It's wabbit season!

There's only good news for Playboy (PLA) when someone expresses an interest in buying it. Shares of the ailing men's lifestyle company shot higher on Thursday when word got out that Iconix is interested in acquiring it. Iconix owns and licenses brands to manufacturers and counts Candie's and London Fog among its holdings. A deal isn't a sure thing, but Playboy now has something it hasn't in a while: hope.

Iconix has been looking to acquire more brands. And Playboy has been looking for a knight in shining armor (and with a hefty war chest in tow) since at least June, when Scott Flanders took the helm. But it looked like acquisition bait well before then, thanks to a rough financial situation.

Finally, the federal government has accepted an offer from Girls Gone Wild founder Joe Francis. Earlier this year, the feds turned down his request for bailout money, but the filmmaker entrepreneur executive soft-core porn guru had better luck with the judiciary branch. His deal to get out of jail came through.

U.S. District Judge S. James Otero accepted a plea agreement that Francis reached with prosecutors. It will put him on probation for the next year for filing false income tax returns. He was also sentenced to time served -- 301 days, but that's all in the past. He also has to pay restitution of $250,000.

According to USA Today, amateur pornographers armed with little more than a webcam and a computer are giving the major players in the adult entertainment industry, like New Frontier Media (NASDAQ: NOOF) and Playboy (NYSE: PLA) a run for their money.

Sales and rentals of adult DVDs have plummeted in recent years, and now sites like PornoTube.com and YouPorn.com (such clever names ... not) are allowing consumers to download user-generated content to their computers, and even cell phones ... for free in most cases.

While the big porn companies have been pretty quick to move onto the internet, replacing DVD sales, you have to wonder how much user-generated content will hurt their sales. Is Playboy delivering a product that much better than some of the amateurs on PornoTube? I wouldn't know because I'm a good boy.

Shares of Playboy and New Frontier have performed poorly over the past few years, and you have to wonder: How much does branding really matter in an industry that is now flooded with free content?

The market doesn't appear to be giving Playboy a lot of credit for the brand it's been building for the past 54 years: The stocks trades with a market cap of $365 million, which is about 1 times sales. If the brand does still have value, it could be ripe for a buyout -- but only if that's what Hef wants.

It's long been thought that investing pornography companies can provide a hedge against an economic downturn. In times of high unemployment, men have more free time, are often depressed, at home alone, and...you know the rest. So perhaps the recent numbers for adult DVD sales are a bullish signal for the economy. In 2006, sales of adult DVDs fell by more than 15%, after a decade of steady growth.

So has the porn industry fallen on hard times? Maybe not. The growth of adult sites on the Internet and even cellphones may just be spreading the wealth more broadly: it used to be that people bought DVDs, but now they have many other options.

If you're interested in making a bet on growth in the industry, the two main publicly traded players are New Frontier Media, Inc. (NASDAQ:NOOF) and, of course Playboy Enterprises, Inc. (NYSE:PLA).

Last week, for the first time ever, Chinese men had a chance for that once-a-year spectacle that so many American men have counted on for decades: the Sports Illustrated swimsuit edition. While pornography is still outlawed by the communist government, it's a wall that appears to be on its way down. Soft-core pornography is becoming more available, and some websites are going even further.

It seems likely that as China continues it's sprint toward modernization, pornography will one day be legal there. When that happens, the adult entertainment industry will gain access to a huge new market. I would continue to monitor China's laws and, in the event that pornography is legalized, take a long look at stocks like Playboy Enterprises (NYSE:PLA) and New Frontier Media (NASDAQ:NOOF).

Of these two companies, New Frontier has been performing far better of late. But an iconic American brand like Playboy may find new life in China, where all things American (like baseball) are the rage.

An interesting law has passed the preliminary round of voting in Israeli parliament today regarding adult sites. Under the proposed law, access to adult sites on the internet would be limited to those identified through physical means such as a fingerprint or smart card readers. Violent and gambling sites are also considered.

These readers are certainly becoming more common on computers these days. Microsoft Corp. (NASDAQ:MSFT) is offering such readers on keyboards and mouses, Lenonvo is bundling them with its products. Dell Inc. (NASDAQ:DELL), Sony Corp. (NYSE:SNE) and Hewlett-Packard Co. (NYSE:HPQ) offer them too, just to name a few.

According to studies, 60% of Israeli youth (9-18) has been exposed to pornography on the internet, most of them unintentionally, reaching the content accidentally (allow me a cough here). The studies also show that 44% of the parents didn't know their kids came across such content.

I can certainly understand the frustration parents feel and I'm sure similar data on kids exposed to adult content is true in most countries. These sites sure are common. Only the other day my mother-in-law complained that while searching for Jet Blue in Google Inc. (NASDAQ:GOOG), she was directed to a porn site. I have heard many such similar complaints.

However, this law certainly sounds a bit far-fetched to me and not that enforceable either. I'd much rather parents get involved in the education of their kids more. For me, the truly shocking number is the 44% of parents who had no idea. What were they thinking?!

Can you say "publicity"? Evidently, that's all Jeffrey Toback, a member of the Nassau County (Long Island) legislature knows. He's suing Google for the children, claiming that the company's search engine promotes paid ads for child pornography companies [*cough* EVIL! *cough*].

Naturally, Google says that it is not "the largest and most efficient facilitator and distributor of child pornography in th world." And that this is just a publicity stunt. What? No, not really?

Mike from Techdirt weighs in, explaining that "the law here is extremely clear: a service provider is not directly responsible for what people do on their platform" and calling the lawsuit "ridiculous" and "a misunderstanding both of the law and how Google works." Ridiculous it may be, but Jeffrey Toback's name is on everyone's lips today. Investors evidently agree with Mike; the stock is up $1.50 in intraday trading, to $396.25.

Apple has finally found a product, in the iPod, that is an unqualified profit monster. The company is morphing from niche hipster to provider of music to the masses. And as part of the transformation they're making moves that never before seemed possible, like using Intel chips and (horrors!) Microsoft software on their computers. New strategies indicate that Apple is willing to be creative and do some interesting deals, like the one where the Red Hot Chili Peppers are selling advance tickets to their upcoming tour through the iTunes store.

The obvious next step? Porn, says Mark Gilbert (no relation to yours truly). If iPod owners will watch films on their 2.5" screens, surely they'll watch movies of an, umm, more lascivious nature. It's a huge money business; if Apple could get just a sliver of that $20 billion in adult video sales each year, they might continue their finally-respectable growth. But is growth respectable if it's (literally) made on the backs of the naked and promiscuous?

I love profits and all, but for the same reason I wouldn't invest in cigarettes, I'd feel very different about an Apple (fruit of the tree of good and evil) sinking its strategic go-juice into porn. Mark Gilbert doesn't agree, with the (flawed) rationale: "A search on Google Inc. shows a bunch of companies willing to sell the content and software needed to view erotic material on an iPod. Apple may as well grab some of that revenue for itself." With this logic, you could justify anything. I, for one investor, will pass.