Washington - The U.S. Department of Justice has announced a formal probe of Yahoo's proposed online advertising partnership with Google, and will seek documents and information from third party companies with a vested interest in the sector, The Washington Post reported on Wednesday. [more..]

Dallas - Blockbuster announced on Wednesday that it has decided to withdraw its $1 billion-plus bid to acquire electronics and media retailer Circuit City, citing market conditions. [more..]

Washington - The Federal Trade Commission (FTC) has announced that one of the operators of BurnLounge, a digital music distribution service the agency had determined was actually a pyramid scheme, has settled charges and agreed to give up $20,000 in ill-gotten gains. [more..]

London - Unsatisfied with the sound quality of MP3 and and other current digital audio formats, veteran rocker Neil Young has been talking with record companies on "licensing an alternative digital platform that he had been working on -- something, he claimed, of far higher quality that could provide an alternative to the download world and perhaps even a new business model for music," the Financial Times reported. [more..]

London - Italian police have shut down popular music file-sharing forum Downrevolution.net and arrested four alleged operators of the site, which counted 30,000 registered users, according to the International Federation of the Phonographic Industry (IFPI), a record label trade group. [more..]

Tempe, Ariz. - Content delivery network Limelight Networks said on Wednesday that a federal court has denied rival Akamai Technologies' request for a permanent injunction against the company, which a jury previously ruled has infringed Akamai's patents. [more..]

Shanghai, China - Chinese online game developer and operator Giant Interactive Group announced on Wednesday that it has paid $51 million for a 25% stake in Five One, an online social network in China. [more..]

Grapevine, Texas - GameStop, the world's largest video game retail store chain, announced on Wednesday that it will acquired The Gamesman, New Zealand's largest independent game retail chain. [more..]

London - Nimbuzz, a provider of VoIP and IM services for mobile devices and social networks, announced on Wednesday that it has raised a $15 million second round of funding, led by Naspers/MIH with participation from previous backer Mangrove Capital Partners. [more..]

New York - Digital advertising and entertainment network New Motion, Inc., which does business as Atrinsic, announced on Wednesday that it has acquired the assets of Ringtone.com, a mobile entertainment portal, for $6.25 million in cash. [more..]

Palo Alto, Calif. - PLYmedia, the developer of an interactive Web video platform that enables the addition of advertisements, subtitles, pop-up bubbles and other layered content to existing video, has landed $6 million to $6.5 million in new financing, TechCrunch reported, citing a source with knowledge of the deal. [more..]

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London - Apple is said to be developing a version of its iPhone with a slide-out keyboard to please corporate customers used to the BlackBerry device, The Register reported, citing senior executives at some mobile operators who had seen actual prototype [more..]

London - CBS-owned social music discovery service Last.fm announced on Wednesday that it has partnered with Radiohead to offer the band's "In Rainbows" album for free streaming from its site, supported by advertising. [more..]

New York - Time Warner's AOL on Wednesday announced the launch of BigDownload.com, a new joint project between AOL Games and Weblogs, Inc. that offers free PC game downloads, game reviews and industry news. [more..]