Bottoms up!

Intel this afternoon gave investors a reason to hoist a beer mug or two, posting $8 billion in second-quarter revenue powered by sales of its Atom processor, used in fast-selling netbook computers, lightweight laptops that sell for as little as $200.

Intel Chief Executive Paul Otellini said the results "reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half." 

Translation: Computer makers are expecting a surge of back-to-school shoppers and better holiday sales than in 2008, when consumers reined in nearly all discretionary spending.

The Santa Clara, Calif., chip maker, however, posted a $398-million quarterly net loss, or 7 cents a share, primarily because it paid a record $1.45-billion fine imposed by the European Commission on charges that the company restricted competition in the semiconductor market. It had a $1.6-billion net profit in the second quarter last year. Its $8 billion in revenue represented a 12% improvement over $7.1 billion in sales posted for the first quarter of this year but an erosion from $9.5 billion a year earlier.

Even so, Wall Street loved what it heard, pushing Intel's stock up $1.20, more than 7%, to $18.03 in after-hours trading following the earnings release. The stock earlier in the day had closed up 34 cents to $16.83.

Intel's results kick off the earnings season for the tech sector, with Google coming up Thursday and Apple and Yahoo next Tuesday, followed by EBay, Microsoft and Broadcom later in the week.

-- Alex Pham

Twitter is about eavesdropping on random conversations and figuring out which parties to join. Not into celebrity blather? Don't follow @BritneySpears. Love cycling? Check out @LanceArmstrong. There are literally millions of conversations happening on Twitter. You don't need to be listening to every single one of them.

Once again, we tapped Andrew Nystrom, the Times' social media guru who Twitters @latimesnystrom. His advice follows.

1. Start with your friends. Twitter lets you import contacts from your Gmail, Yahoo or AOL e-mail accounts. It will show you which of your contacts have Twitter accounts.

2. Be picky. Resist the temptation to "select all" of your contacts to follow. Because this is the default option when you import your contacts, you need to uncheck the box to select all. Start with dozen or so people to begin with. This helps keep the signal-to-noise ratio low. The idea is to funnel as much useful, relevant information to your page. Start with a dozen people. Andrew has a good Twit Test: If you can't wait to open a personal e-mail from this person, follow him.

3. Pick a topic. If you're passionate about a particular topic, say video games, try sites such as WeFollow, which is a directory of Twitter accounts organized by topic and ranked by popularity. 

4. Poach your friends' follow lists. Chances are, you share a common set of interests with your friends. If that's the case, they may have some leads for you. Check out who they're following and "eavesdrop" on those conversations by reading a few of their posts. If you like what you read, follow them.

5. Talk about your passions. Start by filling that all-important "Bio" with keywords of topics you're interested in, whether it's comic books, World of Warcraft or "Twilight." People with similar interests will start replying to you. If they're interesting, you've found a new best Twitter friend.

As your reward for reading this far, here are two bonus tips from Andrew (pictured above with his son, Maximo). Once you've Twittered for a few weeks, try recommendation engines that analyze your Twitter stream and suggest like-minded people for you to follow. Be careful, though. Some of these sites ask you to divulge your account name and password. Do so only if you know you can trust the site. One recommendation site that seems legit is Mr.Tweet.

Second bonus tip: Don't be afraid to unfollow people. If you find yourself getting annoyed or bored with someone, unfollowing them is not a big deal. You're not hurting anyone's feelings. "It's pretty impersonal," Nystrom said. "It's all about finding conversations you're interested in."

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Apple this morning said its iTunes store has served up more than 1.5 billion apps, those snack-sized pieces of software for the iPhone or iPod Touches that do all sorts of random things.

Since launching the App Store exactly a year ago, more than 100,000 developers have been busy cranking out a mind-bending 65,000 apps on the site. Some are useful (GPS apps that help the navigationally challenged, for example). Others are amusing (witness the explosion of games, a select list of which appears here from What They Play). Some unleash our inner artist. A handful are offensive, including the controversial Baby Shaker app. And some are just inane. Remember the $1,000 app that did absolutely nothing?

