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NEW YORK (Reuters) - Overstock.com said on Friday it filed a lawsuit to challenge a New York law requiring Internet retailers to collect and pay New York state taxes on sales to New York consumers even if the retailer does not have a physical presence in New York.

The online retailer said it named the New York State Department of Taxation and Finance, tax commissioner Robert Menga and Gov. David Paterson as defendants in the complaint filed with the New York Supreme Court.

Overstock.com, which follows Amazon.com Inc in challenging the law, said it is asking the court for an injunction and to declare the law unconstitutional.

The company, which is based in Utah, said that on May 15 it told more than 3,400 New York-based affiliate advertisers that as of June 1 they could not provide advertising for Overstock.com because of the new law, which comes into effect at that time.

The law would require it to collect up to 8.75 percent sales tax on all its sales to New York customers, it said.

(Reporting by Sinead Carew; editing by Carol Bishopric)

NASHVILLE (Billboard) - The secret's out: MySpace Music Secret Shows are a hit. Social networking pioneer MySpace has created its most successful music program with the intimate Secret Shows series, whose 150th installment will feature Gnarls Barkley on June 8 at Irving Plaza in New York.

MySpace Music launched the Secret Shows franchise in January 2006 and has since hosted such acts as Rilo Kiley, Moby, Maroon 5, the Killers, the Yeah Yeah Yeahs, Tenacious D, Lily Allen, Ice Cube, James Blunt and Neil Diamond in cities around the world.

The concept is the brainchild of MySpace Music editor Isac Walter, who wanted to attract fans to a MySpace profile where they could find out about promotional shows, with an urgent call to action.

“We have such a large social network we can pull from that we literally can go into any city and announce a show 48 hours in advance and fill an entire venue,” Walter says. Admission to the shows is free.

If fans sign up as a “friend” of the Secret Show profile, “you'll get a bulletin that says, 'Tomorrow night, the Kooks in Portland (Oregon) at Backspace, first come, first served,”' Walter says. “If you really want to see the show, you can go down and get in line.”

Secret Shows is MySpace's most successful and longstanding music program to date, and the program with the most user interaction, Walter says. “Almost half a million kids have signed up for the Secret Shows profile, and those kids are keeping the profile active, going in and requesting bands to play.”

To enlist a band for a Secret Show, Walter will typically approach a label when a particular act is already on tour or has a timely album release.

“Preferably we'll do it with a band that is already playing a much larger venue (in the market), perhaps 1,000 or 2,000 capacity, and then try and get them to do a really small, intimate show where core fans will be able to come out and enjoy it,” he says. “Kids will go and wait in line for hours on end, and the reward basically is the longer you're willing to wait, the more chance you have of getting in to see one of your favorite bands perform.”

Bands play gratis in exchange for promotion on MySpace Music, and any costs are absorbed by the label as a marketing and promotion expense. “Clubs are really happy to get involved because obviously they get the bar (revenue), but they also get to say, 'Slayer played at my club,”' Walter adds.

MySpace has staged Secret Shows in 30 states and has launched the program in several other countries, including Australia, Germany, England, France, Spain, Italy, Canada and Japan.

The shows are not typically webcast on MySpace because of technological challenges. “If (the technology) does become available so that we can just set up a box and webcast the show for everybody to watch, I think it's pretty likely that we will, and I don't think the technology is too far off,” Walter says.

Reuters/Billboard

DENVER (Billboard) - Legal pressure is mounting against U.S. wireless operators over their role in facilitating either false or misleading charges for mobile content — primarily ringtones.

The resulting fallout threatens to stunt an area of potential growth for declining ringtone sales: so-called “off-deck” service providers.

The most recent development targets T-Mobile. The operator is being sued in California for adding charges relating to subscription mobile content services Ringazza and Flycell to the bills of customers who claim they never authorized the charges.

Both services are what the mobile industry calls off-deck providers — companies that market to wireless customers outside the wireless operators' content menu. They advertise their content in magazines and on certain cable TV networks, which customers can buy via text messaging or mobile Web sites. The cost of the content is then added to the customer's phone bill via a billing arrangement with the operator.

