership drive” and one that’s gotten Tagged in hot water with New York Attorney General Andrew M. Cuomo, who intends to sue the company “for deceptive e-mail marketing practices and invasion of privacy.”

“This company stole the address books and identities of millions of people,” Cuomo said in a statement. “Consumers had their privacy invaded and were forced into the embarrassing position of having to apologize to all their e-mail contacts for Tagged’s unethical–and illegal–behavior. This very virulent form of spam is the online equivalent of breaking into a home, stealing address books and sending phony mail to all of an individual’s personal contacts. We would never accept this behavior in the real world, and we cannot accept it online.”

Tagged, for its part, claims this is all just a big misunderstanding. In a statement of its own, the company denied abusing its users’ personal address books, saying, essentially, it had their consent to do so.

“When our company tested a new registration process, we discovered that our ‘invite your friends’ language was confusing,” said Tagged CEO Greg Tseng. “…In no instance did Tagged access a person’s personal address book without their consent and no emails were sent without the person giving us permission. We realize that some were confused and accidentally agreed to invite their friends.”

Oh, and next time you register for a social network, be sure to read its Terms of Service–especially the portions that are presented in ALL CAPS. They might be important. From Tagged’s Terms of Service:

“E) Notice Regarding Commercial Email

MEMBERS CONSENT TO RECEIVE COMMERCIAL E-MAIL MESSAGES FROM TAGGED, AND ACKNOWLEDGE AND AGREE THAT THEIR EMAIL ADDRESSES AND OTHER PERSONAL INFORMATION MAY BE USED BY TAGGED FOR THE PURPOSE OF INITIATING COMMERCIAL E-MAIL MESSAGES.”

An interesting variation on the “membership drive” and one that’s gotten Tagged in hot water with New York Attorney General Andrew M. Cuomo, who intends to sue the company “for deceptive e-mail marketing practices and invasion of privacy.”

“This company stole the address books and identities of millions of people,” Cuomo said in a statement. “Consumers had their privacy invaded and were forced into the embarrassing position of having to apologize to all their e-mail contacts for Tagged’s unethical–and illegal–behavior. This very virulent form of spam is the online equivalent of breaking into a home, stealing address books and sending phony mail to all of an individual’s personal contacts. We would never accept this behavior in the real world, and we cannot accept it online.”

Tagged, for its part, claims this is all just a big misunderstanding. In a statement of its own, the company denied abusing its users’ personal address books, saying, essentially, it had their consent to do so.

“When our company tested a new registration process, we discovered that our ‘invite your friends’ language was confusing,” said Tagged CEO Greg Tseng. “…In no instance did Tagged access a person’s personal address book without their consent and no emails were sent without the person giving us permission. We realize that some were confused and accidentally agreed to invite their friends.”

Oh, and next time you register for a social network, be sure to read its Terms of Service–especially the portions that are presented in ALL CAPS. They might be important. From Tagged’s Terms of Service:

“E) Notice Regarding Commercial Email

MEMBERS CONSENT TO RECEIVE COMMERCIAL E-MAIL MESSAGES FROM TAGGED, AND ACKNOWLEDGE AND AGREE THAT THEIR EMAIL ADDRESSES AND OTHER PERSONAL INFORMATION MAY BE USED BY TAGGED FOR THE PURPOSE OF INITIATING COMMERCIAL E-MAIL MESSAGES.”

According to a new survey from Vlingo, a company that develops speech-recognition technology for mobile phones, 26 percent of its nationwide sample of 4,816 mobile phone users said they sent texts while driving. This despite laws against Driving While Texting in some seven states and some nasty DWT-related accidents. The states with the highest percentage of DWT drivers: Tennessee (42 percent), New Jersey (35 percent), Alabama (34), Idaho (33) and Oklahoma (31.7).

Ironically, 83 percent of the people surveyed said they feel texting while driving should be illegal.

“In just one year, the public conversation about the issue of DWT has escalated, particularly in the wake of some high-profile accidents,” Dave Grannan, chief executive of Vlingo, said in a statement. “Texting is such an integral component of our daily lives, and the cautionary tales about DWT danger have not stemmed the tide. We predicted last year that this problem would get worse, and it has since more people are texting. The good news is that many state legislatures are starting to take up this issue, and today more advanced technologies exist that can increase safety on the roads.”

My God, if one in four drivers admit to driving while texting, how many more were too ashamed to?