To celebrate this cornucopia of apps, we'd like to invite you to nominate your faves. Cast your votes in the comment box below, and at the end of the week, we'll publish the list of winners. Here are the categories:

• Most useful app
• Most useless app
• Best game
• Wackiest app
• Worst crApp ever
• Best news app
• Best time waster
• Best free app
• Best paid app
• App most likely to impress your friends at a party

-- Alex Pham and Michelle Maltais

Take-Two shares plunged $1.12 to $7.86 after gaining 14 cents following its BioShock 2 bomb announcement.

BioShock is a marquee franchise for Take-Two, which also publishes Grand Theft Auto and 2K Sports games. Because Take-Two's fiscal 2010 begins Nov. 1, the announcement leaves open the possibility that BioShock 2 could still make a holiday release date.

The move is bad news for the company's current fiscal year, which ends October 31, but great news for its 2010 fiscal year, said Jesse Divnich, director of analyst services at Electronic Entertainment Design & Research in Carlsbad, Calif.

"I expect them to dominate fiscal 2010," Divnich said. "BioShock 2, Max Payne 3, Red Dead Redemption, Mafia II, additional Grand Theft Auto Downloadable Content (DLC), and the possible launch of Agent should make fiscal 2010 the year of Take-Two. As far as I am concerned, Take-Two is just moving numbers from one financial year to another."

Take-Two also said its sales of older releases, so-called catalog titles, as well as retail orders of new releases, have been soft. With the economy eating into game sales and the delay of BioShock 2, the company forecast lower-than-expected earnings for the remainder of this fiscal year.

-- Alex Pham and Ben Fritz

Microsoft today said it will make a free Web-based version of its popular Office suite for the 400 million people who have its Windows Live service. The product, which would include lightweight versions of Word, Excel, PowerPoint and OneNote, would debut next year and compete with Google's free online Google Docs suite.

Like Saturn eating its young, Microsoft risks cannibalizing its most profitable business in doing so, says Reuters. The Redmond, Wash.-based business software division, which includes Office, made $9.3 billion in profit from $14.3 billion in sales during the first three quarters of its 2009 fiscal year.

The announcement is the latest tit-for-tat in an increasingly intense rivalry between Microsoft and Google. The Mountain View, Calif., search giant last week said it would develop an operating system designed to lure users away from personal computers, Microsoft's home turf, to using applications on the Internet, where Google has a dominant presence.

Dubbed Chrome OS, the software would be made available to the open-source community, which implies that it would, like Android, be free, unlike Microsoft's Windows operating system, which powers more than 90% of the world's computers.

Here's another way that Google and Microsoft compete. Both are in contention for the title of technology's 800-pound gorilla, a designation that entitles the winner to intense regulatory scrutiny, fear and distrust. As tech blogger Anil Dash pointed out, inheriting the mantle means being subjected to the axiom of  "Hanlon's Razor" -- once a company dominates its market, mistakes from oversight or stupidity will be attributed to malice.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Google made waves in the tech world this week when it announced plans to release an operating system that would encourage wider use of something called cloud computing.

Although most have never heard of cloud computing, many do it every day. By uploading photos to Facebook, sending messages via Gmail or playing Club Penguin online, users are accessing programs and software files that live far away in cavernous, climate-controlled rooms containing thousands of computers.

To help explain this shift in the way we use computers, we turned to Andreas Bechtolsheim, co-founder of Sun Microsystems and chief development officer for Arista Networks, a Silicon Valley startup that supplies networking equipment used to build these massive arrays of cloud computers.

As it turns out, Bechtolsheim was also one of the first people to invest in Google back in 1998, when the company was just two Stanford geeks with a laptop. His  $100,000 investment in the company started by Sergey Brin and Larry Page, along with several other shrewd calls, turned the Birkenstock-wearing engineer into a billionaire.

