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The path to world domination is paved in round numbers, especially big ones like this: 5 billion.

The face of the iTunes store.

(Credit: Apple)

That's the number of songs that have been purchased and downloaded from the iTunes Store, Apple said Thursday. (Actually, for the record, the press release says "over 5 billion.")

That shouldn't be surprising, of course. Apple's iTunes store has long overshadowed the rest of the music download scene. Rivals have launched many an assault, but even e-commerce competitors as savvy as Amazon.com still face quite an uphill battle--sales of songs at 9-month-old AmazonMP3, the No. 2 digital music store, are only a tenth the volume of those at iTunes, according to market researcher NPD Group.

Apple is, in fact, the largest music retailer in the United States, period, having pushed past Wal-mart Stores earlier this year. And it seems to be making a healthy profit from its iTunes operations. No wonder many a politician is toying with the notion of taxing digital downloads.

The company also said on Tuesday that iTunes customers are toting up purchases and rentals of more than 50,000 movies per day.

eBay has pulled the plug on Media Marketplace, a controversial pilot program designed to buy and sell radio and TV advertising on the Internet. The Internet auction house confirmed the closure of the program after one year with the brief message: "We have ended our pilot program in this market."

The system got off to a rocky start, receiving little support from the cable network industry and none at all from the broadcast networks, according to a report in AdWeek. The Cabletelevision Advertising Bureau refused to endorse the system, and only a few of its members--notably Oxygen and Ion--participated in the system. Many complained the system commoditized television ad time.

Last October, eBay officials issued a statement saying, "We've been disappointed by the lack of broad engagement by cable networks. This has caused the initial testing to be slower than expected."

While eBay has abandoned its efforts in selling cable TV ads spots, the company has been working with Bid4Spots on a separate service for selling radio ad time. A notice on the Media Marketplace page urges users to go to Bid4Spots.com for service.

Hewlett-Packard said Tuesday that it has chosen a new chief sales officer.

Don Grantham has been chosen to fill the role immediately, and will report to HP's executive vice president of the Technology Solutions Group, Ann Livermore. Enterprise accounts, public sector customers, as well as communications, media and entertainment, financial services, and manufacturing and distribution sales will fall under his purview.

Grantham is a tech industry veteran. He was previously the executive vice president for global sales and service at Sun Microsystems, and before that, held various sales positions at IBM.

He will replace Andy Mattes, who was moved on to become HP's senior vice president and general manager of its outsourcing services business.

Overstock.com has filed a lawsuit challenging a New York law that expands the state's requirements for online retailers to collect sales taxes.

The Utah-based company announced Friday that it is asking the court to issue an injunction and declare the law unconstitutional.

In April, Gov. David Paterson signed a new law requiring companies that pay New York-based entities for "directly or indirectly referring customers" to their retail business to collect sales taxes from New York-based customers. The new law goes into effect Sunday. It's an attempt to get around a 1992 U.S. Supreme Court decision in the Quill v. North Dakota case that says retailers aren't required to collect sales taxes from customers who live in states where the businesses don't have a physical presence.

About two weeks ago, Overstock announced it was cutting ties to its New York-based affiliates because of the new law. The discount online retailer said it told its more than 3,400 affiliates that as of Sunday they would no longer be able to provide advertising for the company.

"I am confident of our position in the suit," said Mark Griffin, Overstock.com general counsel, in a statement. "The applicable United States Supreme Court cases on the question of whether the state can collect taxes under these circumstances make it clear that New York cannot constitutionally require Overstock.com to collect these taxes."

The New York State Department of Taxation and Finance, tax commissioner Robert Menga, and Paterson are named as defendants in the suit filed with the New York State Supreme Court.

Amazon, which filed a similar suit in April, has said it plans to abide by the law and begin collecting New York state sales taxes.

CNET News.com's Anne Broache contributed to this report.

PC maker Lenovo turned in a strong financial performance for its fourth fiscal quarter, with revenue, profits, and PC shipments all seeing notable jumps.

For the quarter that ended March 31, Lenovo said that profits attributable to shareholders grew 133 percent to $140 million from the same period a year ago. That figure includes $36 million in net profit from the sale of discontinued operations (its mobile handset business). Earnings per diluted share hit $1.44, a rise of 112 percent.