The problem is that customers don't always realize what they're buying. Most off-deck content providers operate subscription services whereby members can download a set number of ringtones, wallpapers and games for a monthly fee, typically $10. They attract new customers by advertising free or deeply discounted ringtones. Many of those customers don't notice the subsequent extra recurring fee.

Such confusing marketing and billing practices are not new and have spawned numerous lawsuits against the individual providers engaging in such practices, mostly in Europe. A class-action lawsuit is under way in Florida against such a provider, the U.S. arm of Italian content provider Buongiorno.

But recent developments put wireless operators in the crosshairs for their involvement in collecting the disputed charges, even though they play no role in marketing or distributing the content in question.

DAMPENING SALES

“I would call the situation borderline chronic,” MultiMedia Intelligence analyst Frank Dixon says. “The whole problem has just been rampant.”

While there isn't any hard data proving that these lawsuits and the problems that initiate them have any direct effect on mobile content sales, Dixon says they're almost certainly contributing to the stalling of the mobile entertainment market.

“We're not seeing the adoption of mobile content like everyone would have liked, so obviously we can say there's some impact on the consumers,” he says. “The secondary impact is that operators are getting more careful about how they get to market. They're putting up roadblocks for questionable practices, and they're making a concerted effort to push content through their own on-deck offerings.”

Ultimately, that threatens the expansion of off-deck business — the one area where mobile content sales are up. Total U.S. off-deck sales are expected to rival on-deck sales by the end of this year, according to research from Informa Telecoms & Media. For 2010, Informa projects off-deck sales will reach $5 billion versus $2.1 billion for on-deck sales.

This tightening of rules comes as labels are entering the off-deck market. Island Def Jam teamed with Flycell on IDJ Mobile, a monthly subscription service that lets fans download not only IDJ content but content from any label that Flycell has partnerships with — to date limited to all Universal Music Group companies.

Reuters/Billboard

It's a different game for Quark these days. Once, its flagship QuarkXPress was far and away the leading software for professional print publishing; but its market share has eroded in recent years, faced with tough competition from upstart rival Adobe InDesign.

Quark isn't taking the challenge lying down. On Thursday it announced QuarkXPress 8, a new version that adds intriguing new features to the venerable publishing platform. The question that remains is whether this new release will be enough to push Quark back into the limelight, or whether past mistakes have cost it the crown for good.

Among the new features for QuarkXPress 8 are Bézier pen tools for quick drawing directly onto a page, better interoperability with image-editing software (including Adobe's), improved typographic controls, WYSIWYG font rendering, and a redesigned user interface.

What's more, Quark has redoubled its focus on the Web– arguably the hottest segment of today's publishing industry– with a number of new tools. In addition to supporting export to HTML and PDF, QuarkXPress 8 now offers native Flash authoring, right from within the program. Designers can publish simultaneously to print, PDF, and the Web, including Flash movies.

But let's face it: A slim feature set was never Quark's problem. Longtime QuarkXPress users who jumped ship to InDesign will remember how long it took Quark to release a version for Mac OS X, not to mention playing catch-up with Adobe. (Even some of the new features in QuarkXPress 8 have been available in some form since early versions of InDesign.) And other long-suffering print designers I've met have expressed an almost pathological hatred of Quark over some of its past business practices, such as charging for tech support.

If you're a print publishing professional yourself, are you willing to let bygones be bygones? Is Quark still your tool of choice, and is this latest version a welcome upgrade? Or are you moving ahead with InDesign, even if that means submitting to an Adobe monoculture in the graphic design software market? Sound of in the PC World Community Forums.

NEW YORK - Apple Inc.’s iPhone, a new model of which is widely expected this summer, took 19.2 percent of the U.S. market for “smart” phones in the first quarter of 2008, according to research firm IDC’s vendor survey.

That was down from 26.7 percent of smart phones sold in the fourth quarter of last year, which included the holiday shopping season, IDC found.

Much of the slack was picked up by Research In Motion Ltd.’s BlackBerry, which took 35.1 percent of the market in the fourth quarter and then 44.5 percent in the first.