We spoke to the 53-year-old serial entrepreneur recently about cloud computing, his investment philosophy and his latest venture, Arista Networks. An edited version of the conversation is below.

Q: What do you make of the potential for cloud computing, both as a market and a technology?

Bechtolsheim: It is a surprising evolution in the history of computing. Every application can now shift to the Web. You can access any application remotely. My startup does the networking plumbing for this.
IDC has estimated that by 2012 the market for cloud computing infrastructure will grow to $42 billion, up from $16 billion in 2008. It’s the fastest-growing slice of the spending on information technology. Right now, it’s small sliver of the overall pie. Most of the spending is for the applications. But it’s a growing slice of the pie.

Q: What are some uses of cloud computing?

Bechtolsheim: Hollywood uses high-performance clusters to ...

... render movies. The advantage of the cloud is that it’s always running and not idle. They get much better utilization. These compute farms can simulate car crashes, render movies. Facebook also does an enormous amount of computing going on behind the scenes to generate relevant content to you. That’s what is going on inside the cloud farms. What you see is just what is relevant to you.

Q: As a consumer, what’s the benefit?

Bechtolsheim: You get convenience. You don’t have to deal with servers, data storage or big expensive computers. The laptop accesses everything. You don’t have to worry about backup or security; it’s all being handled by the company that manages the cloud.

Q: Who are some of the key players in this space?

Bechtolsheim: The leader is Amazon. They started in the business by renting out their idle servers during non-holiday-shopping seasons. Google provides applications in the cloud.  Facebook is a cloud company; they host a number of third-party applications on their cloud.

Q: How did your initial investment in Google come about?

Bechtolsheim: This was in 1998, and I was using the Internet to search for things. Alta Vista was the search engine then, and they had a very simple algorithm. It counted the number of times words appeared in the document. So people built these dark pages behind the Web page to game the system. As a result, the search results became useless, and doing a high-quality search was impossible.  I was just interested in getting better search results. After I heard from Larry and Sergey about their idea, I rushed out to my car to get my checkbook. The company didn’t exist yet. So I wrote them a check and said, “Here’s a check to get you started.”

Q: You’ve made a number of smart calls over the years. What do you look for in an investment?

Bechtolsheim: When you invest in a company, you want to see a viable business plan where it can be profitable over time. In the late 1990s, there were a lot of companies that basically just took an idea for an existing business and put it on the Internet. They took dog food, for example, and sold it online. That wasn't a very good business model. Whereas Amazon created something completely new that you couldn’t find a single physical bookstore.

Q: What else?

Bechtolsheim: Simplicity. If an idea makes intuitive sense in the first five minutes, it’s probably a good idea. But the more time it takes to understand, the worse it gets. Google was a very simple idea.

Q: Tell us about your latest venture.

Bechtolsheim: Arista Networks addresses a void in the market for simpler, faster and more scalable Ethernet switches. Cisco dominates this market, but their products have become increasingly complex and expensive. Our focus has been on creating software that can be used to build large networks that play well together and are very reliable. In essence, we are building better plumbing that is more scalable and more redundant [than competing switches]. We do it by solving a fairly basic problem that hasn’t been solved in 10 years.

Q: As a non-engineer, I almost hesitate to ask what that problem is.

Bechtolsheim: People are building cloud systems that have tens of thousands of computers. It sounds simple, but the key thing here is cost and how you hook it up so computers can all talk to each other in a way that minimizes latency. But the existing network protocols don’t scale well. So we came up with a way that does. For every challenge, there is a solution.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Broadcom Chief Executive Scott McGregor, who only two weeks ago sweetened his bid 20% from $764 million, said his Irvine network equipment company will now pursue "other value-creating alternatives." The company said it would not renew its offer when the offer expires July 14.