Revenue for the three-month period rose 13 percent to $3.7 billion.

China-based Lenovo said that worldwide PC shipments grew 21 percent, ahead of the industry average growth rate.

Notebook PCs outpaced desktops for the quarter, with notebooks making up 61 percent of total sales versus 38 percent for desktops. Notebook shipments were up 38 percent, while desktop shipments were up 9 percent.

The company's Greater China business accounted for 34 percent of total sales during the quarter, while its Americas business accounted for 27 percent, slightly ahead of the percentage for Europe, the Middle East, and Africa. Asia-Pacific sales excluding China accounted for 15 percent of sales.

New York's expansive new online sales-tax requirements are drawing mixed responses from major e-tailers that haven't previously collected such fees in the Empire State.

Despite a pending lawsuit challenging the law's constitutionality, Amazon.com has said on its Web site that it still plans to abide by the law and add sales tax to orders shipped to New York when the mandate kicks in June 1.

But online outlet store Overstock.com wants nothing to do with collecting the new tax, according to reports at the Affiliate Tip blog and The New York Times.

A few weeks ago, New York's governor signed a new law that requires any company that pays New York-based entities for "directly or indirectly referring customers" to its retail business to collect sales taxes from New York-based customers. It's an attempt to get around a 1992 U.S. Supreme Court decision in the Quill v. North Dakota case that says retailers aren't required to collect sales taxes from customers who live in states where the businesses don't have a physical presence.

New York's new law directly implicate Amazon, Overstock, and other companies that operate "affiliate" programs, which, in the e-tailers' cases, means they offer commissions to external Web site owners who link to their products and prompt sales. Amazon has hundreds of thousands of such affiliates, although in its court complaint against New York state, the company said it wasn't sure exactly how many were truly located in New York.

Overstock, for its part, is opting to cut off its 3,400 affiliates in New York, telling the Times that it couldn't afford to deal with collecting sales taxes in the state, although it, like Amazon, believes the new policy is unconstitutional. An e-mail from Overstock's affiliate program manager republished by the blog Affiliate Tip characterized the situation as "temporary."

Reportedly inspired by an ongoing legal skirmish in New York, tax officials in Texas are investigating whether Amazon.com should be collecting sales taxes from the Lone Star State's residents.

According to recent reports in the Dallas Morning News, the Texas Comptroller's office is currently looking into whether the Seattle-based e-tailer can be held responsible for paying as many as four years' worth--potentially millions of dollars--of back taxes. Some Texas officials said they weren't aware that Amazon had been operating a distribution center in Irving, Texas, since 2006, until receiving a call from a Morning News reporter last week.

Amazon, for its part, told the newspaper that the state is "fully aware" of its Texas operations and that the company is already in compliance with the state's tax laws. Amazon said state law doesn't require it to collect taxes on its Texas facility, which is operated by a subsidiary called Amazon.com.kydc, the Morning News reported.

But a spokesman for the Texas Comptroller's Office said it was nevertheless continuing a "thorough" investigation of the matter and wasn't sure how long it would take to complete.

It's just the latest chapter in the broader debate over sales taxes on Internet-based purchases. In 1992, the U.S. Supreme Court ruled in its landmark Quill v. North Dakota case that retailers aren't required to collect sales taxes from customers who live in states where the businesses don't have a physical presence, or "nexus."

So far, nothing has happened to change that decision, though Congress has considered taking steps in that direction, and some states are banding together in a strictly voluntary effort known as the Streamlined Sales Tax Project, which is designed to make tax collection easier for retailers.

Technically, Americans residing in states with sales taxes--Texas included--are already supposed to keep track of out-of-state purchases and cough up the necessary sales tax on April 15 through a concept known as a "use tax."

State officials, however, argue that most Americans don't actually do so, potentially depriving them of millions of dollars in revenue, particularly as e-commerce sales continue to grow. The Dallas Morning News article said Texas officials estimated losing $541 million in uncollected sales taxes in 2006 to online commerce.

Earlier this month, Amazon sued New York state over a new law requiring sales tax collection by companies that pay New York-based entities for "directly or indirectly referring customers" to their businesses. That provision directly implicates Amazon "affiliates" through its "Associates Program," to whom it pays a commission for linking to products for sale on its Web site, and the Internet merchant argued that the law is "invalid, illegal, and unconstitutional."

