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.

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!

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.

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.

On February 1, 1960, in Greensboro, North Carolina, four African-American students sat down at a segregated lunch counter in a Woolworth's store. That touched off a series of sit-ins and boycotts that spurred the U.S. civil-rights movement.

Founded in 1879 in Lancaster, Pennsylvania, F.W. Woolworth stores were the epitome of the American five-and-dime discount retailers, and the company was one of the largest retail chains in the world through much of the 20th century.

By 1910 the company was successful enough to commission the Woolworth Building in New York City, the world's tallest skyscraper until the completion of the Chrysler Building in 1930.

Woolworth's became the model for many other five-and-dimes throughout the United States. Oddly enough, such discount stores were sometimes criticized for driving local merchants out of business, a charge that would later be leveled at big-box stores.

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?

I've got to be honest, I wasn't so sure that Amazon's (NASDAQ: AMZN) Kindle device would be a hit. But, according to BusinessWeek, it seems like it's doing okay. Kindle, which is a reading platform for e-books, actually experienced sell-outs after it was launched last fall. And now, CBS's (NYSE: CBS) Simon & Schuster has upped its support of the platform by increasing the number of titles from its portfolio to be sold on Kindle. How does 5,000 more titles from Simon & Schuster sound?

Just great, I'm sure Jeff Bezos would say. And who can blame him? It looks like people are really taking to Kindle, and although I don't think reading books for pleasure in such an electronic manner will ever come remotely close to challenging printed tomes, I know it's still important for Amazon to have a strategy in this arena. And like I mentioned at the beginning, the fact that Kindle seems to have had a strong start is very impressive.

I've been thinking about free digital downloads for a while now, and with the success such models have seen in the last seven months or so (since Radiohead's In Rainbows was released), it would seem only natural that the record labels would recognize that value in their product should not be based on money or profits. Automatically I realize that the kind of suggestion I have made is detrimental to the music industry and the artists that produce music, even when some of the said artists are embracing free download business models. Nevertheless, it is not surprising in the least to see the music industry fighting tooth and nail to retain some control over the business they rightly think they should control.

Like it or not, "American Idol" season seven champion David Cook is off to an impressive start with 11 songs entering Billboard's Hot 100 chart this week, and 14 songs enter the magazine's Hot Digital Songs, both records. Billboard notes that the Hot 100 placing is the most any artist has enjoyed on that chart since The Beatles scored 14 hits in 1964. Cook's record is the first in Billboard's Nielson Soundscan "era" (i.e. since 1991) and shatters Miley Cyrus's 6-song debut in November 2006. Cook's digital debut is also a record and beats out Cyrus again. According to Billboard, Apple Inc. 's (NASDAQ: AAPL) iTunes Store withheld reporting digital sales until the show had ended.

Cook is also ready to enter the studio, according to E! Online. The winner signed to RCA Records, a Sony BMG label, and 19 Recordings for a new album in the fall. E! erroneously calls the new album Cook's "debut", when he released an independent album in 2006, but that album and its songs were pulled from Amazon.com (NASDAQ: AMZN) as he worked his way through "American Idol" competition.

Simon Fuller, "American Idol" creator, told E! that he "honestly believes that David has the potential to go on to become one of the most successful Idols of all time." If early success and an independent album can hold fans until the fall, then Cook will certainly enjoy a huge release. Regardless, "American Idol" winners and finalists albums always seem to do well at first. It's only later that they lose steam or interest from their supposed fans. Still though, 11 chart debuts is impressive and Cook may never be in the same league as The Beatles, but his success may well come close to duplicating the Fab Four.

The CD single is dead. At least that is what British supermarket giant Woolworths Group plc (LSE: WLW) is predicting as the company drops the format due to declining sales and with hopes of creating a download store. The chain will remove CD singles from shelves starting in August, but will retain the format for one-off releases like the British TV show X Factor, similar to American Idol in the United States.

Billboard reports that this move could end the use of CD singles across Britain altogether, but figures for CD singles sold versus digital downloaded single tracks were not made available. Woolworths stores sold 25.5% of singles in 2006, while the format has dropped from 55 million units sold in 2000 to just eight million last year.

In what looks to be a pretty desperate attempt to revive its failing business, Borders Group Inc. (NYSE: BGP) has officially cut its ties with Amazon.com (NASDAQ: AMZN) and launched its own e-commerce website. Under the previous arrangement, shoppers at Borders.com had their orders fulfilled by Amazon, with Borders taking a small commission.

Check out the site here. It offers some great incentives to switch over from Amazon -- like free shipping on orders over $25! Oh wait. Amazon and Barnes & Noble (NYSE: BKS) already offer the exact same deal. Never mind.

Borders invested a lot of money in developing a site with no particular competitive advantages. Most Amazon customers are pretty happy with the service they get, and I just don't see any reason for anyone to switch. The duplication of effort probably makes Borders less attractive to potential strategic buyers like Barnes & Noble, which might have preferred that the company pay down debt instead of building another website.