The announcement ends a contentious process marked by lawsuits lobbed by both Orange County companies. Broadcom initially had sued to invalidate an Emulex poison pill designed to ward off hostile takeovers. Emulex, based in Costa Mesa, countered with a lawsuit charging that the antics of former Broadcom chief executive Henry Nicholas made the company untrustworthy. 

Nicholas, who is no longer involved in Irvine company he founded, is awaiting criminal prosecution on two federal indictments, one on a stock backdating charge and another alleging he had supplied narcotics to acquaintances.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Dubbed Google Chrome OS, the operating system is designed to work with the company's Chrome Web browser, launched nine months ago and downloaded by 30 million users. Google said the software will be optimized for small, lightweight laptop computers called netbooks, a fast-selling category of inexpensive machines that sell for as little as $250 and are used primarily to surf the Web and check e-mail.

In a blog post announcing the product, Google's vice president of product management, Sundar Pichai, and its engineering director, Linus Upson, said:

Speed, simplicity and security are the key aspects of Google Chrome OS. We're designing the OS to be fast and lightweight, to start up and get you onto the web in a few seconds. The user interface is minimal to stay out of your way, and most of the user experience takes place on the web. And as we did for the Google Chrome browser, we are going back to the basics and completely redesigning the underlying security architecture of the OS so that users don't have to deal with viruses, malware and security updates. It should just work.

Google did not say whether it would charge for the software, but references that it would work with the open-source community of developers suggest that the company may make it freely available. Microsoft, on the other hand, charges about $200 for each copy of its Windows Vista operating system.

"The release of an operating system is just another part of Google's strategy to more rapidly and cheaply spread access to the Internet via a multitude of different devices -- desktops, netbooks, mobile phones, set top boxes, etc.," Ben Schachter, an analyst with Broadpoint AmTech, wrote in a note this morning to investors.

Schachter said Google wants to eventually lure businesses away from Microsoft's Windows operating system towards so-called cloud computing, in which businesses can use lightweight computers to access applications and data that are managed via large data centers and served over the Web.

"Longer term, Google hopes a free operating system may encourage more small and medium-sized businesses to move towards an enterprise software solution in the 'cloud' and away from Microsoft," Schachter said.

-- Alex Pham

ZeniMax Media raised $105 million to acquire id Software, according to a document filed today with the Securities and Exchange Commission.

Id Software, which created the Doom and Quake game franchises, stunned the game industry two weeks ago when it announced its acquisition by ZeniMax, which publishes the Elder Scrolls series of role-playing games developed by its Bethesda Softworks studio. The sale surprised many because id Software, based in Mesquite, Texas, had rebuffed numerous buyout offers over the years, preferring to maintain its independence.

Because both companies were privately held, neither was obligated to divulge the price.

The filing with the SEC suggests that the price may have been $105 million. That's what ZeniMax issued in the form of a "convertible note," so called because the holder of that bond can convert it into either cash or shares in the issuing company. It's unclear from the filing if ZeniMax used the entire amount to pay for id or whether the deal called for additional payment.

ZeniMax and id Software declined to comment on the filing.

ZeniMax, based in Rockville, Md., has deep pockets backing the company. In 2007 it snagged a $300-million investment from Providence Equity Partners, and its board of directors include retired baseball player Cal Ripken Jr., CBS Corp. President Leslie Moonves and Hollywood producer Jerry Bruckheimer, who in May announced his entry into the video game business.

Updated 6:42 pm to reflect the companies' denial for comment.

-- Alex Pham and Ben Fritz

Follow or random thoughts on games, entertainment and technology on Twitter @AlexPham and @BenFritz.

Musicians want to be heard. Actors need to be watched. Writers like to be read. And what better way to get an audience than to make these works free? But artists also need to eat. How to reconcile?

Chris Anderson, author of "The Long Tail" and Wired magazine's editor in chief, says the two are not mutually exclusive. He's also putting his money where his mouth is. The 47-year-old Berkeley writer is giving away his latest book, titled "Free: The Future of a Radical Price" and published by Hyperion Books.