According to its Web site, Amazon currently collects sales tax on items sold and shipped to the states of Kansas, Kentucky, North Dakota, and Washington. Some of its merchants, such as Target, collect taxes in other states as well.

The fourth edition of Take-Two's franchise video game Grand Theft Auto had a killer first week at retail, beating out even Halo 3. For a gallery about the game, click on the image above.

(Credit: Take-Two Interactive Software)

First-week sales of the video game Grand Theft Auto IV made a killing, knocking off records and blowing away analyst expectations.

Take-Two Interactive Software, the game's publisher, sold 6 million copies and raked in $500 million in its first seven days on the streets, the company announced Wednesday. The game sold 3.6 million copies its first day on the market.

Analysts had expected GTA IV, which has been criticized as excessively violent, to sell 5 million copies during its first two weeks and 9 million copies total. GTA IV's first-week sales beat the previous record held by last year's release of Halo 3, which earned $300 million its first week on the market.

Shares of Take-Two have been trading higher, thanks to the excitement surrounding the game's release. On Tuesday, Take-Two's shares closed at $26.35, up 29 cents. The first-week sales success gives a boost to the game publisher, targeted for a hostile takeover by Electronic Arts in March. Take-Two rejected that offer, calling it "inadequate."

As expected, Amazon.com is hitting back at New York over a new law requiring online retailers to collect sales taxes from customers residing in that state.

In a complaint filed on April 25, Amazon asked the New York State Supreme Court to declare the recently passed law "invalid, illegal, and unconstitutional." (Wired.com, which reported the lawsuit earlier this week, has posted a PDF of the document.)

New York has long required vendors to collect taxes from customers in its state if they "solicit business" there, according to Amazon's complaint. But a few weeks ago, the state passed a new law, as part of its state budget, that expanded the meaning of "solicit" to include any company that pays New York-based entities for "directly or indirectly referring customers" to its retail business, or risk "hefty civil and criminal penalties," Amazon wrote in its complaint.

That expanded definition clearly implicates Amazon, which says it has hundreds of thousands of independent Web site "affiliates" through its "Associates Program" to whom it pays a commission for linking to products for sale on its Web site.

Amazon in its complaint contended that the statute violates the equal protection clause of the U.S. and New York constitutions because it "intentionally targets" the company, noting that some state officials have even described the new policy as the "Amazon tax."

The Seattle-based e-tailer also argues that the statute is unconstitutional because it imposes tax-collection obligations on an out-of-state retailer without a "substantial" physical presence in New York. Amazon, for its part, said it "does not own, lease or otherwise occupy any physical property in the state, and none of its employees works or resides in the state."

A 1992 U.S. Supreme Court decision in the Quill v. North Dakota case currently limits states' ability to collect sales taxes from out-of-state retailers. It says retailers aren't required to collect sales taxes from customers who live in states where the businesses don't have a physical presence, or "nexus." New York's new statute represents one attempt at getting around those limitations.

Technically, of course, Americans in states with sales taxes are supposed to keep track of out-of-state purchases and cough up the necessary sales tax on April 15--a concept known as a "use tax." But state officials argue most Americans don't actually do so, potentially depriving them of millions of dollars in revenue, particularly as e-commerce sales continue to grow.

Amazon also argues that the new statue is "overly broad and vague." The company said it has "no way of knowing" whether affiliates who provide New York addresses are actually legal residents of New York--or whether their particular advertisements "qualif(y) as a direct or indirect solicitation on behalf of Amazon."

The litigation is hardly unexpected. Even Neal Osten, federal affairs counsel for the National Conference of State Legislatures, told CNET News.com recently that his lobby group for state politicians would actually discourage the somewhat unique approach taken by New York because it is "probably going to be litigated and will therefore cause delay" in collecting taxes. Other states are seeking to at least some recover sales taxes potentially lost to Internet purchases by signing up for an as-yet voluntary program known as the streamlined sales tax project.

Amazon's complaint instructs the New York State Department of Taxation to file its response with the court within the next few weeks. A department representative told The New York Times on Thursday that the state won't publicly comment on the lawsuit until that document is filed.