Billboard reported Thursday that MasterCard Inc. (NYSE: MA) has launched a new campaign titled "Roots of Rock" that offers free downloads for cardholders from Universal Music Group. Apparently the free aspect of the campaign is limited and after 100,000 songs have been downloaded, MasterCard will begin to charge $0.80 per track. Even after the credit card company begins charging for downloads, pricing for tracks is still lower than Amazon.com Inc. (NASDAQ: AMZN)'s MP3 Store ($0.89) or Apple Inc. (NASDAQ: AAPL)'s iTunes Store ($0.99).

Cardholders who also make a purchase by August 31 will be "entered into a sweepstakes with a grand prize of having a meet and greet with Jon Bon Jovi, Eric Clapton or Kenny Chesney." MasterCard executive Amy Fuller told Billboard with the new campaign, the company has "created unparalleled music experiences with three of the world's most popular artists, providing consumers with an intimate perspective on these icons that few fans will ever have." But those fans will have to win the sweepstakes.

MasterCard's campaign to offer free downloads is like numerous other programs that are linked with music companies, but it offers to take the digital market to a larger consumer base. Lowered prices (eventually) for the campaign mean that Universal Music Group will continue to hold on to the lead in music sales, if only because the music company is the only one on board with MasterCard. Consumers that might not have ever downloaded a track may be enticed to try out the campaign and the sweepstakes. This type of growth is what the music industry will need if digital sales are ever going to replace physical sales successfully and completely.

Over the past couple years, major players like Google (NASDAQ: GOOG) and Amazon.com (NASDAQ: AMZN) have invested in the so-called "cloud." Basically, they are leveraging their huge infrastructures to provision services – like web hosting, storage and so on – to other companies. Actually, I know many startups that have such deals (helping to cut costs and get to market faster).

But what if you don't want to outsource this? Well, there is an alternative: Parascale. The company sells cloud software that you can install on your own servers.

As an indication of its power, Parascale has raised $11.37 million in a Series A round. The investors include Charles River Ventures and Menlo Ventures (both firms have extensive backgrounds in the storage area).

Parascale got its start four years ago. Interestingly enough, it hasn't been an easy journey. The original team had to get second mortgages and lines of credit to support operations.

But now, it looks like the timing is right. "With the explosion of digital content," said Sajai Krishnan, who is the CEO of Parascale CEO, "there is a need for more efficient storage systems."

The Parascale Cloud Storage (PCS) is built on widely followed standards as well as Linux servers. This makes it easier for customers to adapt the technology to their needs (which is not an easy thing to do with Google and Amazon.com).

No doubt, the storage marketplace has gone through several major shifts over the past twenty years. So, with cloud storage, it looks like we may be seeing another shift – and Parascale will now have the resources to become a leader in the space.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

The Financial Times reported last week that representatives for The Beatles, Activision Inc. (NASDAQ: ATVI), and MTV Games, a division of Viacom Inc. (NYSE: VIA), are in talks about developing Beatles-themed video game versions of Guitar Hero and Rock Band "in a move that could pave the way for a broader licensing of the Fab Four's catalog." Although the final deal would eventually be worth several million dollars, it would have to win over both Apple Corps and the EMI Group, the two companies that oversee the band's business interests and the master recordings.

The Beatles have been one of the major artists to resist any move into the digital world, but if such a deal were to occur it would likely happen simultaneously with any move by The Beatles into digital stores and the digital market. In the past year and a half, numerous rumors have appeared that cited 2008 as the year that would see the move, including comments made by Olivia Harrison, George Harrison's widow. Unfortunately, no such appearance by the band into stores like Apple Inc.'s (NASDAQ: AAPL) iTunes or Amazon.com Inc.'s (NASDAQ: AMZN) MP3 Store has happened even with a new management team led by former Sony BMG executive Jeff Jones.

Any deal would send a massive shockwave through the music industry and no doubt come with numerous marketing and advertising techniques that have become popular and successful in recent years. Although many Beatles purists and fans might be put off by an iTunes-themed commercial featuring The Beatles and the band's music, the exposure provided by such a method would increase awareness of the band to younger and newer audiences.