More precisely, he's letting people read the entire book free till Aug. 10 on Scribd, a site that lets authors set their own price for digital copies of their works. The book's title aside, the giveaway is not as radical as it seems. In fact, it's perfectly rational, Anderson said in an interview.

"The book is about making money from free," he said. "I felt it was important to walk the talk."

For one thing, his book is free for only a month, after which readers will have to buy it (the hardback version retails for $17.99 on Amazon.com). Secondly, it can't be downloaded on Scribd; readers have to read the free version online. This fits with the "freemium" model -- give away the basic version to build your initial audience, then sell them premium features, such as the ability to download the book or having a physical copy.

A host of well known online services follow this model, including ...

... Club Penguin, Free Realms and Flickr. And, in his book, Anderson describes an effort by Monty Python's Flying Circus to do the same by launching a free YouTube channel with free videos of their comedy acts. At the end of a video they created to explain their decision, members of the troupe ask their fans to go out and buy the DVD versions of their movies. The stunt worked; within three months of launching the free YouTube channel, Monty Python videos became the No. 2-selling DVDs on Amazon.com, with sales soaring 23,000% in that time frame.

"If we believe that the physical book is the premium version, because it looks good on the shelf or it makes a nice gift, then we should not fear free," Anderson said in the interview. "It exposes people to the book. It should be used for marketing. And I hope that some fraction of them would convert to buyers."

How many buyers? Anderson confesses that he doesn't know the answer. As of 1 p.m. today, less than 24 hours after it was released online, his book has been viewed for free by more than 22,800 readers on Scribd. 

"We're in uncharted territory," he said. "And my publisher has taken a leap into the dark and unknown with me. We're betting it's going to pay off."

But wait, there's more. Anderson created two audio versions of his book, a three-hour abridged recording and a full-length, six-hour version. One of them is free. Conventional wisdom would suggest that Anderson would give away the shorter version. Wrong.

"The six-hour one is free," he said. "If I can give you 90% of the book in half the time, I’m giving you back three hours of your life. Time is money."

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Yahoo says it will roll out a new feature tomorrow afternoon that automatically detects when users of its search engine are gathering research on a particular topic and saves their results in one place.

Called Search Pad, the feature is supposed to solve a problem that many researchers on the Web have -- how to keep track of those bits of information they dig up from multiple websites. Say you're planning a vacation to Hawaii and you're looking up car rentals, hotel reviews and flight information. Yahoo says its search engine will recognize what you're doing, save the search results on a single notepad, let you write notes on those sites and allow you to share your research results with friends.

Search analysts who have seen and used the feature say it's useful but not a game changer for the Sunnyvale, Calif., company, which is struggling to compete with Google for search advertising. In May, Yahoo's market share for Internet searches was 20%, second place behind Google, which claimed a 65% share, according to ComScore.

"For existing Yahoo users, it can be valuable," said Greg Sterling, an analyst in Oakland who reviewed the feature in February when in rolled out in beta to selected users. "But I don’t think it will dramatically increase their market share."

-- Alex Pham

I have exactly 103 followers on Twitter. In the world of social media, that's pathetic.

So I sought some professional help from Andrew Nystrom, the Times' social media doctor (he has a respectable 4,790 followers as of this posting). I told Andrew that I was adding about one follower a day. At this rate, I can become a factor in about, oh, three years. That's because nothing interesting happens until you have at least 1,000 followers.

Andrew gave me five quick tips for making me more popular on Twitter. If you want more pearls of social media wisdom, you should follow him @latimesnystrom. For now, here’s a CliffsNotes version:

1. Be social. When someone follows you, send them a message. It starts up a dialogue that can bear fruit in the long run when they re-Tweet your posts or when their followers start following you. 

