A battle of the boxes began today between Blockbuster and Netflix, the principal online DVD rental services in the US.

Blockbuster announced its MediaPoint digital media player to serve movies to TVs over the internet. Its response to Netflix’s Roku box, launched six months ago, differs in some important respects.

The Netflix box costs $99 and allows monthly subscribers to its postal service to stream the content of more than 10,000 DVDs to their televisions at no extra charge. The same capability is being built into certain high-end DVD players and the Netflix service also launched last week as part of the new interface for the Xbox 360.

The MediaPoint player, made by San Jose’s 2Wire, is being offered free to Blockbuster subscribers willing to pre-pay $99 for the first 25 DVDs served on it. DVDs rented after the 25 are used up will cost $1.99 to $3.99, but there is no monthly subscription fee.

The player has a more sophisticated interface - users can search through Blockbuster’s library  to choose what they want to watch, while the Netflix system requires queues of movies to be set up on a computer.

The boxes have similar capabilities, but the MediaPoint is prettier and has a USB connection, currently disabled, for external storage. Crucially, it also has internal storage for up to five standard definition movies or two high-definition ones at a time. The Roku box has no storage capability.

Blockbuster movies have to be watched within 24 hours once started, while Netflix allows its selection of movies, mainly older titles, to be watched and watched again over any length of time for free.

While Netflix streams its movies, making quality dependent on the robustness of the broadband connection - flakey at times, in my own experience - Blockbuster does “progressive playback”, which means the movie is downloaded to the device and can be started and played in consistently good quality while the data is still being downloaded.

Blockbuster says it is offering 2,500 “of the best, biggest and most current movies available” - so a smaller choice than Netflix but more recent material, with new DVDs available on the service within 30 days of release.

Blockbuster may have come out six months later with this device, but it is arriving in time for the big holiday buying season. It should appeal to  those who want a quality picture but have a less than stellar broadband connection and who also prefer to pay one-at-a-time for recent releases rather than choose from a larger back catalogue of free (monthly postal subscription apart) movies and TV shows.

Netflix should be concerned…although, it already has to worry about a plethora of competitors vying for space under the TV such as Tivo, Vudu and Verismo.

How much does spam cost? It’s hard to quantify in terms of bandwidth, time and effort blocking it, and general nuisance. But here’s a figure to mull over: $873m.

That’s how much Facebook has been awarded in damages against a spammer in a US court for sending unsolicited messages on the Facebook network. And if it sounds trivial in this era of multi-billion dollar bailouts, it’s a lot more than Facebook’s expected revenues for 2008 - more than double, in fact.

Facebook isn’t going to collect anytime soon as the company readily admits, but it’s supposed to act as a deterrent.

In any court sentencing there are a few factors to bear in mind. Does the sentence fit the scale of the crime? Is it an effective deterrent? Is it a suitable punishment? On any of these measures, fining a spammer nearly $1bn seems a bit pointless.

Scale: Symantec have calculated that the global internet fraud economy is worth $7bn. That’s assuming all fraudulently accessed credit cards and accounts are “maxed out”. So perhaps $873m is a little high?

Deterrent: Facebook isn’t getting the money. The spammer, Adam Guerbuez, isn’t paying up. Not much of a deterrent there.

Punishment: It’s headline grabbing, so perhaps that’s a good thing. Mr Guerbuez may not find much sympathy among his neighbours. But relying on headlines isn’t a long term solution.

Part of the problem seems to be the wildly differing fines that are bandied about by different courts. For example:

2004: FTC fines porn spammers $112k
2006: Marketer hit with $900,000 spam fine
2006: US spammer fined $11.2bn

So we have a range here from $112,000 to $11bn. I’m not sure what message spammers are getting from this, especially if they don’t have to pay.

What about jail? It does happen, but only for related offences, it seems. Perhaps being found guilty of simply sending spam could result in jail time, rather than these ludicrous fines. Would that be a better result?

Twitter’s $500m takeover talks with Facebook may baffle its non-users. While Twitter has a devoted community of millions, sceptics have dismissed its 140-character “micro-blog” posts as nothing more than Facebook’s existing status update feature. Both allow people to answer Twitter’s central question: What are you doing?

For Twitter’s co-founder, Biz Stone, the answer seems to be “quite a lot” towards making a greater distinction between a feature and a business.

Speaking during the annual Silicon Valley comes to Oxford event at Said Business School, Mr Stone refused to discuss the Facebook reports. But he did say that Twitter has finally moved on from fixing its frequent service interruptions. Twitter is now looking at how to create a richer experience, to win over those sceptics - and start making money.

Until recently, bringing new features to Twitter has taken second place to keeping the service online as it attracted new users. Innovation has largely come from third parties, who have used its API (which allows developers access to the Twitter back-end) to create new applications to post to Twitter, track contacts or display posts on maps. Such has been their success that Twitter gets 20 times more traffic through its API than to its own site.

“Now that we have stabilised the technology, we are finally able to start focusing on creating a sustainable company,” Mr Stone tells the FT.

