Main Stories
o Hollywood Video Accepts $850 Million Buyout Offer From Movie Gallery
o WSJ: Two Former America Online Officials Indicted
o Interactive TV Firm Liberate Sells Assets to Comcast, Cox for $82 Million
o Electronic Arts, Arena Football League Partner on Gaming, League Expansion
o Comcast to Make Major Push Into Internet Telephony
o Yamaha Digital Sound Projector Wins "Best of Show" at CES
o Nintendo Announces Slate of Upcoming Video Game Releases
o Report: European Online Advertising to Increase by 30% in 2005

o Briefly Noted: AOL Music on Demand, "Grand Theft Auto" - Sony PSP, Disney Mobile - character voice ringtones, Virgin Electronics, Digital Radio Mondiale - car receiver chip, Music Engineering & Technology Alliance, Thumbworks - Sprint, Blizzard Entertainment - "World of Warcraft," Atari - "TimeShift," Gizmondo - "Tron 2.0," Sorrent - "Baldur's Gate," Commodore 64 - cell phone emulators
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Dothan, Ala. -- Movie Gallery, the nation's third-largest video rental chain, announced on Monday that it has agreed to acquire rival Hollywood Entertainment, the second-largest rental chain behind Blockbuster, in a deal valued at $1.2 billion. The deal would see Alabama-based Movie Gallery pay $13.25 a share for Hollywood, or $850 million, and assume about $350 million in Hollywood's debt. However, news of the deal sent Hollywood shares up as high as $20 on Monday, sparking analysts to speculate that the bidding war may not be over and Blockbuster may sweeten its initial bid of $11.50 per share for Hollywood. While Movie Gallery operates 2,475 stores in mainly rural locations, Hollywood Video has 2,000 video rental stores and over 700 Game Crazy video game stores. Blockbuster operates more than 9,000 video rental stores worldwide.
http://biz.yahoo.com/prnews/050110/nym123_1.html 
http://tinyurl.com/5dv7h
http://biz.yahoo.com/ap/050110/movie_rental_deal_11.html 
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o WSJ: Two Former America Online Officials Indicted

Dulles, Va. -- The Justice Department on Monday was expected to indict a pair of former mid-level executives from America Online for their alleged roles in the Internet company's four-year-old accounting scandal, The Wall Street Journal reported. One of those expected to be indicted on charges of securities fraud was Kent Wakeford, a former vice president of business affairs for AOL. Four former executives from former AOL business partner PurchasePro, a now-defunct software firm, also are expected to face charges. Last month, AOL parent Time Warner agreed to pay $210 million to the Justice Department to settle charges that its AOL unit fraudulently inflated its revenue figures. Through questionable deals, the Justice Department said that AOL was able to report approximately $20 million of additional revenue from PurchasePro in the fourth quarter of 2000 and $15 million more in the first quarter of 2001.
http://online.wsj.com/home/us 
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o Interactive TV Firm Liberate Sells Assets to Comcast, Cox for $82 Million

San Mateo, Calif. -- Liberate Technologies, a developer of interactive TV software and services, announced on Monday that it has sold the majority of its assets to Double C Technologies -- a joint venture between cable TV firms Comcast and Cox -- for $82 million. San Mateo, Calif.-based Liberate had filed for bankruptcy in April 2004, but was denied protections when a judge ruled its cash holdings were far greater than its debts and dismissed the case. Following the completion of the acquisition, Liberate and the cable firms will cross-license technology and intellectual property. While Liberate will maintain its European business, and 130 employees at its Canada facility will be given employment offers, it is unclear if any of Liberate's U.S. staff will be kept on. "Comcast believes strongly in the future of interactive television and the need for customers to have TV on their terms," said Steve Silva, Comcast executive vice president for new business development. "This acquisition, along with our earlier investment in Guideworks and our innovative video on demand platform, will enable Comcast to move faster toward creating a more interactive television experience."
http://biz.yahoo.com/prnews/050110/sfm090_1.html 
http://www.comcast.com 
http://www.cox.com 
http://www.liberate.com 
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o Electronic Arts, Arena Football League Partner on Gaming, League Expansion