Microsoft, Yahoo and Google have agreed to fork over millions of dollars to settle allegations that they sold ads promoting illegal online gambling. Without admitting or denying liability, the three companies agreed to forfeit a collective $31.5 million in advertising revenue and to underwrite public-service campaigns warning that online gambling is illegal. Of the three, Microsoft has the biggest forfeiture and fine, totaling $21 million. Of that, $4.5 million will go the government, $7.5 million to the International Center for Missing and Exploited Children, and $9 million to a PSA campaign. Yahoo’s on the hook for $7.5 million–$3 million to the government and $4.5 million to another PSA campaign. Google’s tab is just $3 million.

“These sums add to the over $40 million in forfeitures and back taxes this office has already recovered in recent years from operators of these remote-control illegal gambling enterprises,” U.S. Attorney Catherine L. Hanaway of the Eastern District of Missouri said in a statement. “Honest taxpayers and gambling industry personnel who do follow the law suffer from those who promote illegal online behavior.”

Microsoft, Yahoo and Google have agreed to fork over millions of dollars to settle allegations that they sold ads promoting illegal online gambling. Without admitting or denying liability, the three companies agreed to forfeit a collective $31.5 million in advertising revenue and to underwrite public-service campaigns warning that online gambling is illegal. Of the three, Microsoft has the biggest forfeiture and fine, totaling $21 million. Of that, $4.5 million will go the government, $7.5 million to the International Center for Missing and Exploited Children, and $9 million to a PSA campaign. Yahoo’s on the hook for $7.5 million–$3 million to the government and $4.5 million to another PSA campaign. Google’s tab is just $3 million.

“These sums add to the over $40 million in forfeitures and back taxes this office has already recovered in recent years from operators of these remote-control illegal gambling enterprises,” U.S. Attorney Catherine L. Hanaway of the Eastern District of Missouri said in a statement. “Honest taxpayers and gambling industry personnel who do follow the law suffer from those who promote illegal online behavior.”

The DOJ says the $222,000 in damages awarded to the Recording Industry Association of America in the Virgin Records America et al. v. Thomas copyright-infringement case is constitutional. Seems it didn’t quite buy Thomas’s argument that fining someone – particularly a single mother of two – $222,000 for songs that could be bought for $24 on iTunes violates a Supreme Court precedent that prohibits fines that are “so severe and oppressive as to be wholly disproportioned to the offense or obviously unreasonable.”

From the DOJ’s brief:

Although defendant claims that plaintiffs’ damages are 70 cents per infringing copy, it is unknown how many other users–‘potentially millions’–committed subsequent acts of infringement with the illegal copies of works that the defendant infringed. Accordingly, it is impossible to calculate the damages caused by a single infringement, particularly for infringement that occurs over the Internet. Furthermore, plaintiffs contend that their witnesses ‘testified to the substantial harm caused by the massive distribution of their copyrighted sound recordings over the Internet, including lost revenues, layoffs and a diminished capability to identify and promote new talent…’

“Most recently, Congress has crafted a statute that serves as a deterrent to those infringing parties who think they will go undetected in committing this great public wrong, as well as providing compensation to copyright owners who have to invest resources into protecting property that is often unquantifiable. Accordingly, given the findings of copyright infringement in this case, the damages awarded under the Copyright Act’s statutory damages provision did not violate the due process clause…”

Terry Gross: “Are you trying to say to me that all that matters to you is money?”
Gene Simmons: “I will contend, and you try to disprove it, that the most important thing as we know it on this planet, in this plane, is, in fact, money. Want me to prove it? …The first thing you need–besides air, which so far is free, and by the way if you went scuba diving, you’re paying for air–the other thing besides that is food, it’s what we need to survive. I don’t know what other tool I would use besides money to buy it. Although, as a woman of course you have the ability to sell your body, then get the money, and then, with that, get food. But ultimately money is part of it.”

–Excerpt from Gene Simmons’s Feb. 4, 2002, interview with Terry Gross, host of NPR’s “Fresh Air”

Kiss fans hoping for a new album will have to make do with the band’s “Rock & Roll All Night” toothbrush instead. Because according to Kiss frontman Gene Simmons, the band won’t be going into the studio anytime soon.

Seems Simmons has been a bit disillusioned with the recording industry lately–particularly its failure to stamp out illegal file-sharing. “The record industry doesn’t have a f—ing clue how to make money,” Simmons told Bilboard. “It’s only their fault for letting foxes get into the henhouse and then wondering why there’s no eggs or chickens. Every little college kid, every freshly scrubbed little kid’s face should have been sued off the face of the earth. They should have taken their houses and cars and nipped it right there in the beginning. Those kids are putting 100,000 to a million people out of work. How can you pick on them? They’ve got freckles.”