Twitter will be “iterating on revenue products”, he says – trying several approaches to see what works. It’s a philosophy that stems from his time at Google, and also from Twitter’s own gestation as an accidental by-product of Odeo, an erstwhile podcasting company.

Twitter’s first commercial targets are companies who have set up Twitter accounts - such as Comcast, JetBlue and Dunkin Donuts - which they use for a combination of marketing and customer support. Mr Stone hopes Twitter can “help [brands] to do it better… This is something we want to move towards because it creates value for our users, commercial account holders and potentially for us.”

Twitter has raised three rounds of funding and grown to 26 employees but is yet to generate any revenues. “We aren’t worried about it,” says Mr Stone. “We think there is a lot of opportunity there, we think of it as an opportunity not a problem. We have enough money in the bank to be able to work on doing this for the amount of time we need to…. We are cautious in this [economic] environment but we are not freaking out. In the third round of funding, we sensed something was coming and said we had better be safe and raise enough money to do the things we need to do.”

One of those aims is to grow the network tenfold in the next year. So Twitter is working to improve its user interface, which has evolved little from the basic sketch that sparked the idea in 2006.

It is adding search and links to popular topics to Twitter’s start page, to make it easier for new users to understand. “Half the people that come to Twitter say: ‘What is this?’” admits Mr Stone.

Twitter’s ability to spot trends in its thousands of simultaneous discussions was demonstrated during the US elections, he says. A special Twitter site brought together posts from the candidates, lists of the most popular topics, and charts tracking spikes in Twitter discussions about particular topics as they were raised in presidential debates.

By adding information about global trends and local topics of discussion, Mr Stone hopes to “convert the naysayers who look at an individual [post] saying ‘I’m having toast and Marmite‘ and say: ‘Who cares?’”

Google has made two very interesting moves this week. The first was to close Lively, the company’s version of Second Life. The second was to launch SearchWiki, or personalised search results.

On the surface, these don’t look related. Closing the virtual world Lively might look like a simple investment call, but Google hardly has to worry about cashflow. The company has many projects that on the surface don’t make a great deal of money.

Google said: “we want to ensure that we prioritize our resources and focus more on our core search, ads and apps business.” The company also added that: “We’ve learned a lot about how users interact in rich social environments, and we hope you’ve enjoyed your time with Lively.”

Not learning enough, it seems, to keep the party going. And learning about people is what keeps the company growing, which is where SearchWiki comes in. Lively didn’t give Google enough data to chew on. If it had, it would still be going. But SearchWiki is a potential data goldmine.

With SearchWiki, users can now remove and promote search results directly in the Google page, make comments, and allow people to view what others have done. Google’s search algorithms may be the secret sauce, but adding this layer of user feedback adds another whole dimension to what Google knows about us. Given the millions of Google account holders and the billions of Google searches, it might well be the most direct and largest customer interaction project ever devised. Don’t like that search result? Kill it, or say why.

It’s only just launched, and there are already over 100 SearchWiki notes on Obama. And the data is flooding in. For example, the Wikipedia page on Obama, the second link, has 17 positive votes, two negative, and four comments, including, “I disagree with the suggestion that this be the first result. Google’s general pattern is that the site belonging to the search target comes first, and the best site about the target (often Wikipedia) comes second or third. Search for [ibm] or [yankees]. This pattern makes sense to me.”

Of course there are huge ramifications for spam tactics, coordinated action, censorship and the like. But the overall message from Google this week is loud and clear: we don’t do things just for fun - there has to be some payoff. And that payoff is data.

Nokia, the world’s leading mobile handset maker, has been giving some mixed signals about its research direction of late, an area where it spent more than $8bn in 2007.

Bob Iannucci, its first non-Finn chief technology officer, stepped down at the end of September after only nine months in the job. He had been based in Palo Alto and was head of the Nokia Research Center there, from when it first opened two years ago.

Nokia has not given the reasons behind his abrupt departure and has not announced any replacement. 

However, it did announce at The Way We Live Next press day in Palo Alto on Thursday that it was continuing to extend its research labs network. Hollywood will be added as a location, joining Palo Alto and Cambridge, Massachusetts in the US, two centres in Finland and others in the UK, China and Switzerland.

Henry Tirri, the current head of Nokia Research, said the new Los Angeles centre would focus on entertainment, one of three key areas of research he highlighted - the others being traffic and personal health. He said Nokia’s strategy and commitment had not altered.

“The world hasn’t changed, the talents are global, we go where the top innovation happens,” he said.

Rebecca Allen was introduced as head of the Hollywood lab. She was the founding chair and professor of UCLA’s department of design and media arts, a senior research scientist at MIT Media Lab Europe and the design manager for One Laptop Per Child’s XO notebook.

In the next year, she hopes to come up with some prototypes for how “Mobile Augmented Reality” can be developed for entertainment applications. The idea is that handsets in the future will have so many sensors, users will be able to see the world around them differently through their viewfinders and use their bodies and gestures more to give the device commands.

 In entertainment, this could mean some kind of alternate reality gaming and the new head also gave examples of enabling body movements, such as a hand on the heart being a command for making contact with a friend, while one on the back pocket would initiate a financial transaction.

