RealNetworks, Inc. (NASDAQ:RNWK) should have saw this coming when they release their new controversial RealDVD software.  While RealPlayer already allows you to download any video from YouTube or powered by Flash, RealDVD allows you to rip DVDs and make back up copies.  RealDVD was officially launched today.  Six major studios announced that they are suing the software company over the software.

These studios believe that many of Netflix and Blockbuster’s customers would just burn the movies that they rent with the RealDVD software, thus causing them to lose out on a great deal of money.  The lawsuit was filed at the U.S. District Court in L.A. 

“The incentive for the consumer is obvious and all but overwhelming,” stated a request by the movie studios.  The request was for a temporary restraining order. “‘Why,’ he or she may ask, ‘should I pay $18.50 to purchase a DVD when I can rent it for $3.25 and make a permanent copy?’”

RealNetworks defends their software by saying it is legal.  RealDVD is sold for $30 per consumer at $20 for up to four licenses after that.  The software copy is locked into the original owner’s hard drive and does not alter the encryption technology used by movie studios already.  Copying one’s own personal copies of a DVD is “fair use” by law. 

The movie studios stated that RealDVD violates the Digital Millenium Copyright Act to bypass technologies that prevent the copying of a DVD without permission of the copyright owners.  The movie studios that are suing RealNetworks includes Viacom, Inc. (NYSE:VIA)’s Paramount Pictures, Sony Corporation (NYSE:SNE)’s Sony Pictures, News Corporation (NYSE:NWS.A)’s 20th Century Fox, General Electric (NYSE:GE)’s Universal, The Walt Disney Company (NYSE:DIS) studio, and Time Warner Inc. (NYSE:TWX) Warner Bros.

[image credit: About Ning]

Marc Andreesen has joined the eBay Inc. (NASDAQ:EBAY) board of directors starting immediately.  Marc is also signed up on the board of Facebook and is an investor in Digg, Plazes, Netvibes, Qik, LinkedIn, Revision3, and Twitter.  Marc is also a co-founder of Ning and accumulated most of his wealth from his involvement with the starting of Netscape Communications Corp. 

Netscape was acquired by AOL for $4.2 billion and another one of Marc’s companies (Opsware) sold to H-P for $1.6 billion.  Marc has a lot of experience with growing and selling businesses.  Perhaps he will be able to bring his wealth of knowledge to eBay.

“Marc is a true visionary whose experience will be invaluable to eBay,” stated John Donahoe, president CEO of eBay. “We look forward to learning from Marc’s insights and expertise as we drive further innovation on our platform, invest in growth opportunities and develop technology that will further benefit our customers, build powerful communities and enhance e-commerce.”

Ning currently hosts about 480,000 social networks on it’s platform.  Ning’s current valuation is about $1 billion based on the $104 million venture capital investment. 

Google Inc. (NASDAQ:GOOG) stock dropped by $200 per share in the last couple of minutes of the market closing today.  The Nasdaq Stock Market operator is currently investigating some of the transactions that might have happened as an error.  “Participants should review their trading activity for potentially erroneous trades and request adjudication,” stated the surveillance arm of the Nasdaq OMX Group.

Bethany Sherman, a spokeswoman of the Nasdaq stated that they are investigating the trades that occurred in the last 3 minutes of the market closing (3:57-4PM E.S.T.).  “We’ll take a look at the trades and make a judgment as to whether there were erroneous trades,” Sherman reported.

Clearly by looking at the highs and the lows, there is a data error with calculating the stock price.  The low is $0.01 and the high is $498.36.  The stock should be back above the $400 mark by the opening of the market again tomorrow.  Those who made the trades at the abnormal prices will most likely be undone.

A few Swedish book publishers have came together because they believe a lot of their books are being pillaged on The Pirate Bay.  The book publishers have stated that about 85% of all of the best selling books in Sweden are on The Pirate Bay.  Peter Sunde, co-founder of The Pirate Bay stated that it’s a bit sad that it’s not 100%.

To find out the statistic of the number of best selling books on The Pirate Bay, the publishers created an illegal specialized code that would scrape The Pirate Bay’s torrent database since there wasn’t another way to find out besides searching for each book manually.  The Pirate Bay owns the copyright to their database of torrents.  And the book publishers violated The Pirate Bay’s Usage Policy. 

Sunde stated that he called up the book publishers to find out more about the code that they implemented to find out the book download statistics so he can send them an invoice.  If they don’t pay up, Sunde plans on taking them to court.  Sunde is also currently planning a new project that may involve the Amazon.com Kindle.

Clearspring Technologies is a widget company that generates revenue through a Widget Ad Network.  The company announced this morning that they have acquired AddThis.  AddThis is a bookmarking button that appears alongside many blog and online news publications.  AddThis also appears on the homepage of Pulse 2.0 at the bottom left where it says “Bookmark.”  AddThis has about 200 million users and 300,000 publishers.  Clearspring aims to become the leading content sharing widget. 