The Wall Street Journal is reporting today that Amazon.com (NASDAQ: AMZN) is likely facing additional sales tax challenges in eight states besides New York. The New York issue has been well-publicized, with the state imposing new rules that would make Amazon subject to sales tax there because of the presence of affiliates.

Normally, sales tax must be collected by a retailer only if that retailer has nexus (usually a physical presence) in a state in which an item is sold. In the past, nexus generally meant that the company had physical operations there, so the change in New York law, which now includes the presence of affiliates, is a big change. But courts also have ruled that the physical presence test is not the only way to create nexus.

The new wrinkle in the sales tax issue has to do with the distributions centers Amazon has around the country. The WSJ says [subscription required] that there are eight states with Amazon warehouses or distribution centers, but that Amazon has avoided collecting sales tax in those states by operating the facilities as subsidiaries of the parent company. Sales tax laws have permitted this exception when a facility is part of a separate legal entity.

Talk to anyone about what little technology company has a chance at being the Next Big Thing in social media, and chances are you'll hear the name "Twitter." Everyone's twittering about Twitter, even my mom knows all about it. News of the platform's $15 million funding round has been making the rumor rounds for over a month,

Today the rumors were confirmed with news of the funding on the Twitter blog, and a new nugget: Jeffrey Bezos of Amazon.com (NASDAQ: AMZN) is one of the funders, through his personal investment company, Bezos Expeditions. The company didn't confirm the size of the round (or so much of a whisper of the company's valuation), but said they would spend the money on the always-aching infrastructure and reliability.

As my favorite media analysis guy Marshall Kirkpatrick says, "As founders are concerned, Bezos could be called Mr. Scalability - making this an awesome partnership to tackle Twitter's biggest obstacle." It may not prove great things for Twitter's one-day IPO; Bezos certainly hasn't proven to be a brilliant generator of shareholder value -- but for today, it's proof that the great idea has a lot of legs.

Amazon.com (NASDAQ: AMZN) shares are falling today after the company announced this morning that it has opened an office supplies division designed to compete with Staples Inc. (NASDAQ: SPLS) and the like. Evidently, investors aren't too excited by the Amazon's entry into this already struggling portion of the retail sector. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on AMZN.

After hitting a one-year high of $101.09 in October, the stock hit a one-year low of $61.20 in March. This morning, AMZN opened at $79.55. So far today the stock has hit a low of $77.63 and a high of $80.08. As of 12:30, AMZN is trading at $80.04, down $0.64 (-0.7%). The chart for AMZN looks bullish and steady, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.

For a bearish hedged play on this stock, I would consider an August bear-call credit spread above the $105 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in two months as long as AMZN is below $105 at August expiration. AMZN would have to rise by more than 30% before we would start to lose money. Learn more about this type of trade here.

Recently, I was shopping for a couple of books on half.com. However, having spent about a half hour in my search, I decided, at the last minute, to forego my purchases. While the sellers were offering great prices, the shipping raised the books' costs to above what I would pay in a local bookstore. In the end, it just wasn't worth it.

As the price of gas goes up, so does the price of postage. While this hasn't been much of a concern with the U.S. Postal Service, private carriers like DHL, UPS (NYSE: UPS), and FedEx (NYSE: FDX) all pass the cost of fuel on to their customers. For example, at the end of 2007, UPS was tacking on a 4.75% gas surcharge for ground deliveries. Right now, it's 8.5%, with an even higher price for express shipping.

Some retailers are fighting back with free shipping or a flat fee for unlimited shipping. Unfortunately, while these deals may draw in customers, they chip away at the sellers' bottom line. As many online sellers have built their client base by offering better-than-store prices, the added costs may make it impossible for them to generate sufficient profit. This is likely to be particularly devastating for companies like Amazon.com (NASDAQ: AMZN), who are completely reliant upon their internet sales. At the very least, we're likely to see a major surge in companies that use U.S. Postal Service!

Nokia (NYSE: NOK) has decided it would like to get beat up and spit out by the entertainment industry. It also thinks it can compete with Apple (NASDAQ: AAPL) in the content distribution business.

Nokia is the world's largest seller of handsets, with about 40% of the market. Since the margins on that business are being pushed down by lower price for phones sold in places like China and India, the firm needs somewhere else to turn for revenue. Hollywood, where budgets mean nothing, seems like a good choice.

