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LOS ANGELES - Warner Bros. says it’s launching two Web sites to capture new ad revenue and a younger generation of viewers.

Time Warner Inc.’s Warner Bros. Television Group says TheWB.com will replay full episodes of shows such as “Friends” and “Smallville” along with made-for-online shows. The site is set to launch in a test format next month.

A second site, KidsWB.com, is aimed at children and debuts Monday. It features animated characters from the Warner Bros. library, which includes Bugs Bunny and Scooby Doo and DC Comics heroes like Batman.

The group says both sites will be supported by ad revenue, with deals already in place with Mattel Inc., McDonald’s Corp. and Johnson & Johnson.

NEW YORK (Reuters) - Nine major record labels filed suit against an online music provider on Monday, accusing Project Playlist Inc of a “massive infringement” of their copyrights to the songs of artists such as U2 and Gwen Stefani.

Project Playlist (http;//www.projectplaylist.com) enables its users to easily find, play and share music with others for free, according to the suit filed in U.S. District Court in Manhattan.

The website compiles a vast index of songs on the Internet and users can “quickly and easily search the index for recordings by their favorite artists. At the click of a mouse, Project Playlist instantly streams a digital performance of the selected recording to the user, who can listen to it on his or her computer or mobile device,” the lawsuit said.

“Project Playlist also has begun optimizing its site for use on iPhones and iPods,” the record companies said in the suit.

The Beverly Hills, California-based company, an affiliate of KR Capital Partners LLC, also allows its users to embed their personalized playlists on social network sites such as MySpace, Facebook and Blogger, the lawsuit said. The record companies said projectplaylist.com gets more than 600,000 daily users, nearly 9.5 million average page views per day.

“In short (Project Playlist's) entire business amounts to nothing more than a massive infringement” of the record companies' copyrights, the record companies said.

They are seeking to enjoin Project Playlist from continuing to offer its customers free music and are also seeking unspecified damages.

Attempts to reach Project Playlist for comment were unsuccessful.

The nine record labels are: Warner Music Group Corp's Atlantic Recording Corp, Elektra Entertainment Group Inc and Warner Bros. Records Inc; EMI Group Plc's Capitol Records LLC, Priority Records LLC and Virgin Records America Inc; and the Interscope Records, Motown Record Co LP and UMG Recordings Inc labels of Vivendi SA's Universal Music Group.

(Reporting by Leslie Gevirtz; editing by Gerald E. McCormick)

SAN FRANCISCO (Reuters) - Criminal action video game “Grand Theft Auto 4″ won near-perfect praise in early reviews on Monday, boosting the shares of publisher Take-Two Interactive Software Inc (TTWO.O) as much as 3.4 percent ahead of the game's midnight launch.

The accolades lavished on “Grand Theft Auto 4,” long expected to be the best-selling game of 2008, pushed Take-Two shares as high as $27.10, more than a dollar higher than the $25.74 per share offered for the company by rival Electronic Arts Inc(ERTS.O).

It was also the highest level for the stock since February 28, when it touched $27.61 three days after Electronic Arts went public with its $2 billion hostile bid.

“'Grand Theft Auto IV' is a violent, intelligent, profane, endearing, obnoxious, sly, richly textured and thoroughly compelling work of cultural satire disguised as fun,” The New York Times raved.

The glowing reviews and jump in the stock may bolster the position of Take-Two Chairman Strauss Zelnick, who has rejected EA's offer as too low and has insisted on waiting until after the game's launch before entering discussions.

“Clearly there were very high expectations for the game going in and it looks like from the early buzz that it could exceed those already very optimistic expectations,” said UBS analyst Ben Schachter,

“These ratings are quite extraordinary. It's something special and helps us understand why Take-Two was so confident and adamant that they wanted to wait,” Schachter said.

Many analysts have long said EA may have to raise its bid by a dollar or two per share.

“We continue to believe that $26 per share is a good price,” said Arvind Bhatia, director of research at Sterne Agee. “That said, if GTA is more successful than expected, it will provide some leverage. We would not be surprised if the deal ultimately gets done a couple of bucks higher.”

Take-Two and Electronic Arts were not immediately available to comment.

The Tuesday launch of “Grand Theft Auto 4″ is expected to be the biggest entertainment event of the year, with first-week sales of up to $400 million.

Colin Sebastian, an analyst with Lazard Capital Markets, said EA had probably already considered the likelihood that the game would blow away expectations.

“The bigger question for Take-Two management is how they create shareholder value above and beyond EA's offer, in order to justify their reluctance to negotiate, and given the possibility that EA could walk away,” Sebastian said.