I first wrote about AddThis in October 2006.  AddThis is based in Princeton, New Jersey.  AddThis is also used on sites like TIME Magazine, Oracle, EW, Topix, Lonely Planet, PGA Tour, Tower Records, FOX, ABC, CBS, America Idol, Glamour, and WebMD.  The AddThis button is loaded 20 billion times per month.

Dom Vonarburg is the Founder and CEO of AddThis.  The company officially launched at DEMO 2006. Although the acquisition price is not known, AllThingsD predicts that the amount was for a few million and some form of stock swap.  AddThis’ main competition is ShareTHis and Del.icio.us.  Clearspring makes about $10 million in revenue per year and believes that they can use AddThis for advertising purposes and data analytics.

Clearspring also has about $35 million in funding since they started in 2004.  Investors in Clearspring include Steve Case, and New Enteprise Associates. 

“We’re thrilled to let everyone know that the House bill passed! Thanks to your incredible support we were able to overcome the NAB’s efforts to derail us,” stated Tim Westergren, chief strategy officer at Pandora. “Phone calls rained into the congressional offices over the past 36 hours. Just amazing.”

Tim is referring to the House or Representatives passing the Webcaster Settlement Act.  The Act allows Internet music streaming companies to negotiate royalty rates for playing songs at a rate lower than the price that Congress decided was mandatory last year.  If the legislation doesn’t pass, it might set back Internet music companies like Pandora for months.  The phone calls from the public helped the legislation pass with the House of Representatives.

The National Public Radio (NPR) helped push the legislation through the House too.  The NPR is created and funded by Congress.  And since NPR supports the bill, companies like Pandora benefitted from NPR’s connection to Capitol Hill. 

The National Association of Broadcasters did not like the legislation because they feared that web streaming music companies would be able to make deals first.  SoundExchange, the royalty-collecting arm of the Recording Industry Association of America extended their deadline to negotiate with the NAB until February 15 (from December 15), so a settlement was made.

The only thing that is left for Internet music streaming companies are to push for the legislation through The Senate and reach a royalties agreement with musicians and label companies.

Pandora is expected to reach $25 million in revenue this year.  About $17.5 million is going towards paying royalty fees ($48,000 per day).  Throw in the cost of bandwidth and Pandora doesn’t come out with much profit.  This legislation is huge in order for Pandora to stay in business.

The Senate will be voting on the legislation tomorrow.

Peter Sunde is one of the co-founders of The Pirate Bay, one of the world’s leading torrent sharing websites.  Sunde recently wrote in a blog post:

I’m looking for someone who can sponsor me with an Amazon Kindle! It’s not possible to buy the device from Europe and it’s super expensive to use mailing dropboxes in the US.

Do anyone wanna help me out? I’m looking to make an interesting service together with some friends in the New Media Market…

Sunde also linked to a blog post written by Martin J. Thörnkvist.  Thörnkvist ranted about how businesses don’t learn from other businesses.  This includes the music industry not learning from the newspaper industry.  And also includes how the movie industry is not learning from the music industry.  “The printed word is not safe from digitization,” wrote Thörnkvist.

Is The Pirate Bay co-founder working on a new e-book project?  He stated that he’ll tell anyone that sponsors him with a Kindle, including Wired.

Steve Ballmer, CEO of Microsoft Corporation (NASDAQ:MSFT) delivered his point-of-view on the direction that he is taking the company.  Ballmer stated that Microsoft is the only that will provide “any real competition” to Google Inc. (NASDAQ:GOOG) for search engine market share. 

The best line that was made at the dinner taking place at the Churchill Club in Silicon Valley last night was, “We need to do some work to fundamentally reinvent the search business
model,” stated Ballmer. “You don’t brute-force your way into a market. You only make
great strides when you redefine the category for the user.”

Does someone need to remind Ballmer about Internet Explorer’s entrance to the browser market?  Pretty ironic, eh?  I disagree with Ballmer in that line he made. I think it is totally acceptable to brute force your way into a market.  You don’t enter a market and stay quiet about it in order to become a successful business.  If Microsoft didn’t brute force their way into the browser market, who knows whether browsers like Chrome and Firefox will be around.  Those two browsers were released because consumers wanted to see more choice.

Ballmer also mentioned that Microsoft is willing to spend 5-10% of their operating income to become a dominant player in search.  Ballmer was also asked to comment on the current competition with Apple Inc. (NASDAQ:AAPL)

“Apple’s a good company, I won’t take anything away from them, but they
have a certain kind of strategy. They believe in putting the hardware
and software together, they don’t believe in letting other people make
it.”  This is why it will be hard for Apple to become a real threat to Microsoft’s operating system.