It was always too big an opportunity to pass up, and now it's finally happening: Apple will sell ads on iTunes, Ad Age reports. This doesn't necessarily mean the floodgates have opened, however--there are no plans to sell ads on the iPod, for example--but Apple has told content partners it will sell billboards on iTunes. It's unclear from the report, but it would seem Apple intends to begin testing by offering up the tiny billboard space that appears on the lower-left corner of the iTunes library as users listen to podcasts, but the placement of video ads marks a step …

It might not necessarily be advertising-related (yet), but it's certainly interesting: students at Carnegie Mellon University are hoping their video game based on the Middle East conflict will help players find a diplomatic solution to a decades-old problem. The object of "Peace Maker," their game, is to react as a suicide bomber blows up a bus in an Israeli city, deciding whether to counter with a missile strike or an assassination plot. Wow, talk about a role-playing game. But who would anyone want to play something like this? The Associated Press calls them "serious games," an emerging genre of interactive …

Google and Yahoo set the tone for what investors hope will be a strong first quarter for Internet media stocks. Both companies delivered what Wall Street ordered, with Google far surpassing expectations. Denise Garcia, an analyst with the firm WR Hambrecht+ Co., said Google in particular will continue to capture the majority of growth in Internet search, but other analysts think the search pie is big enough for several major players to see continued growth. Even so, it must be underlined that Google did massive numbers: its revenues grew 79 percent, 2-3 times faster than the estimated 30 percent increase …

St. Cloud, an Orlando Fla. suburb, is one of the country's first free citywide Wi-Fi network experiments, and it's experiencing some growing pains. Dead spots, weak signals and poor maintenance are keeping some of its residents tied to other ISPs. St. Cloud's municipal government is spending more than $2 million on a network that will reportedly cost $400,000 a year to maintain. So far, the Associated Press reports that there have been plenty of calls from frustrated users--many of whom can see receivers from their homes but still can't sign on. Hewlett-Packard, the city's partner on the Wi-Fi project said …

According to new research from Yahoo and Isobar, a consortium of interactive agencies, computers and the Web enable people to become more involved in various aspects of their lives by empowering them to invent their own purpose. The research, called "Fluid Lives," showed that 26 percent of people in the study became more involved politically when they had an Internet connection, 29 percent became more involved with their communities, and 55 percent became more involved with organizations related to their interests. By this logic, says columnist Gary Stein, the computer and the Internet become powerful self-actualization tools that empower people …

Are five-second video ads the future of Internet advertising? Metacafe, a new competitor to YouTube, Google Video, Heavy.com and the like, seems to think so--or seem to think the new format is something that should become standard on short-form video sites. "Why not five-second video ads?" said the company's CEO. "I would gladly put those in front of videos. But I will never put 30-second ads in front of videos. It's too much. It ruins the experience for viewers." Metacafe only started selling ads a few months ago, and marketer interest in ramping up; so far it is only selling …

GoDaddy.com, a manager of Internet real estate, is perhaps most famous for a pair of racy Super Bowl spots; aside from that, the average consumer--not to mention the average investor--probably has no idea what the company does. Now that GoDaddy has reportedly hired Lehman Brothers to conduct an IPO, it's become the company's business to give everyone a better idea about Internet real estate. GoDaddy is essentially a middleman between individuals who want an Internet address and VeriSign, the company in charge of maintaining over 13 million Internet addresses, or 20 percent of the registered domain names on the Web. …

The New York Times has delivered a fine piece of reporting about Google's operation in China and the nature of Chinese censorship of the Web. The lengthy article is scheduled to appear in the Times Magazine on Sunday, but is also available now on the site. The story covers everything from the history of Google's involvement there, its reasons for opening business within China's borders, to China's mysteriously effective hands-off approach to censoring the Web, citizens' reaction to that censorship, as well as the operations of other U.S. Internet firms in China. It also discusses how exactly the so-called "Great …

Software and technology companies used to convene to talk about the threat posed to their business by Microsoft. Of course nowadays, that company is Google, and the scope seems to have expanded to any company with an interest in making money on the Web. The Wall Street Journal has learned that eBay, threatened perhaps by the classifieds advertising service Google Base, is now actively seeking a partner to help it compete more efficiently with the growing threat of Google. The online auctioneer is reportedly in talks with both Yahoo and Microsoft. Unnamed sources close to the matter say eBay seeks …

The development of the virtual life engines many call massively multiplayer online games is such that businesses and business executives are forced to take notice. Business Week offers an inside look into the bizarre world of virtual commerce--and trust me, it's seriously bizarre. The reporter delves into the virtual worlds of today's most popular MMO, Linden Lab's Second Life, a free, Internet-based downloadable software application that lets users create and control an avatar that lives in a dynamically shifting and growing virtual world where the activities are created and controlled by other users. Second Life is different from other MMOs …