IDC analyst Ramon Llamas said the BlackBerry is now strong in the “prosumer” segment, as RIM has successfully widened the appeal of the device beyond the professionals who have been its core customer group.

Smart phones are designed for Web surfing and e-mail in addition to voice calls and usually have alphabetic keyboards or touch screens. They account for a growing share of cell phones sold, as prices descend and carriers complete their fast data networks.

IDC did not reveal the total number of smart phones sold in the quarter. Apple said it sold 1.7 million iPhones in the first quarter, including overseas sales.

Palm Inc., a pioneer in the category along with RIM, also picked up market share in the first quarter, when it grabbed 13.4 percent of smart phone sales, up from 7.9 percent in the fourth quarter, IDC said. “Palm also did really well. It posted a sequential gain mainly on the strength of the Centro phone,” Llamas said. The Centro, a smaller phone than Palm’s Treo models, came out last fall for the Sprint Nextel Corp. network and was launched by AT&T Inc. in February.

But Palm’s market share is down from 23 percent in the first quarter a year ago, apparently the victim of the iPhone, which went on sale late last June. RIM’s market share is also down from last year, when it sold 48.7 percent of U.S. smart phones in the first quarter.

No. 4 in market share in the most recent quarter was Samsung Electronics, with 8.6 percent, up from 5.1 percent in the fourth quarter, a rise Llamas credited to the availability of the BlackJack on Verizon Wireless.

Motorola Corp., which is struggling in the overall cell-phone market, did poorly in smart phones as well, dropping from a 7.5 percent share in the fourth quarter to 2.6 percent in the first.

___

On the Net:

http://www.blackberry.com

http://www.apple.com/iphone

http://www.palm.com

http://www.idc.com

LOS ANGELES - Amazon.com said Friday that publisher Simon & Schuster Inc. will make 5,000 more books available for the Amazon Kindle wireless reader, bumping to 125,000 the number of titles users can download and read.

The announcement came ahead of an address by Amazon.com Inc. Chief Executive Jeff Bezos at the BookExpo America convention in Los Angeles.

Bezos has said Kindle e-books now account for 6 percent of sales among the 125,000 titles available on the site in both electronic and print formats. The company did elaborate on that figure.

The online retailer cut the Kindle’s price by $40 to $359 on Tuesday but still won’t say how many have sold. The company also refuses to divulge the number of e-books it has sold.

Kindle launched last November and sold out in hours. Amazon sorted out its supply chain and manufacturing problems, and the device was back on sale in April.

Despite the price cut, the Kindle still costs more than Sony Corp.’s competing Reader, which retails for $299.

WASHINGTON - Federal antitrust regulators have cleared activist billionaire investor Carl Icahn’s purchase of another $1.5 billion of shares of Internet company Yahoo Inc.

Icahn launched a proxy fight last month to remove Yahoo’s board of directors after the Sunnyvale, Calif.-based company rejected Microsoft Corp.’s last takeover bid of $47.5 billion bid. He has called Yahoo’s actions “irrational” and nominated an alternate slate of 10 directors, including himself.

To gain leverage in the fight, Icahn has spent more than $1 billion to buy 59 million Yahoo shares and options to give him a 4.3 percent stake in the company. He has sought approval from the Federal Trade Commission to acquire up to $2.5 billion in Yahoo stock, including his current holdings.

The FTC included the deal on a list of transactions released Friday that received an “early termination” of their antitrust reviews. Early termination refers to the completion of a review by the FTC or Justice Department before the end of a 30-day period required under antitrust law

While Icahn has made it clear he wants Yahoo sold to Microsoft, there are no guarantees the Redmond, Wash.-based software maker is still interested in buying Yahoo.

Shares of Yahoo fell 31 cents to close Friday at $26.76.

PARIS (AFP) - Two Internet sites were banned Friday by a French court from taking online bets in France on matches at the ongoing Roland-Garros tennis championship in Paris.