Scores on gaming review aggregation site Metacritic.org show the game, in which players work for a crime syndicate in a fictionalized New York, is on track to be the highest-rated video game of all time.

Based on more than a dozen reviews so far, the version of GTA4 for Sony Corp's (6758.T) PlayStation 3 game console has scored a perfect 100 while that for Microsoft Corp's (MSFT.O) Xbox 360 has achieved a score of 99.

The game's high quality also indicate that Take-Two and the Rockstar studio that made the game are also well-run operations, with the potential to crank out more hits, said Mike Hickey, an analyst with Janco Partners.

“EA should just pay up and just get this deal done and quit being so cheap about it. You've made a $2 billion bid … and you're worried about three or four dollars per share,” Hickey said.

(Reporting by Scott Hillis, editing by Gerald E. McCormick)

SAN FRANCISCO - Intel Corp. is ratcheting up the competition with smaller rival Advanced Micro Devices Inc. by teaming up with supercomputer maker Cray Inc., which for the past six years has used only AMD chips in its high-performance machines.

The multiyear deal Santa Clara-based Intel announced Monday bolsters its server business — a major source of its revenue — and snaps an exclusive arrangement that kept its chips out of some of the world’s most powerful machines.

Supercomputers are used heavily by government agencies for data-crunching and weapons development, while universities and private companies use them to conduct scientific research and model complex financial transactions.

Seattle-based Cray has three machines in the top 10 on the latest list of the world’s most powerful supercomputers, behind only IBM Corp., which has four.

Intel and AMD make microprocessors that act as the brains of computers.

AMD stole substantial market share from Intel a couple of years ago with chips that were more energy-efficient than Intel’s. But Intel has since fought back, taking back market share and breaking AMD-exclusive deals.

Cray computers with Intel chips aren’t expected until 2011 or 2012.

IDAHO FALLS, Idaho - Federal researchers say they’ve developed a human identification test that’s faster and possibly cheaper than DNA testing.

It would be a handy new weapon in the arsenal for detectives, forensic experts and the military, though no one expects it to replace DNA analysis — and its promoters say it is not intended to.

The new method analyzes antibodies. Each person has a unique antibody bar code that can be gleaned from blood, saliva or other bodily fluids. Antibodies are proteins used by the body to fend off viruses or perform routine physiological housekeeping.

“DNA is a physical code that describes you … and in many ways so are your antibodies,” said Dr. Vicki Thompson, a chemical engineer at the Idaho National Laboratory who’s been working with other researchers to perfect the test for the past 10 years.

The scientists say an antibody profile can yield results faster and more cheaply and be performed in the field with minimal training. National lab administrators have licensed the technology exclusively to Identity Sciences LLC in Alpharetta, Ga.

The Georgia startup plans to begin rolling out test kits and training to law enforcement, the military and forensic and medical labs around the globe by fall of 2009. Ken Haas, vice president of marketing, says the test is not intended to supplant DNA testing, the recognized gold standard in human identification.

But Haas says the value of antibody profiling is as a screening tool to help make sense of a crime scene, sort out the blood trails or spatter from multiple victims or more quickly identify body parts on a battlefield or at the scene of a disaster like the Sept. 11, 2001 attacks.

It may also reduce the number of DNA tests required in an investigation, potentially saving time and money and easing the growing backlog, he said. Results from tests on blood serum or dried blood can be ready in two hours, a fraction of the time it takes to run similar tests for DNA matches.

However, a major drawback for now is the lack of a national antibody database. That’s one of the reasons antibody testing is not likely to be used at the outset of an investigation to link suspects to crimes or establish probable cause to justify issuing an arrest warrant.

Company officials say beta testing by forensic scientists at simulated crime scenes at seven locations across the country has produced positive results and reinforced the notion that an eager market awaits. The company declined to say where the testing occurred, citing nondisclosure agreements with participants.

The company has not yet put a price tag on the field kits. But executives say their product will be significantly cheaper than DNA analysis, which can run anywhere from $500 to $3,000 per sample because it requires sophisticated equipment and lab time.

“We don’t see this yet as a product to take to court,” said Gene Venesky, vice president of Identity Sciences. “But we do see this as a way to get the case moving forward toward a final, legal resolution.”

Still, some forensics experts say that kind of scrutiny may be unavoidable, especially if the test takes on a bigger crime-fighting role.

“There is a lot of potential here,” said Lawrence Kobilinsky, a DNA expert and chairman of the Department of Forensic Science at John Jay College of Criminal Justice in New York. “Any time you can develop a quick and easy screen for something … that is a good thing.”