2. Schedule your Tweets. One of our most successful Twitterers stays up until 3 a.m. to post Tweets and posts at 3 a.m. Pacific, early enough to catch the East Coast traffic as they wake up and start cruising the Web. He refreshes those Tweets and posts with updates at 8 a.m. for the West Coast crowd for double the pleasure! 

3. If you have a blog, provide links at the bottom of each post to encourage readers to follow you. If you have a Facebook or MySpace account, you can collect followers by posting your more interesting Tweets as updates, along with a link to your Twitter account. 

4. Use hash tags. Many power Twitterers still search for posts pet topics by using hash tags. Say you want to dive into conversations about Michael Jackson’s memorial service tomorrow. You should post Tweets about the event and end them with a #michaeljackson so that they would show up when other people are searching for information on him. 

5. Talk about other people’s Tweets as much as you talk about your own. It’s part of being a good Web citizen, but it also pays back dividends when people return the favor.

And because you read all the way to the end, here’s a Bonus Tip as a reward. If you Twitter about someone with a Twitter or Facebook account, send them the link. They’re likely to send it to their friends and so on, and so on.

Do you have Twitter Ninja moves you want to share? Write them below! Oh, and you can follow my technology and video game musings @AlexPham.

-- Alex Pham

The U.S. Department of Justice is examining cellphone carriers' exclusive deals with handset makers, according to a report this morning by the Wall Street Journal. For those who don't have a online subscription to the Journal, you can get a summary here from Reuters.

The informal probe focuses on agreements such as Apple's exclusive multiyear deal to supply AT&T with iPhones in the U.S.

Consumers have complained that such deals restrict them to a single service provider and offer them little choice. These deals have also triggered complaints from smaller wireless carriers that don't have the wherewithal, such as guarantees to buy large volumes of devices, to strike an exclusive contract with handset manufacturers.

The Justice Department may be looking for guidance in European markets, where phones purchased there can work with any carrier, said Charles Golvin, a telecommunications analyst with Forrester Research. But that would be a mistake, he said. That's because the two markets function differently.

European regulators long ago established a single standard for all carriers, called GSM, so any cellphones purchased in Europe can work for any carrier. But the U.S. has competing standards, including GSM and CDMA. This matters because a GSM phone will not work on CDMA networks. Sprint and Verizon use CDMA, while AT&T and T-Mobile are on GSM.

"We ended up with an alphabet soup of technologies," Golvin said. "So the lessons learned in other markets don’t always apply here."

-- Alex Pham

Is the Internet the new boob tube?

Kids ages 2 to 11 years spent more than 11 hours online in May, up from seven hours in May 2004, according to a report released today by the Nielsen Co. What are they doing? Many are watching videos -- boys flocked to Pokemon, and girls followed Barbie. Another gender difference: Boys spent 7% more time online in May, but girls zipped through 9% more Web pages.

Children in this age group made up nearly 1 in 10 Internet surfers in May, up 18% since 2004. That's 16 million kids under 12, according to the report.

One explanation for the jump in activity -- there's just a lot more for kids to see and do on the Web since 2004, including virtual-world games such as Free Realms and Club Penguin and websites featuring offline kids' brands such as Nickelodeon and Sesame Street. With many of these sites focusing on Internet safety, parents are also becoming more comfortable letting their children explore the Web, particularly when sites such as KidZui offer a higher level of parental control.

You can download a copy of the press release here.

-- Alex Pham

"The United States has reviewed public comments expressing concern that aspects of the settlement agreement may violate the Sherman Act," wrote William F. Cavanaugh, the Justice Department's deputy assistant attorney general, in a letter to Federal District Court Judge Denny Chin, the judge overseeing Google's settlement.

The letter goes on to say that although the department has "no conclusions as to the merit of those concerns," it did see issues that "warranted further inquiry."

Google emphasized that it is cooperating with the Justice Department investigation and maintains that the settlement would be good for consumers.