Unibet and Expekt, both based in Malta, were also ordered to pay 800,000 euros (1.24 million dollars) in damages and interest to the French tennis federation, which owns the rights to the much-watched sporting classic.

Both firms intend to appeal the ruling, they said in a statement issued by the European Gaming and Betting Association.

In two distinct rulings, the court ruled that both sites “violated the operating monopoly conferred on the French tennis federation, the organisers of the tournament.”

It ordered Expekt to pay 300,000 euros in damages and interest, and Unibet 500,000 euros.

Welcoming the decision, French tennis federation lawyer Fabienne Fajgenbaum said “this is the first decision that is so clear on the exclusive rights of exploitation” of the Roland-Garros event.

The case hinged on a French law that prohibits betting on sporting events which are not organized by the French national lottery operator, Francaise des Jeux.

The French tennis federation launched a similar action in the Belgian city of Liege, which was dismissed in April.

The EGBA said Friday's judgement in Paris merely demonstrated “the contradictions between different European courts.”

“We regret that a French judge has prevented French Internet users from placing bets on their favourite tennis tournament, whilst Belgians can continue to enjoy this form of increasingly popular entertainment,” it said.

The EGBA went on to note that Francaise des Jeux is currently in the sights of the European Commission over the legal status of its monopoly.

Having successfully completed the much-publicized 700-MHz wireless spectrum auction, the Federal Communications Commission is now planning its next auctions.

According to a story in Thursday's Wall Street Journal, one of those plans includes a free wireless Internet. The winner of the auction for those frequencies would make broadband wireless Internet available to most of the U.S. Although details of the plan have not been worked out, there are reports that the FCC plan would mandate that the frequencies could not transmit everything the wildly diverse Internet could offer, such as pornography.

The D Block

Another plan for a new auction would be directed at getting a winning bid for the D Block. That group of frequencies was not sold at the last auction, as the minimum bid of $1.3 billion was not reached. Under FCC rules, the buyer would need to allow part of the spectrum to be used by public-safety agencies.

As a run-up to the D-Block reauction, the FCC has been taking comments from industry, public safety, and academics on how the rules for the D Block might be revised to attract higher bids. According to news reports, many public-safety groups, such as the Association of Public-Safety Communications Officials-International and the National Emergency Number Association, as well as some members of Congress are suggesting that the FCC keep the same public-private partnership as previously required.

This requirement seeks to guarantee that broadband communications between government agencies have national coverage and interoperability by requiring the commercial operator to make the frequencies available in the event of emergencies.

'Doesn't Seem Realistic'

Some observers are suggesting that the D-Block price was too high, while others are suggesting that the private-public partnership requirements were not clearly defined. Bill Ho, an analyst with industry research firm Current Analysis, said the basic issue needs to be addressed — that bidders “didn't see something that was entirely attractive.”

The proposition, he said, was that the winning bidder gets the spectrum, uses a great deal of money to build and support the network, and then has to give up its use at times to public agencies. This less-than-compelling business proposition, he noted, was the reason the D Block only attracted one bidder, Qualcomm.

To be attractive to commercial bidders, Ho said, the FCC has to figure out some better incentives in exchange for sharing with public agencies.

He also did not think the idea of auctioning off frequencies that offer free Internet is a very compelling business opportunity. He said it was “interesting, but it doesn't seem realistic,” similar to municipality-owned Wi-Fi.

“You get the frequencies, build it out, and then give it away for free,” he said, adding that a comparison to television, which does the same thing, is not equivalent. Running an Internet network, he pointed out, involves a greater level of expense and a greater challenge for advertisers than sending TV shows over the air.

Griffin Technology has announced the availability of the PowerDock 2, a device that simultaneously charges an iPhone and an iPod. It costs $49.99.

The PowerDock can charge any two dock connector equipped devices, so if you want to charge two iPhones or two iPods, that will work as well. It features a brushed aluminum design and includes six universal dock adapters to fit different iPod devices.

The PowerDock 2 is compatible with the iPhone, iPod touch, iPod classic, second and third-generation iPod nano, fifth-generation iPod, fourth-generation iPod and iPod mini.