But Kobilinsky and others caution that it takes time for any new forensic test to gain acceptance where it matters most — state and federal courthouses. If the new tests begin appearing in police reports, defense attorneys can be expected to challenge their validity.

“If these tests are going to get to the courtroom, which I think is inevitable, they are not going to be admissible as evidence until they can be proven reliable, accurate” and trustworthy, Kobilinsky said. “My bet is that a crime scene unit is going to be very careful about using this if it’s not going to be of any benefit in litigation.”

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Idaho National Laboratory: http://www.inel.gov/

Identity Sciences: http://identitysciences.net

If mashups sound like the kind of Web 2.0 application best used for checking traffic jams on Google Maps, think again: Mashups within the enterprise environment are becoming common for functions such as integrating social-networking information into CRM tools. And as they get easier to make, they'll continue to grow in popularity and usefulness.

Kapow Technologies, which creates mashup environments for businesses, has taken some steps forward in bringing mature mashups into the corporation. This week it released several mashup products that aim to bring business intelligence to desktops with little human intervention. One new product is Kapow OnDemand.

“It can be used in any instance where what you're trying to do is eliminate the manual process of having people sitting there in front of a monitor finding information they need externally, and then copying and pasting it to get it into the environment they need,” said Ed Julson, director of product marketing for Kapow.

Robot Help

Kapow's mashups work with the help of “robots,” automated tools that collect and integrate selected Web data into a spreadsheet. “If you were a pricing analyst going to a number of different Web sites to collect information on the competition, you'd go to these sites, search for and find what you want, copy that piece of information, and paste it into spreadsheet,” Julson said.

With OnDemand, a robot does that instead. “Instead of a copy-and-paste function, you actually add structure to that data” by embedding the data model into the robot, he explained. “When you bring this information back to the spreadsheet, it has structure; you can put it into a database, and applications understand it. Now you have a way to make connections to anything on the Web.”

All an organization's subscribers have access to that information to make sharing easier. “There's a community aspect involved that aligns with the premise of Web 2.0, which is collaboration and community,” Julson said.

OnDemand is available through a subscription model; plans start at $3,400 per month.

CRM Mashup

Customer-service management tools are also benefiting from mashups. Kapow has partnered with Wavemaker, which provides open-source tools for rapid Web application development, in a “social CRM” experiment called Sales Social that it demonstrated earlier this week at the Web 2.0 Expo in San Francisco.

“Today's CRM application users are tapping half a dozen other Web resources to populate their databases and get their jobs done,” said Stefan Andreasen, founder and CTO of Kapow Technologies. For example, when salespeople review trade-show leads, they may come across a familiar name. If more information about that person is not already in the CRM system, then someone needs to start researching on social-networking sites such as LinkedIn and Technorati to find out more about that person, which provides greater social context about the sales lead.

“Sales Social drastically reduces the need to leave a CRM application to gather the required information,” Andreasen said. “Thanks to rapidly deployed Ajax applications and mashup robots, companies can create powerful social CRM applications in a day or two.”

NEW YORK - Verizon Communications Inc.’s first-quarter earnings rose 9.8 percent as its wireless division attracted more customers than other carriers, the company said Monday.

The country’s second-largest telecommunications company earned $1.64 billion, or 57 cents per share, in the quarter that ended March 31, compared with $1.50 billion, or 51 cents per share, a year ago.

Revenue rose 5.5 percent to $23.8 billion from $22.6 billion.

Excluding items, earnings were 61 cents per share, matching the average expected by analysts polled by Thomson Financial. Analysts had expected revenue of $23.86 billion.

“Verizon has weathered the current economic uncertainty with strong first-quarter results,” said Chairman and Chief Executive Ivan Seidenberg.

Analysts have been looking to the telecommunications companies to hold up well as the economy slows. AT&T Inc., Verizon’s largest rival, bore that out with an earnings report last week that showed little sign of trouble. On a conference call Monday, Verizon Chief Financial Officer Doreen Toben said there was no change in bad customer debt during the quarter.

Shares rose 76 cents, or 2 percent, to $37.80 at the open of trade Monday.

UBS analyst John Hodulik said wireless results where strong, while the landline business was somewhat lower than expected.

Verizon Wireless added 1.5 million subscribers, beating AT&T, which added 1.3 million in the quarter. However, its growth rate was down from 1.7 million in the same quarter last year. Verizon Wireless still trails AT&T in the total number of subscribers, at 67.2 million compared with 71.4 million.

