AOL is set to report second-quarter earnings on Aug. 2--and analysts expect comparable declines to its 800,000 first-quarter subscriber exodus. That underscores the gradual, inevitable decline of AOL's Internet service business. The company is in a quandary about what to do moving forward: Dial-up continues to die, but slowly enough that AOL still makes most of its money from the fading service. However, the same day that Time Warner is expected to announce more subscriber churn, it is also expected to announce changes that will hasten the end of its paid subscriber revenue source. This move follows a proposal to …

One dubious buzz marketing tactic is for social networks to develop a faux user profile--someone who repeatedly plugs a brand. That tactic, once discovered, is usually met with firm resistance from legitimate members. And it's been largely frowned upon by organizations like the Word of Mouth Marketing Organization (WOMMA), which set guidelines for so-called "buzz marketing." These poor attempts to dupe younger demos usually end badly for marketers--which is probably why MySpace, the runaway leader in social networking with 100 million users, will only make $180 million this year. Yet buzz marketing on social networks still represents a big opportunity …

One-third of Americans are using the Internet to get their news this year, compared to one in 50 in 1996. But that number is about the same as it was two years ago--indicating that online news audience growth may have hit a wall, says a new Pew Research Center study. Among younger users 18-24 who get their news online at least three days a week, the growth rate in online consumption was just 1 percent between 2002 and 2006. However, readers ages 35 to 49 increased their consumption by 12 percent during the same period. That suggests a couple of …

Microsoft is "lost in transition," according to a new report from Credit Suisse. While fourth-quarter sales were above estimates on strong PC unit shipments and software sales, the company is in the middle of the long-haul process. It's moving away from its sales-centric business toward an ad-supported, service-based one. Although it could take "years," Credit Suisse believes Microsoft's margins won't suffer during the transition. But they aren't expected to grow at all, either. To aid the transition, the software giant has been in the midst of a massive repurchasing program of 800 million shares, worth $20 billion, which is expected …

CNN now allows users to send in video and audio reports of breaking news occurring in their region. Users with camcorders or recording audio devices can email or upload their "I-Reports" directly to CNN. All user submissions will appear in a separate Web site, called the CNN Exchange. The idea is YouTube-like, but with more direction. It calls for firsthand reports of news events as they happen anywhere in the world. User video reports have always been important to news organizations: the fall of the World Trade Center, the infamous beatings of Rodney King, and videos of the race-related riots …

It's the 2006 version of how to make friends and influence people. Christine Dolce, a Southern California cosmetician, has become a sensation on MySpace. She has over 900,000 friends who link to her MySpace page, which has become a second source of revenue for her. Dolce, who goes by the name ForBiddeN, looks like your quintessential bleached blonde dominatrix. She's sexy, smart, and ruthless--and loaded with marketing savvy. She makes and sells her own jeans, which she promotes on the site, and has secured a few ad dollars. Unilever, the consumer-goods giant, hooked up with Dolce to promote Axe, the …

Call it clip culture. The online video craze that's taking the Web by storm has trickled into the mainstream, causing advertisers to panic. Why? They're not involved. YouTube, for example, is attracting 20 million visitors per month, who spend an average of two and a half minutes viewing each video. That's bad news for YouTube, however, because it hasn't yet devised a way to make a living from its massive usage. If the viral video site (and its 240 followers) could attract ad dollars, online video would be the business to be involved in right now. But where and when …

Microsoft defended its second-quarter earnings yesterday by saying its investment in Internet services would help the company grow--but not for a few years. Its plans include integrating Internet search into the Windows operating system, its Office software, XBox games, and cell phones powered by Microsoft. "Search will not be a destination, but it will become a utility woven into the fabric of all kinds of computing experiences," says Kevin Johnson, co-president of Microsoft's platforms and services division. Search is a big piece of a broader effort by Microsoft to secure more online ad dollars. Analysts predict that the $12 billion …

Kazaa is earning the right to reinvent itself. But it will cost them--more than $115 million in penalties to music and movie companies. On Thursday, parent Sharman Networks announced its intention to "go straight" by redesigning its file-sharing program to block customers who download copyrighted music and movies. That's obviously a big departure from where the company was a few years ago, enabling consumers to share whatever files they pleased over its network. Kazaa will now license entertainment for a price--ending one of the longest, most highly profiled Internet copyright disputes of the modern era. Sharman has agreed to "use …

Less than 1 percent of systems that send email can be called good Netizens, according to ReturnPath, a company that compiles email reputation data. Return Path monitors 20 million IP addresses that send email, and finds that the majority of messages come from compromised hosts sending spam. A new technique, called reputation-based filtering, can keep spam out of in-boxes. Senders are graded on their practices, and are assigned a reputation score based on complaint rates, volume of mail sent, and senders' responses. Of the 20 million IP addresses they track, just 0.9 percent earned a reputation score that would allow …