Senior Bush administration officials called on Congress to permanently exempt the Internet from access taxes or taxes on electronic commerce. The Senate Commerce Committee is expected to approve a bill that would extend the tax-free status of the Internet until 2011. Under current law, this status will expire at the end of 2007. However, Treasury Secretary Henry Paulson and Commerce Secretary Carlos Gutierrez says that a permanent moratorium on Internet taxes would be better for business. They said in a statement: "Preventing the taxation of Internet access will help sustain an environment for innovation, ensure that consumers …

Microsoft is taking solid aim at a business outside its core competence: advertising. And it is deliberately facing off against a specialist: Google. Chief combatant Brian McAndrews joined Microsoft last month and knows the Internet ad business well, having run aQuantive, the advertising company that Microsoft acquired for $6 billion last month. McAndrews' long-term strategy boils down to divorcing online advertising from Internet searches. The two have been viewed as a couple, because so many people use portals and search engines as their home base on the Web, but McAndrews says that model shortchanges advertisers and Web publishers. He …

Rumors are swirling that Time Warner Inc.'s AOL LLC business is considering buying ValueClick Inc. to boost its online advertising properties. The company is one of few publicly traded companies in its sector that hasn't yet been gobbled up by a major technology company. In the past year, Google Inc., Yahoo Inc., Microsoft Corp. and WPP PLC -- among others -- have acquired a variety of public and private companies in the space. The company's units include an affiliate marketing business, which could be of interest to AOL since AOL has shown interest in buying such companies. In …

Discount online retailer Amazon.com jumped into the digital music download business Tuesday by offering 2.3 million songs that can play on any portable device -- including the popular Apple iPod. More than 1 million of the tracks are being sold at 89 cents -- a dime less than tracks at Apple's iTunes store. Amazon's offering is about one-third of Apple's catalog, which has more than 6 million songs. ITunes was the largest online music store in 2006, with 70% of the market, according to research firm NPD Group. Amazon's music download service, called Amazon MP3, includes more than 180,000 …

AOL co-founder Steve Case's investment company Revolution LLC has launched an Internet-based payment system which would slash merchants' costs for accepting credit cards by some 75%. Revolution Money's first two products will be an online money-transfer service and a credit card with "significantly lower interchange fees" for companies that accept it, Revolution said. Revolution Money's proprietary operating system uses the Internet to circumvent the traditional interchange system, providing a drastically reduced fee structure that could create billions of dollars of merchant and consumer savings -- essentially flipping the industry on its head. The company will be chaired by …

The shift by The New York Times to abandon its subscription Web site may now influence a broad change across the entire newspaper industry. The Times officially walked away from its subscription model last week, deciding it could make more money by making its content free online -- including its vast digital archive that users have paid to access in the past. As that decision was made, News Corp. chairman Rupert Murdoch mused about doing the same with The Wall Street Journal. Though he has yet to close the purchase of the well-known financial broadsheet, …

DoubleClick Mobile will integrate with DART for Publishers to provide ad trafficking and yield optimization for campaigns designed to appear on phones. DoubleClick Mobile is launching simultaneously in the U.S. and Europe, a first for a DoubleClick product. Much of the development process was handled by its European operation. Next year, the company plans to release a more comprehensive mobile ad management suite that includes tools for agencies to plan and track their mobile campaigns. While the traffic to mobile sites is still small -- DoubleClick estimates typical impressions for major publishers are from 10 to 100 million …

A Senate hearing on the proposed Google-DoubleClick deal could foreshadow more government scrutiny of the online search company and even imperil the entire targeted online-ad model. Thursday's hearing will focus at least as much on privacy issues as on the anti-competitive aspects of the acquisition. Senior vice president David Drummond, Google's chief legal officer, is expected to testify. Joining him will be Brad Smith, senior vice president and general counsel for Microsoft, which has been vocal in its opposition to the DoubleClick purchase. Announced last April, the $3.1 billion agreement to purchase DoubleClick online ad-placement service represents the …

Microsoft Corp. is in talks to buy a minority stake in social network Facebook, a sign of a new urgency to jump-start its online business at a time when Google Inc. is leading the Internet-advertising business. Microsoft proposals could value the fast-growing site at $10 billion or higher. If those talks bear fruit, Microsoft could purchase a stake of up to 5% in the closely held startup, at a cost in the range of $300 million to $500 million. But Microsoft must first muscle out Google, which has also expressed strong interest in a Facebook stake. Along with Google, …

Investigators from New York's Attorney General Andrew Cuomo's office went undercover as under-age users of Facebook and were repeatedly sexually solicited. Investigators posing as underage users "were repeatedly solicited by adult sexual predators on Facebook and could easily access a wide range of pornographic images and videos," according to the AG's office. "Even more disturbingly, Facebook often did not respond, and at other times was slow to respond, to complaints lodged by the investigators -- posing as parents of underage users -- asking the site to take action against predators who had harassed their children." The AG …