Verizon Wireless started a minor price war for high-end cellular plans in February, introducing a $99.99 monthly plan with unlimited calls and no roaming fees. Other carriers quickly matched or undersold that plan, and stocks took a hit across the industry as investors feared for carrier margins.

But Verizon chief operating officer Denny Strigl said Monday that the plan was boosting results. Before the plan was introduced, 4 percent of new subscribers opted for plans that cost $99 or more. With the new plan, 13 percent were buying the $99 plan, he said.

Verizon Wireless paid $9.36 billion in government spectrum auction that ended in March for airwaves that it plans to use to expand its data services in 2009.

Verizon lost 8.2 percent of its land lines from last year, ending with 40.5 million. Broadband connections were up 14.9 percent to 8.5 million, but total operating revenue in the segment, which includes business services, declined 1.4 percent to $12.3 billion.

Verizon added 263,000 customers to its fiber-optic TV service in the quarter, for a total of 1.2 million. The service is Verizon’s way of tackling the threat from cable companies that are siphoning off voice customers.

Verizon laid off 6,500 people from its landline division last year to counter shrinking operations.

“We expect this trend to continue with ongoing reductions through the year,” CFO Toben said.

At the end of the quarter, Verizon closed on the sale of about 1.6 million telephone lines and 230,000 high-speed Internet customers in Maine, New Hampshire and Vermont to North Carolina-based FairPoint Communications Inc.

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On the Net:

http://www.verizon.com

SAN FRANCISCO - Microsoft Corp. is no closer to buying Yahoo Inc. than when it made its $44.6 billion bid nearly three months ago, leaving the software maker in a quandary over whether the deal is still worth pursuing.

A decision is likely to emerge in the next few days, with Yahoo facing a weekend deadline to accept the offer. Although the deadline expired Saturday, Microsoft has indicated it probably won’t reveal its next move until early this week.

The tense mating dance is at a standstill because Yahoo’s board has repeatedly said it won’t sell to Microsoft for less than $45 billion, even though the bid hoisted its stock shortly after it hit a four-year low in late January.

The impasse has left most analysts predicting Microsoft will either sweeten its offer or attempt to replace Yahoo’s board with a slate of directors who will embrace a takeover.

But the architects of Microsoft’s bid — Chief Executive Steve Ballmer and Chief Financial Officer Chris Liddell — have been signaling the Redmond, Wash.-based company might abandon the bid and leave Sunnyvale-based Yahoo twisting in the wind.

The public remarks of Ballmer and Liddell could be just part of a negotiating ploy aimed at pressuring Yahoo to the negotiating table.

But some analysts think Microsoft would be smart to walk away now.

By turning a cold shoulder, Microsoft could position itself to return with another bid this summer in hopes of completing the acquisition without suffering through the disruption and rancor likely to erupt if Microsoft were to try to oust Yahoo’s board in a risky process known as a proxy contest.

This scenario could only pan out if Microsoft is correct in its belief that Yahoo is stuck in a downward spiral after steadily losing ground in the online advertising market during the past two years.

Unless Yahoo can bounce back, its shares might eventually drop even lower than their $19.18 price when Microsoft made its initial bid of $31.

Yahoo shares fell 50 cents to finish Friday at $26.80, pulled down by the declining value of Microsoft’s cash-and-stock bid.

Driven by Wall Street’s disappointment with the company’s short-term outlook, Microsoft shares dropped $1.97 to $29.83 on Friday. The decline lowered the value of the Yahoo bid to $42.7 billion, or $29.68 per share.

If Yahoo’s stock were to plummet into the mid-teens, Microsoft conceivably could return with another offer that would probably be more warmly received than its original bid.

“Yahoo management would be under inordinate pressure to accept at that point,” said Dinosaur Securities analyst David Garrity. “Why go through all the distractions and expense of a proxy fight if you see another way” to an amicable transaction?

Yahoo management has expressed confidence in a turnaround plan that projects revenue increases of 25 percent in 2009 and 2010. But analyst estimates for those years have remained substantially below those targets — a sign of the widespread skepticism about whether Yahoo will be able to reach its ambitious goals.

Abandoned takeover bids have paved the way to corporate acquisitions before. Just last fall, Oracle Corp. withdrew a $6.7 billion bid for rival business software maker BEA Systems Inc. after being spurned and then wrapped up the takeover for $8.5 billion three months later.

Other analysts remain convinced Microsoft will either raise its bid or launch a proxy contest because it needs Yahoo’s franchise to mount a more serious challenge Google Inc.’s dominance of the Internet’s search and advertising market.