According to The New York Times, Apple's lock on digital music could help Nokia. The paper writes, "Another possible advantage for Nokia is that music companies welcome a challenger to Apple. They are wary of Apple's growing power in digital music distribution."

But Apple is not the only problem. Dozens of companies from Amazon (NASDAQ: AMZN) to Sony (NYSE: SNE) are trying to get a piece of the portable entertainment pie. Most content is likely to be available to all distributors under some kind of contract. The large media companies have little reason to restrict themselves in exclusive deals.

The reason Nokia will probably never be a big "media" company is that a hundred other companies want the same thing. Everyone can't win.

Douglas A. McIntyre is an editor at 247wallst.com.

Apple Inc. (NASDAQ: AAPL) reported Thursday that the company's iTunes Store has passed the five billion download mark from the store's "catalog of more than eight million songs, over 20,000 TV episodes and in-excess of 2,000 film titles." Most impressive are the number of movies customers rent or purchase each day, which is reported to be in excess of 50,000 movies. This announcement comes as the price of Apple's stock has fluctuated slightly Thursday.

Despite this seemingly great news for the music industry, some artists are not as happy about iTunes' share of music sales and distribution. According to Pulse 2.0, Kid Rock has decided to "completely boycott iTunes" because it is an "old system" where the store and the record company take all profits and do not share it with the artists. Even more revealing, when asked his opinion about music piracy, Kid Rock advocated "leveling the playing field" calling for people to steal everything, from music to gas, because either way the executives and distributors have enough money and will not "miss" what consumers steal.

Thinking about those sentiments and how much pull iTunes has in the music market raises questions about other stores that have emerged in the past year, like Amazon.com Inc.'s (NASDAQ: AMZN) MP3 store. That store notoriously acts as nothing more than an agent for the music companies, with Amazon.com taking a small fee versus the power that iTunes exerts. Whether artists see any more money from Amazon.com's arrangement is unknown, but without Amazon.com working as another distributor it would seem hopeful and more likely.

Billboard reports that Amazon.com (NASDAQ: AMZN) and eMusic will soon offer new pricing schemes in an effort to boost digital music sales. While Apple Inc.'s (NASDAQ: AAPL) iTunes Store retains its popular $0.99 per track price scheme, Amazon.com will offer "Daily Deals" and a "Friday Five" promotion. At the same time, eMusic will be raising prices for new customers, increasing the entry-level plan from $10 to $12 a month, but offering existing customers 10 more downloads per month for the extra $2.

Amazon's "Daily Deals" plan "will feature a new album every day, sold at a discounted price that will vary by title." Billboard cites the current offer with Coldplay in which the band's first three albums offered for $2 in promotion of the band's newest release, Viva la Vida or Death and All His Friends. The "Friday Five" plan "will feature five albums for $5 each" on Fridays.

Both plans come at a time when the music industry has been pushing digital stores to offer variable pricing models, but with Amazon.com the labels exercise the control they really want. Amazon.com's MP3 store operates as little more than an outlet for the labels to sell music and all sales go directly to the label with Amazon.com taking only a small handling fee. Assuming that Amazon.com's new pricing offers are directed from the labels, it's a sign that the music industry is taking another look at what consumers want and how much they are willing to pay.

Before the bell: Futures higher after BUD offer, ahead of retail sales

American International Group (NYSE: AIG) shareholders -- former AIG director, Eli Broad, and two fund managers , who together control about 4% -- are asking for changes to the management and board of the world's largest insurer, which has been struggling with the fallout of the subprime mortgage mess.

Caterpillar Inc. (NYSE: CAT) said it will spend $1 billion over the next two years to expand capacity in five of its Illinois factories, and will shift production at some of its plants to address the demand for machines used mostly in mining and large infrastructure projects.
Also, CAT and Navistar International Corp. (NASDAQ: NAVZ) will begin cooperating to pursue new on-highway truck business and cooperate on an variety of engine platforms.

Starbucks Coffee Co. (NASDAQ: SBUX) said Thursday that it has reached a licensing agreement with SSP to open coffee retail stores in more than 150 airports and train stations in Europe. Financial terms were not disclosed.