The Palo Alto centre has been focusing on traffic and the power of aggregating data from sensors in phones. Its Mobile Millennium project, launched last week, is enrolling up to 10,000 motorists in a traffic monitoring system that uses GPS chips in phones to help build up a comprehensive picture of motoring conditions in the Bay Area.

Depending how you define them, Finland’s Nokia is by far the largest supplier of smartphones.

But Nokia position in the business smartphone market has been constrained in the past because, unlike BlackBerry-maker Research in Motion, it lacked the tools to enable companies to directly connect their corporate email systems to Nokia devices.

Now that is changing.

Nokia and IBM announced an agreement that will enable Nokia smartphones including more than 80m Nokia S60 devices already deployed, to access IBM Lotus Notes corporate email starting from next month.

In September Nokia signed a similar deal with Microsoft that enables Nokia smartphones to be tied into corporate Microsoft Exchange Servers and Outlook email systems.

As a result, Nokia claims that close to 90 per cent of corporate inboxes can now be accessed from Nokia devices without the need for third-party middleware, or perhaps most crucially in the current economic environment, any additional investment.

Nokia abandoned development of its own corporate email product this year, choosing to look for partners instead while focusing on developing phones for business users to better challenge RIM, the wireless email market leader.

RIM’s success in the corporate market reflects in part, its close relationships with telecommunications network operators and its success in persuading corporate customers and others to deploy its BlackBerry Enterprise Server software which provides a secure and reliable link into enterprise email systems including Microsoft Exchange and Lotus Notes.

Nokia’s latest announcements underscore the company’s determination to accelerate adoption of its smartphone devices, particulary its ‘E’ Series smartphones, in the face of increasing competition from RIM and other smartphone vendors including Apple with the iPhone.

In the third quarter Nokia sold 1.1m of its new full mini-Qwerty keyboard E71 phones, outselling RIM’s Blackberry Bold which is aimed at a similar high end market segment by bout five-to-one, according to Nokia. Since then however, the Blackberry Bold has been rolled out in additional markets including the US where it is exclusively on offer from AT&T.

Nokia’s Lotus Notes and Microsoft Exchange tie-ups level the enterpise smartphone playing field. Let battle commence.

Xbox users may be taking on a different personality with the launch of a new interface for the Microsoft game console.

Xbox Live’s 14m members are being urged to download the New Xbox Experience or NXE from Wednesday, which offers a 3-D interface and the chance to create your own avatar.

Microsoft will take some satisfaction in beating Sony’s PlayStation 3 to a revamp. Sony has still not provided an exact launch date for Home - its ambitious virtual world for the console, which has been beset by technical problems.

“Home is a tremendously ambitious undertaking and I don’t know of any home that isn’t built on a foundation,” Shane Kim, head of Microsoft Interactive Entertainment business strategy, told me, referring to the robustness of the Xbox Live infrastructure built up over the past six years.

“We do not think a virtual world is what people want, it is connecting to people and entertainment they care most about - social networks have far outpaced the growth of virtual worlds.”

Avatars are Microsoft’s one concession to virtual worlds and they are more realistic than Nintendo’s Mii avatars, but not as lifelike as those that will be available in Home.

Players will be able to start an online “party” with up to seven avatars of friends, where they can play games, share photos and voice chat.

Netflix subscribers will also be able to watch movies online through the new interface, with the DVD rental service offering around 300 titles in high definition for the first time.

Xbox Live users pay $50 a year for full access to Microsoft’s online service and Mr Kim said there would be further revenue opportunities through sponsorship and sales of special clothing and accessories for avatars.

It looks like the message finally got through.

Steve Ballmer has already said it more than once. For good measure, he said it again today in front of Microsoft’s own shareholders: “We are done with all acquisition discussions with Yahoo.”

From Wall Street’s point of view, that seemed to give the statement the official ring of truth it lacked before. Mr Ballmer’s parting gift has just whacked another 21 per cent off Yahoo’s share price.

It’s probably a bit churlish to point this out, but the stock is now within 50 cents of where it stood when Terry Semel took over in the depths of the 2001 slump.

There are two things to note about Yahoo’s current share price. One is that, if you take off its $10bn or so in cash and investments (Yahoo Japan and Alibaba), Wall Street thinks the rest of the company is not even worth $3bn. That is less than 2x its expected ebitda next year. And this is a company whose vast - and apparently loyal - online audience has at times been coveted by most big media companies.

The other is that at today’s price, Yahoo’s stock market value has now fallen to roughly the value of its search business alone. Mr Ballmer was at pains again today to leave open the option of a “partnership” with Yahoo. If that means going back to the search partnership that Microsoft proposed last June, analysts reckon it could be worth $10-13bn to Yahoo shareholders (though Microsoft’s negotiating power is probably greater now.)

So, in theory, whoever takes over from Jerry Yang as CEO could hand the search business over to Microsoft and all the rest would be upside.

At some point, Yahoo’s stock just has to stop getting cheaper. That hasn’t been a good bet in 2008, though.