“We still believe (Microsoft) is committed to completing the transaction and is unlikely to walk away,” Citigroup analyst Brent Thill wrote in a Friday note.

McAdams Wright Ragen analyst Sid Parakh said he can’t envision Microsoft raising its offer, especially since Yahoo’s management hasn’t proven its strategy will boost the company’s stock price above $30 on its own.

Microsoft’s current bid is “already a stretch, and I don’t see any reason for them to really bid against themselves,” Parakh said.

Yahoo could try to extract a higher bid by farming out some of the advertising on its Web site to Google. The two sides just completed a two-week trial that allowed Google to show text-based advertising along a small percentage of Yahoo’s search results.

A long-term advertising partnership with Google probably would provide a significant boost to Yahoo’s profits, but antitrust concerns might block an alliance between the owners of the Internet’s two largest search engines. Combined, Google and Yahoo control more than 80 percent of the U.S. search market.

Yahoo also has been exploring a possible merger with the online operations of Time Warner Inc.’s AOL, but most analysts view that as a weaker alternative to a Microsoft takeover.

As it stands now, Yahoo’s first-quarter revenue growth of 9 percent is far behind both Google’s and Microsoft’s online services division, which climbed 42 percent and 40 percent, respectively.

That’s just one reason Garrity believes Ballmer and Liddell are realizing that Microsoft doesn’t need Yahoo at any price.

“Sometimes the best deals are the ones that aren’t done,” he said.

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AP Technology Writer Jessica Mintz in Seattle contributed to this story.

NEW YORK (Reuters) - U.S. newspaper circulation fell 3.6 percent in the latest set of figures released by an industry group on Monday, reflecting a migration of readers to the Internet and publishers' efforts to streamline their businesses.

The figures were released by the Audit Bureau of Circulations and compare the six months ending in March 2008 to the same period a year earlier.

Weekday paid circulation at many of the top 25 U.S. papers fell, though some papers, including Gannett Co Inc's USA Today and News Corp's Wall Street Journal, reported gains of less than 1 percent.

Weekday circulation at The New York Times fell 3.85 percent while Tribune Co's Los Angeles Times reported a drop of 5.13 percent.

The New York Post, which is owned by Rupert Murdoch's News Corp, reported a drop of 3.07 percent while the New York Daily News, owned by tabloid rival Mortimer Zuckerman, posted a 2.09 percent drop. The Daily News reported circulation of 703,137, slightly ahead of the Post at 702,488.

Murdoch and Zuckerman are vying to buy the Newsday newspaper on Long Island from Tribune. That paper reported a 4.68 percent drop in circulation to 379,613 copies.

Sunday circulation fell 4.6 percent overall. The New York Times and the New York Daily News both saw Sunday circulation fall more than 9 percent. At Newhouse Newspapers's The Star-Ledger in Newark, New Jersey, Sunday circulation dropped 12 percent.

The Denver Post and Rocky Mountain News reported a combined drop of 14.79 percent. The Denver Post is owned by privately held MediaNews Group Inc. The Rocky Mountain News is published by EW Scripps Co.

The weekday results include more than 530 papers. The Sunday results include nearly 600 papers.

(Reporting by Robert MacMillan, editing by Mark Porter)

Despite recent efforts to clamp down on electronic payments fraud, the crime is still rife and is undermining citizens' confidence in buying and selling over the internet, the European Commission said Monday.

A Commission report on fraud and countermeasures taken between 2004 and 2007 shows that even though the number of discovered cases is a small minority of the overall number of transactions using new payment services, they undermine the general level of confidence among citizens in the European Union.

In addition, electronic payment fraud is increasingly moving to non-face-to-face situations such as Internet payments, the report said.

“Payment fraud is a moving target and, inevitably, new threats appear, such as identity theft/fraud and, more generally, cyber crime. In 2007, the Commission announced its policy objectives regarding cyber crime and will continue to closely monitor developments in this area,” the Commission said.

Two recent pieces of E.U. legislation have tried to tackle the issue: a payment services directive and a money laundering directive. The money laundering law includes a “know your customer” rule for electronic transactions, but the Commission now believes more work is needed to raise citizens' awareness of the dangers.

“The Commission is working actively to minimize the payment fraud threat, for the benefit of consumers and financial services providers alike,” said Charlie McCreevy, Commissioner for the E.U. internal market.

Action now being planned includes running awareness campaigns targeting the general public in the E.U. These could include running conferences about the dangers of electronic payments, the Commission said.