"The Department of Justice and several state attorneys general have contacted us to learn more about the impact of the settlement, and we are happy to answer their questions," said Google Spokesman Gabriel Stricker. "It’s important to note that this agreement is non-exclusive and if approved by the court, stands to expand access to millions of books in the U.S."

The settlement reached last fall between Google and the Authors Guild and the Assn. of American Publishers stemmed from the search giant's project to scan millions of books and create a searchable digital library of works that would potentially become the basis of a digital book market.

Paul Aiken, executive director of The Authors Guild, downplayed the significance of today's move by the Department of Justice. "It appears to be just an official acknowledgement to the court of an investigation that we have known about for weeks," Aiken said. "It’s no indication that anything has changed."

Reports surfaced in late April that Justice Department regulators had questioned Google and several advocacy groups that have spoken out against the settlement. Weeks later, publishers and The Authors Guild also confirmed receiving civil subpeonas from Justice seeking more information on the settlement. But until today, the Justice Department has not said whether those inquiries constituted a formal antitrust investigation.

In recent months, a number of parties have objected to the agreement, including a group of libraries, a consumer rights group and the Internet Archive, a nonprofit organization that seeks to digitize public domain books and make them freely available online to all readers. Many of the objections involve concerns that Google would create a monopoly for millions of "orphan" books whose rights holders cannot be located.

The Justice Department did not immediately return calls for comment.

Updated 4:25 p.m.: This post has been updated to include comments from Google and the Author's Guild.

-- Alex Pham and David Sarno

AT&T sent out a message yesterday to its subscribers touting its new voice-guided turn-by-turn navigation service, operated by TeleNav.

For "just $9.99 a month," the message said, subscribers can "get there faster, safer and without any hassles."

Turns out the monthly fee is a hassle to some. True, AT&T is simply the conduit for the underlying service from TeleNav in Sunnyvale, Calif. But the carrier still is getting some grief from consumers. One reviewer at ComputerWorld argued that the "free" iPhone app was a "Trojan horse into your wallet." (It's free to install but costs $9.99 a month to use.)

The broader question is whether consumers, who have grown used to free or very inexpensive apps that do a dizzying array of high-tech tasks, will still go for a subscription model. For AT&T and TeleNav, their competitors are TomTom, which showed off its turn-by-turn app last month at the Apple Worldwide Developer Conference but has yet to announce a pricing structure, and Google Maps, which provides directions for free but doesn't have some of the bells and whistles of TeleNav. There are also the traditional GPS devices, which cost as little as $99.99, no monthly fee required.

Tell us where you would turn for directions. Would you pay 10 bucks a month for a service on your iPhone? Or would a frills-free Google Maps app work just as well?

-- Alex Pham

A Bankruptcy Court judge on Wednesday approved the sale of most of Midway Games' assets to Warner Bros. for $33 million in cash, removing the last big obstacle for the movie studio to acquire the rights to Mortal Kombat, Spy Hunter, Joust and a small library of classic game franchises. Warner will also gain two development studios in Seattle and Chicago.

The Chicago game publisher filed for bankruptcy protection this year after it was unable to satisfy creditors. Last year, majority owner and media mogul Sumner Redstone sold his 87% to Mark E. Thomas, a mysterious Massachusetts investor with no experience in video games, for a mere $100,000. As a result, the financially troubled Redstone was able to claim a $700-million tax loss in 2008.

It turned out to be a sweet deal for Thomas, who received $5 million from the sale to Warner Bros., according to the Chicago Tribune.

Warner Bros. was the only bidder to emerge last month in the sale of Midway's assets. Warner has not said what it plans to do with Midway. One can only surmise that there will be more games similar to Mortal Kombat vs. DC Universe, which sold more than 2 million units.

-- Alex Pham and Ben Fritz

Skip the vending machines. More Americans are grazing online for entertainment news at work than last year, according to a report released today from Web research firm comScore.

