ESPN is taking a completely different approach to Web video. Some companies charge consumers for Web video access. Others offer it for free while looking for a way to sell ads. ESPN has decided to charge Internet service providers for the right to carry its broadband Web service ESPN 360. This decision is the total reverse of the Net neutrality debate--a content provider charging its service provider for the right to take up more bandwidth than before. What, exactly, is in it for service providers? As expected, ESPN 360 is standard ESPN fare: Full-length live sports programming, interviews, highlights, games--more …

As expected, the sea change at AOL is coming. It's avoiding the dial-up ISP business, giving away core services like email and software for free. The strategy will accelerate the decline of its core business, which now represents 80 percent of its revenue, costing the company about $2 billion. What changes should we expect? AOL members who use other service providers have no reason to keep paying the company. Hundreds--if not thousands--of customer service reps, marketers and ISP-related AOL staff will likely be laid off. And those ubiquitous "Try AOL, 1,000 hours Free!" discs you never asked for but somehow …

Earlier this week, ahead of its second-quarter earnings, Time Warner unit AOL unveiled plans to develop a new Web video portal. It enables users to search for clips on a variety of topics, upload their own video, and watch videos on demand from content providers like Warner Bros., another Time Warner company. Ovum says such a move couldn't have come a moment too soon for the ailing Time Warner Web portal. It's no secret that the company has badly needed to reinvent itself. For too many years, AOL has been a "me-too Internet access provider," desperate to innovate. With this …

The Interactive Advertising Bureau is lining up with the big search engines--Google, Yahoo, Microsoft--as well as the little guys--InterActive Corp.'s Ask.com and LookSmart--to find a better way to fight click fraud. The group will conduct research and devise guidelines for advertisers and marketers. IAB Chief Greg Stuart says new guidelines could be available within the year. For major search engines like Google and Yahoo, click fraud has been the biggest newsmaker of the year. The fact that Big Search is banding together to try and solve the problem underscores how important it is. These are fierce competitors, which understand that …

2006 is the year of Web video--but that doesn't mean the whole world is making money on it. It means the whole world is still trying to see if they can corner a share of the high-traffic market. As MarketWatch's Bambi Francisco says: "Until there is a better sense of what works, advertisements tied to video will remain a small portion of the total online ad pie." Just 2 percent of online advertising was attributed to online video ads last year, according to eMarketer. This year, the research firm doesn't expect spending to rise past 2.3 percent, or $385 million. …

Forget about plastic discs and DVDs. The future of gaming belongs to the Internet and downloadable games, says Wired magazine. Console disc sales dropped by more than $700 million from 2004 to 2005, according to NPD Group. But Jupiter Research says digital downloads on game consoles earned $143 million in 2005 and should grow to $2 billion by 2011. At a recent conference, Microsoft's corporate vice president of interactive entertainment, Peter Moore, described the future of gaming: "Years from now, the concept of driving to the store to buy a plastic disc with data on it and driving back and …

Given the stagnant growth--and in some cases, sales declines--in the video-game industry, publishers and trade organizations have agreed to scale back the reckless spending surrounding the industry's big event, the Electronic Entertainment Expo, held in Los Angeles every spring. Business Week applauds the move. The expo--a time for game developers, publishers, distributors, and marketers to meet--had devolved into an orgy for game enthusiasts. Last year's show attracted a whopping 60,000 people; the Entertainment Software Association points out that the event had become so big it was not effective in helping exhibitors to reach their intended audience. Next year's E3 will …

The furor in the marketing community surrounding click fraud highlights one of the great myths of the first decade of online activity, writes Richard Waters in the Financial Times. Namely, that the click is the ultimate measure of intent on the Internet. To click is to cast a vote, express your desire to buy, or mark a prelude to greater action. We now know there are more efficient ways to capture user intent. Waters says that means "the next wave of successful Web companies will be the ones that capture those new techniques first--and there is no guarantee that it …

It enjoys a massive lead over all pretenders to the search throne, yet Google finds itself "getting trounced" by upstarts in nearly everything else: blogging, video sharing, and social networking, reports MarketWatch. For the time being, Google can continue to grow both search usage and its overwhelming share of the market. This suits the company just fine--but downward pressure from management, Wall Street analysts, and shareholders requires that eventually, one of its myriad forays into media-building pops. As the market for video sharing settles around YouTube and MySpace, that looks increasingly unlikely. It also looks inconceivable that another pretender could …

Russell Shaw of ZDNet pegs YouTube's market value at around $1 billion. Will the company stay private, go public, become acquired, or acquire another company? Shaw seems reasonably certain that YouTube will be scooped up by one of six Internet media majors. In order of their suitability from least to most suitable: First, Adobe systems. The biggest stretch on his list makes sense. YouTube uses its Flash format for most of its videos. This would be a huge promotional platform for Flash, which lacks the distribution of other major video formats. Time Warner-AOL is next. AOL would be a great …