MySpace has grown its audience by 609 percent in the last year to nearly 25 million users, according to eMarketer, which is the major reason why marketers are so eager to do business with the social networking site. The newly owned unit of News Corp. attracts younger users through tie-ins with music and other forms of entertainment. MySpace users are 139 percent more likely to be under 17 than the general Internet population, while Facebook, a networking site catering to college students, has a 283 percent greater incidence of 18- to 24-year-olds than general Internet users.

Following months of negotiations, it looks as though Time Warner won't be selling a stake in its America Online unit after all. Instead, the media conglomerate looks set to either enhance its revenue partnership with Google, or establish a new one with Microsoft at the expense of the search giant. Speaking to one executive involved in the talks, The New York Times reports that Google's terms do not involve any kind of investment in AOL. Rather, Google would extend the 80 percent cut it currently gives AOL for the revenue generated by its search technology on AOL's pages, while …

While The New York Times says the America Online talks are still very much up in the air, sources tell the Wall Street Journal that AOL parent Time Warner is close to securing a partnership with Microsoft Corp. The agreement would include a joint venture in advertising services, including Internet search and online ad sales across AOL.com and Microsoft's MSN. The system it would use for the latter is presumably MSN's AdCenter, currently undergoing beta testing overseas. The joint venture would end AOL's long-standing partnership with Google, which provides the Time Warner unit with search technology and advertising services. …

AOL could be in legal trouble again, according to the Associated Press. A lawsuit filed in the St.Clair County Circuit Court in Illinois by 10 AOL customers in six states accuses the Time Warner unit of illegally creating secondary accounts for them without consent and then billing them illegally. The lawsuit could potentially cover hundreds of thousands of AOL subscribers. The lawsuit claims that not only did AOL confuse and deceive these customers, but it also refused to give refunds to those who questioned the unwarranted fees. The suit is akin to more than a dozen other pending lawsuits filed …

Business Week has a very interesting--and comprehensive--article covering what it calls the MySpace generation, which moves seamlessly between online and real-world interactions, largely ignoring the difference. For them, the Internet is a virtual community center, while older generations still regard it as more of a utility. Not only are big media firms like Rupert Murdoch's News Corp. responding to this shift in usage, but so are marketers. The article profiles the marketing dollars companies like Coca-Cola are spending with a variety of social networking sites, from MySpace to BuzzOven to Facebook, as well as the young entrepreneurs responsible for the …

Kanoodle is offering publishers money in exchange for letting the company distribute its targeting cookies throughout its ad network. The move aims to increase the relevance of Kanoodle's behaviorally targeted ads by culling user data collected outside of the Kanoodle network and adding it to the information contained in its network. Kanoodle already assigns users behavioral data when they visit certain pages in its network; that data is then added to the contextual data on the page they're visiting. The new program, which the company calls BrightAds, adds a third element, effectively allowing advertisers to reach more finely targeted, but …

While major search companies are improving their local search technology, a pair of smaller players are offering new services that stand out, according to SearchEngineWatch. Metrobot, a local search engine specializing in maps, has recently expanded its search coverage nationwide, offering local results presented on an individual street level, as opposed to the large-scale maps used by other search engines. Metrobot says these other services are more geared for cars than pedestrians. The maps include business listings and links for each displayed road segment. As users "walk" down the road, they can view these listings. Another service, called TrueLocal, aims …

Verizon Communications is considering a possible sale of its directory business, according to The New York Times, which said the division could sell for as much as $17 billion. The company is considering a sale or spinoff in order to concentrate more on its wireless, phone and data services. The unit it would offload, Verizon Information Services, publishes 1,750 directories in 44 states as well as SuperPages.com, one of the largest online yellow pages directories on the Web, generating $3.6 billion in revenue last year. Verizon is the country's second largest telecommunications provider after AT&T. Directory businesses are typically more …

Real Networks is creating an online version of its Rhapsody digital music service, enabling people who haven't downloaded the software to test the service. Whereas Apple's industry-leading iTunes is a music store, Rhapsody is a subscription service, which lets consumers stream an unlimited number of songs on their computers for a flat monthly fee. Because Rhapsody has thus far been software-based, consumers haven't been able to try it as easily as they could a Web-based service, which requires no download. The move immediately opens up the service to a broader audience, and should result in more subscriptions for Real Networks. …

In what is likely to be a boon for video game advertising, a new study from Nielsen Entertainment says that gamers actually like product placements in video games because such ads make the games seem more real. This will surely come as a relief to game publishers weary of upsetting gamers, who have long been known to be sensitive to anything that could detract from the game experience. The study, which was funded by video game publisher Activision, also found high recall rates for video game ads among the 1,350 male respondents between the ages of 13 and 44; it …