Said Kelly: “We are fairly confident that our operation is well presented to users and that they can make their own choices about whether they want to affiliate with brands that put up Facebook pages.”

Daniel J. Solove, the George Washington University Law School professor who first noted Facebook’s Social Ads might be illegal, finds Kelly’s argument unpersuasive. “Suppose Michael Jordan says on national TV that he likes Wheaties,” Solove posits. “Does this allow Wheaties to use his image on its cereal box or in a commercial? The answer is no. The fact that Jordan says he likes Wheaties can be used in a news story; it can be used in a biography of Jordan. But it cannot be used in a commercial advertisement. … [Social Ads] are not merely reporting facts (which is OK under appropriation and publicity); instead, they are using the reputation and standing of people to promote commercial products and services.”

Facebook would likely argue users agree to this when they accept the company’s terms of service, which grant it license to use their “content” in pretty much any way it chooses.

By posting User Content to any part of the Site, you automatically grant, and you represent and warrant that you have the right to grant, to the Company an irrevocable, perpetual, nonexclusive, transferable, fully paid, worldwide license (with the right to sublicense) to use, copy, publicly perform, publicly display, reformat, translate, excerpt (in whole or in part) and distribute such User Content for any purpose on or in connection with the Site or the promotion thereof.”

But there’s no language in these terms of service that explicitly grants it the right to use Facebook members’ names and likenesses in a commercial endorsement–unless Facebook is counting on a broooooad interpretation of “reformat” and “translate.”

Said Kelly: “We are fairly confident that our operation is well presented to users and that they can make their own choices about whether they want to affiliate with brands that put up Facebook pages.”

Daniel J. Solove, the George Washington University Law School professor who first noted Facebook’s Social Ads might be illegal, finds Kelly’s argument unpersuasive. “Suppose Michael Jordan says on national TV that he likes Wheaties,” Solove posits. “Does this allow Wheaties to use his image on its cereal box or in a commercial? The answer is no. The fact that Jordan says he likes Wheaties can be used in a news story; it can be used in a biography of Jordan. But it cannot be used in a commercial advertisement. … [Social Ads] are not merely reporting facts (which is OK under appropriation and publicity); instead, they are using the reputation and standing of people to promote commercial products and services.”

Facebook would likely argue users agree to this when they accept the company’s terms of service, which grant it license to use their “content” in pretty much any way it chooses.

By posting User Content to any part of the Site, you automatically grant, and you represent and warrant that you have the right to grant, to the Company an irrevocable, perpetual, nonexclusive, transferable, fully paid, worldwide license (with the right to sublicense) to use, copy, publicly perform, publicly display, reformat, translate, excerpt (in whole or in part) and distribute such User Content for any purpose on or in connection with the Site or the promotion thereof.”

But there’s no language in these terms of service that explicitly grants it the right to use Facebook members’ names and likenesses in a commercial endorsement–unless Facebook is counting on a broooooad interpretation of “reformat” and “translate.”

Social actions are powerful because they act as trusted referrals and reinforce the fact that people influence people. It’s no longer just about messages that are broadcasted out by companies, but increasingly about information that is shared between friends. So we set out to use these social actions to build a new kind of ad system.”

–Facebook CEO Mark Zuckerberg

“Once every hundred years media changes.” With that vainglorious pronouncement, Zuckerberg on Tuesday ushered in a new era of socially networked advertising.

Or did he? Because according to Daniel J. Solove, an associate professor of law at the George Washington University Law School, combining a Facebook user’s name and image with an advertiser’s message in a so-called “Social Ad” without that user’s express permission may be illegal.

“It seems as though Facebook might be assuming that if a person talks about a product, then he or she consents to being used in an advertisement for it,” Solove writes. “But such an assumption might be wrong, and the use of a person’s name or image in an advertisement without that person’s consent might constitute a violation of the appropriation of name or likeness tort. … According to the Restatement (Second) of Torts § 652C: ‘One who appropriates to his own use or benefit the name or likeness of another is subject to liability to the other for invasion of his privacy.’ “

Now Facebook claims no personally identifiable information is shared with an advertiser in creating a Social Ad. “Facebook has always empowered users to make choices about sharing their data, and with Facebook Ads we are extending that to marketing messages that appear on the site,” the company explains. “Facebook users will only see Social Ads to the extent their friends are sharing information with them.” That’s certainly a thoughtful assurance. But it doesn’t exactly address the issue of Facebook appropriating user identities for its own benefit.