New York -- Video game publisher Electronic Arts announced on Monday that it has signed an agreement with the Arena Football League (AFL), which will see the company produce an AFL video game and receive a share in the proceeds of future expansion team sales for the league. Financial details of the deal were not disclosed. Redwood City, Calif.-based Electronic Arts, which also develops the popular "Madden NFL" football game franchise, said it will partner with the AFL over the next four years on media and retail marketing for the league, in addition to developing AFL video games. The first AFL video game is expected to ship in conjunction with the start of the 2006 AFL season. "We believe that the business model the AFL has created will provide for a new football experience for videogame fans, and provide EA with an incentive to partner with the AFL to expand the league," said EA chairman and CEO Larry Probst.
http://biz.yahoo.com/bw/050110/105224_1.html 
http://www.ea.com 
http://www.arenafootball.com 
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o Comcast to Make Major Push Into Internet Telephony

Washington, D.C. -- Comcast, the largest provider of cable TV and Internet services in the D.C. and Baltimore areas, on Monday announced plans to make a major push into the Internet telephone business, with plans to launch its service in 20 markets by the end of the year. "There is going to be a profound change in what a phone is in a home and we're going to be part of that process," Brian Roberts, the CEO of Comcast, told The Wall Street Journal. The company said that it expects to enter 40 markets by mid-2006 and have about 8 million subscribers within five years. Two of Comcast's largest cable competitors, Cox Communications and Time Warner, already offer Internet phone services. Many analysts predict that Comcast's entrance into the market will further diminish the market shares of the Baby Bells, which have traditionally dominated local telephone markets.
http://makeashorterlink.com/?H2145143A 
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o Yamaha Digital Sound Projector Wins "Best of Show" at CES

Las Vegas -- G4techTV this weekend announced the winners of its fifth annual "Best of CES" awards at the Consumer Electronics Show in Las Vegas, with the overall Best of Show title going to a Yamaha device called the Digital Sound Projector that can create surround sound in any room without loudspeakers or cables. The $1,299 Yamaha system resembles a flat-screen television, and can connect directly to a CD or DVD player to control and independently steer up to seven channels of sound to create surround sound in any room. The panel of judges also recognized Creative's $299 Zen Micro Photo as best portable audio player; Samsung's $599 Sports Cam as best portable video player; Sony's PSP as best gaming system; and Sling Media's $249 Slingbox Personal Broadcaster as best home media server. A full list of finalists and winners in twelve device categories are listed at a link below.
http://www.g4techtv.com/bestofces 
http://www.1limited.com/tech/sp 
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o Nintendo Announces Slate of Upcoming Video Game Releases

Redmond, Wash. -- Nintendo of America on Monday announced its upcoming release slate of game titles for the first quarter of 2005, including the launch of a new title in its Zelda franchise. In addition to "The Legend of Zelda: The Minish Cap" for Game Boy Advance, which launched today, Nintendo said that a new Zelda title for its GameCube console is currently in development. In March, the company will also release GameCube versions of Midway's "Mortal Kombat: Deception," Atari's "Dragon Ball Z," Ubisoft's "Tom Clancy Splinter Cell Chaos Theory" and its own bongo drum-controlled title, "Donkey Kong Jungle Beat." Nintendo said it will release "WarioWare: Touched" for its newly launched DS console on Feb. 14, in addition to Electronic Arts' "Need for Speed Underground 2," and new titles in Nintendo's own Pokemon, Metroid, Mario Kart, Animal Crossing and Advance Wars franchises.
http://www.nintendo.com 
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o Report: European Online Advertising to Increase by 30% in 2005

Paris -- According to a new report from JupiterResearch, spending on Internet advertising in Europe is set to rise by almost 30% over the next 12 months. The report estimates that the online advertising market in Europe will be worth more than $3.5 billion by year's end, up from last year's total of $2.75 billion and 2003's total of about $2.1 billion. JupiterResearch also predicted that Internet ads would be more expensive this year, now that businesses have come to accept it as a standard form of advertising. "Recognition amongst marketers of the versatility of the Internet as an advertising medium -- alongside its accountability and the fact it now regularly reaches a mass, mainstream audience -- meant that, in 2004, online finally took its place as a permanent fixture within the marketing mix," said report author Julian Smith.
http://www.jupiterresearch.com/bin/item.pl/home 

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(Dulles, Va.) Eight months after launching the service, America Online said on Monday that its Music On Demand is now the most popular free video-on-demand service on Time Warner Cable. In just over six months, video plays on the service -- originally called My Music Channel -- have increased by nearly 850%, AOL said. In response, the company said that it is expanding the service into the New York and New Jersey market, increasing the total number of markets to 30.
http://makeashorterlink.com/?T2D21243A