The Associated Press reported Monday that vinyl records have made a surprising return in some markets in the last year. A story about an employee at the Fred Meyer retail chain mistakingly ordering the vinyl edition of an album instead of the special edition CD with a DVD illustrates the impressive jump LP sales made between 2006 and 2007, rising more than 36% while CD sales dropped 17% due to increased digital downloads (CD sales remain hundreds of millions of copies higher though). The article also indicates that regional and specialized chains are not the only outlets selling LPs successfully, with both Amazon.com, Inc. (NASDAQ: AMZN) and Best Buy Co, Inc. (NYSE: BBY) creating sections and testing sales.

The resurgence in LP sales has also stoked the raging debate about differences between analog and digital formats. Melinda Merrill, a spokeswoman for Fred Meyer told the AP "It's not just a nostalgia thing, the response from customers has just been that they like it, they feel like it has a better sound." The AP also reports that sound is not a central factor in increasing sales. The experience of listening to an LP, much more involved than a CD or a digital file is drawing new listeners and keeping old ones. This tendency has lent to more sales of players and the pressing business has been renewed.

In the end, increased LP sales make it clear that consumers care about more than the music that is produced. Jay Millar, a director of marketing at United Record Pressing indicates that he feels vinyl is "for the die-hard music consumer," or the consumer that isn't looking for the most convenient method of acquiring an album and its music. Unfortunately, the mainstream music industry and its consumers will continue the push away from LPs and CDs, but if regional or independent retailers can keep the limited pressings intact via strong and surprising sales, then the history of the music industry and the "original" format that is as close to live music as you can get will continue to live.

This post is part of a series on some of the most memorable companies that have disappeared.

What goes up, must come down. It was a cute ad. Who knew it would turn out to be so prophetic?

Pets.com will go down in history as a textbook example of dot-com flame-out, going from IPO to liquidation in nine short months.

Founded in 1998, the company, which had the bright idea of selling pet food and supplies to the public via the internet, went public in February 2000 and raised $82.5 million.

This post is part of a series on some of the most memorable companies that have disappeared.

Back in the heady dot-com days of 1999, any parent who didn't want to brave the holiday season parking lots knew what to do: Get online and buy those Christmas presents at eToys.com. Unlike Toys-R-Us, which had recently gone online itself, eToys seemed to know what it was doing. It offered a vast array of toys at reasonable prices, and it got them to you on time as promised.

But by March 2001, you were back to the Toys-R-Us option -- by then allied with Amazon.com, and doing online retailing the right way. In the end, eToys proved no more durable than the Furby -- much sought-after, priced up by speculators and hype, only to ultimately end up in the backyard, broken and ignored.

eToys went up fast and crashed hard, (not unlike a pogo stick), and in many ways it remains a textbook example of the excesses and "irrational exuberance" of the dot-com era.

Do you like auctions? Personally, I don't. Sure, the stock market is essentially an auction, but it's an auction without a lot of noise (at least on my end). Anyway, this brings me to a BusinessWeek piece on eBay (NASDAQ: EBAY) and its evolution. It looks like auctions are no more fit to survive than the dinosaurs were. Research overwhelmingly shows that users of the most famous online auction destination in the world would rather pay a fixed price for an item than haggle over it like a frantic trader at a busy bazaar.

Now, as one commenter made clear in the article, this changes the essential gene structure of eBay's DNA. But is mutation necessarily bad in this case? Not to my way of thinking. To be honest, I haven't done any eBaying directly; I usually use a friend to acquire an item for me if I'm looking for something. Not only am I too lazy to open an account, but I dread having to play the auction game. Why put up with such nuisance? When I want to buy something, I don't want to compete and see values change. Think about it: when you go to Wal-Mart (NYSE: WMT), do you want to barter over a bar of soap?

Okay, so we're not talking about bars of soap. We're talking about items that, to be fair, do lend themselves to the auction motif. Comic books, autographed photos, rare recordings, and so forth, are definitely fair game for the electronic gavel. Still, it's annoying. Wouldn't you rather know that a rare copy of The Texas Chainsaw Massacre for the Atari 2600 is $200, take it or leave it, and that you didn't need to get down in the pits to start bidding for it?