About 55 million people in the U.S., or roughly one in four Internet users, visited at least one entertainment news site in May, up 7% from a year earlier, the report said. Half of the time spent on such sites occur at work.

"Americans are feeding their hunger for celebrity gossip by ‘snacking’ on these news updates throughout the workday," said Jack Flanagan, comScore's executive vice president.

Top sites benefiting from this fascination with Hollywood stars include Yahoo's omg!, TMZ, People, USMagazine and Entertainment Weekly.

In all, Americans spent 15 million hours online stargazing. Impressive as that may be, the number for June is likely to skyrocket, after millions of fans surged online to read news about Michael Jackson's death, nearly crippling some online services, such as AOL's Instant Messaging, and flooding sites such as Facebook and Twitter with traffic.

-- Alex Pham

He's back.

Steve Jobs returned to work at Apple's Cupertino, Calif., campus, company spokesman Steve Dowling said. Jobs in January took a six-month medical leave of absence, saying he would return at the end of June. And it appears Jobs has fulfilled his promise.

"He's at Apple a few days a week, and working from home the rest of the week," Dowling said. "We are very glad to have him back."

Neither Jobs nor Apple revealed the nature of his illness while he was absent. Only weeks ago, it was reported that Jobs underwent a liver transplant during his leave. He was described by his physician as being "the sickest patient" on the list of transplant candidates at the time of his surgery. The disclosure startled Apple observers and led some securities experts to question whether the company withheld information that would have been material to investors.

The 54-year-old co-founder of Apple, known for his relentless attention to detail, is seen by some as the driving force behind the company's products. He was pushed out in 1985 but returned to a weakened company in 1997, and has since built an organization that thinks much the way he does. That, analysts said, has led to minimal operational disruptions -- both while he was away and now that he is back.

"I think the executives know who runs the ship," said Danielle Levitas, an analyst at IDC. "I don't expect his return to be problematic. The bigger strategic issue for Apple is how to get all those senior executives who have taken on more responsibility to continue to stay in the spotlight as much as possible because there are lingering concerns about his health. Investors need to see a team in place that is capable of creating amazing products." 

-- Alex Pham

Times up! The deadline for submitting bids to buy Midway Games passed Wednesday afternoon with just one offer -- a $33-million deal from Warner Bros. to purchase most of the bankrupt Chicago company's assets.

After Warner Bros. lobbed its offer in May, Midway had hoped to spark a bidding war that would jack up the price. A Chicago investment group and several game publishers had been kicking the tires at Midway, according to a source familiar with the discussions. But none pulled the trigger on a deal.

"No other bids came in, so there's not going to be an auction," confirmed Midway's spokesman, Geoff Mogilner. 

Before the deal goes through, the Delaware court overseeing Midway's bankruptcy will have to resolve complaints by several creditors about the acquisition process. One of those is producer Larry Kasanoff's Threshold Entertainment, which produced two previous "Mortal Kombat" films and claims it has exclusive big-screen and TV rights to the series. Also objecting to the sales process is Tigon Studios, a production company controlled by Vin Diesel, which claims it is owed $200,000 for the star's work on the recently released game "Wheelman."

The next court hearing to address those and other issues will be July 1. As soon as they are resolved and the bankruptcy court officially approves Warner Bros.' bid, the acquisition will close 10 days later, Mogilner said.

Warner Bros. declined to comment. An acquisition would buttress Warner's growing game portfolio, according to a report today in the Times.

The offer includes most, though not all, of Midway's assets, including the company's Mortal Kombat, Spy Hunter, Joust and Wheelman franchises. It also includes two of Midway's four development studios -- one in Chicago and another in Seattle. It remains unclear what will happen to the company's studio in Newcastle, U.K., which makes the Wheelman games, and its studio in San Diego, which is developing a wrestling game based on a license with TNA Entertainment. Those assets could potentially be sold to another buyer.

-- Ben Fritz and Alex Pham