(New York) Rockstar Games, the unit of Take-Two Interactive responsible for creating the "Grand Theft Auto" franchise, announced on Monday that it is developing a new iteration of the title for the launch of Sony's new PSP handheld video game system. The company said it will also release a version of its "Midnight Club 3: DUB Edition" title for the PSP. Both titles are being developed by Rockstar Leeds in conjunction with Rockstar San Diego and Rockstar North, respectively.
http://biz.yahoo.com/bw/050110/105132_1.html 
http://www.take2games.com 
http://www.rockstargames.com

(North Hollywood, Calif.) Disney Mobile, a unit of the Walt Disney Internet Group, announced on Monday that it has launched a series of ringtones featuring the voices of Disney and Pixar characters. Mobile operators may now offer downloads of voice ringtones from characters including Mickey and Minnie Mouse, Winnie the Pooh, Buzz Lightyear and Mr. Incredible, for $2.50 each.
http://disney.go.com/disneymobile

(San Jose, Calif.) Virgin Electronics, the new consumer electronics unit of Sir Richard Branson's Virgin Group, on Monday introduced a 256MB version of its silver dollar-sized, wearable MP3 player. The $99 device can store roughly 80 songs, or four hours of music, and comes on the heels of the release of the company's $79, 128MB wearable MP3 player. The devices plug directly into the USB port of a PC or Mac to download songs.
http://www.virginelectronics.com

(Erlangen, Germany) Digital audio developer Fraunhofer, inventor of the MP3 format, announced on Monday that it has developed the first car radio chips designed for use with the international Digital Radio Mondiale standard for digital radio. The Digital Radio Mondiale standard was developed to provide FM-like sound quality at very limited bandwidth, along with multimedia content like traffic and tourist information.
http://www.iis.fraunhofer.de/dab/projects/drm 
http://www.drm.org

(Los Angeles) A group of music producers and engineers have joined to form the Music Engineering & Technology Alliance (META), which will work "to ensure the implementation of optimum standards and practices for the highest-quality music recording and delivery achievable by uniting audio professionals, technology providers and consumer electronics manufacturers in a collaborative effort." The group's members include Grammy award winners George Massenburg and Frank Filipetti; META is headed by former DTS executive Rory Kaplan.
http://www.meta-group.org

(Tustin, Calif.) Mobile entertainment publisher Thumbworks announced on Monday that its CellToons animated streaming video clips have launched for Sprint PCS Vision subscribers. The $4.95 per month service includes animated content produced by developers including Blur Studios, ADV Films, the Vancouver Film School, Bruno Bozzetto and Mike Wellins.
http://www.thumbworks.com

(Irvine, Calif.) Blizzard Entertainment, a unit of Vivendi Universal Games, said on Monday that its "World of Warcraft" massively multiplayer online roleplaying game has sold through over 600,000 units, since launching on Nov. 23. Irvine, Calif.-based Blizzard also said that the game broke the record for simultaneous players during the holiday period, when it registered over 200,000 concurrent online players.
http://www.blizzard.com 
http://www.worldofwarcraft.com

(Los Angeles) Game publisher Atari announced on Monday that it will ship "TimeShift" for Xbox and the PC in the fall of 2005. The game is being developed at New Jersey-based Saber Interactive.
http://biz.yahoo.com/bw/050110/105814_1.html 
http://www.saber3d.com

(London) Gizmondo Europe, developer of a multifunctional handheld video game system, said on Monday that it will develop a version of Buena Vista Games' "Tron 2.0" game for the Gizmondo. Based on the classic Disney sci-fi film, the title will be developed by the company's Gizmondo Studios unit, which was formerly known as Warthog Games before being acquired by Gizmondo's parent company, Tiger Telematics.
http://biz.yahoo.com/prnews/050110/ukm013_1.html
http://buenavistagames.go.com 
http://www.gizmondo.com

(San Mateo, Calif.) Mobile entertainment publisher Sorrent said on Monday it has signed an agreement with Atari to launch a version of the publisher's "Baldur's Gate" title for cell phones. Based on the popular Dungeons & Dragons roleplaying game, Baldur's Gate was originally developed by Hasbro's Wizards of the Coast subsidiary.
http://biz.yahoo.com/bw/050110/105354_1.html 
http://www.sorrent.com

(San Francisco) Wired News on Monday reported on video game emulators that are being created by programmers for use with cell phones, enabling games for old systems like the Amiga and Commodore 64 to play on cell phones and PDAs. Ironically, most modern cell phones are more powerful computers than the Commodore 64 and other systems for which hackers are now creating cell phone emulators. Emulator software that is freely available online enables users to play classic titles like "Pirates," "Escape from Monkey Island" and "Zak McCracken" on their handheld devices.
http://www.wired.com/news/gizmos/0,1452,66205,00.html 
 
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