Affected employees were notified this morning, and executives are meeting with remaining staff this afternoon to do damage control.

Slowing consumer and business spending due to the econalypse is the obvious explanation for today’s cuts, though Rhapsody’s struggle to compete with other music services, among them Apple’s (AAPL) iTunes, clearly played a role here as well.

RealNetworks last implemented layoffs in December 2008 when it cut 7.5 percent of its workforce.

UPDATE: A Real spokesperson has confirmed the cuts, noting that the company is “placing greater emphasis on mobile devices and Web platforms and less on editorial and heavy client software.”

Tim Quirk, VP of music programming for Rhapsody, has taken to Twitter to try to drum up some job leads for the folks he just had to let go.

MTV and Harmonix Come Together for Unprecedented Deal

Exclusive Agreement Set to Bring The Beatles Music to Fans for the First Time in Interactive Form Here, There and Everywhere in 2009 …

The Beatles’ extraordinary music and phenomenal legacy is set to rock across the universe in the form of a video game …”

– Excerpts from Apple Corps/MTV Games/Harmonix press release

So those reports that the Beatles’ Apple Corps was in talks with Rock Band developers MTV Networks and Harmonix over the creation of a Beatles-themed videogame? True.

According to a Beatles pun-riddled joint press release from Apple Corps Ltd., MTV and Harmonix this morning (what, no “Everybody’s Got Something to Hide Except for Me and My Monkey”?), the companies have inked an exclusive agreement to develop what they exuberantly describe as “an unprecedented, experiential progression through and celebration of the music and artistry of The Beatles.”

“The project is a fun idea which broadens the appeal of The Beatles and their music,” Beatle Paul McCartney said in a statement. I like people having the opportunity to get to know the music from the inside out.”

“It’s cool,” added Yoko Ono Lennon, perhaps dreaming of a “Rock Plastic Ono Band” edition of the game. “I love it and hope it will keep inspiring and encouraging the young generation for many decades.”

No word yet on how much of the Beatles catalog is involved here–or if it will feature a “Revolution 9″ minigame. But that’s beside the point, really. The fact that the band, which has long refused to distribute its music digitally, has licensed its catalog at all is a triumph for MTV Networks. This is a monumental adjustment in the Apple Corps approach to digital distribution and one that could herald future deals with Apple’s (AAPL) iTunes service (Beatles fan Steve Jobs must be beside himself today), Amazon and others.

Looking five, six, seven, 10 years ahead, advertising will become 15%, 20%, 25% of Microsoft’s business. As much as people have bones to pick with advertising, people much prefer an advertising-funded experience to one they pay for.”

–Microsoft CEO Steve Ballmer

Viacom has a new online advertising partner and–big surprise–it’s not Google. It’s Microsoft.

The entertainment broadcaster has signed a far-reaching, five-year strategic partnership with the world’s largest software company valued at approximately $500 million. Under its terms, Microsoft will buy ads across Viacom’s broadcast and online networks and license content from its MTV, Comedy Central, BET and Paramount Pictures properties for use on the MSN Web site and the Xbox 360.

In return, Viacom will adopt Microsoft’s Atlas AdManager digital-advertising technology and grant Redmond the exclusive right to sell remnant display-advertising inventory on its U.S. sites.

Quite the partnership, and one that may further in evolve in the years ahead. “This broad-based relationship will lead to conversations in other business areas,” Viacom CEO Philippe Dauman told Reuters. “What impressed me was the extent to which Microsoft is making the commitment–technological, financial and otherwise–to be a winner in this space.”

“Financial and otherwise,” indeed. As Om Malik notes, Viacom seems to have gotten itself quite a deal from Microsoft. “Viacom doesn’t have to spend anything and at the same time it is getting advertising dollars and more distribution for their content,” he writes. “I get a feeling that, going forward, this is going to become a template deal for all large media companies with content assets. For them it’s a green light to pillage Microsoft’s overflowing coffers. Deals like this will increase the pressure on Google to do similar ones with other content providers, mostly to thwart Microsoft’s advertising ambitions.”

To keep you abreast of tech news while he’s away, we’re compiling a daily digest of 10 must-read tech stories. Our Tech 10 appears below.

1. Coming to a PDF Near You: Adobe announced today that it is teaming with Yahoo to put text-based ads in PDF files, reports The Wall Street Journal, noting that publishers will be paid for running ads from Yahoo Inc. next to the PDFs.
2. But Will It Be Able to Leap Tall Buildings in a Single Bound? The new and improved version of Apple’s iPhone will be able to download from the Internet at a faster rate, AT&T CEO Randall Stephenson announced last night, Bloomberg reports. Speaking to the Churchill Club in Santa Clara, Calif., Stephenson also divulged that the new iteration of the device will debut next year and will operate on third-generation wireless networks. (AT&T is the exclusive carrier for the iPhone in the U.S.)
3. Nothing’s Set in Concrete, After All: Responding to criticism from MoveOn, Facebook execs are looking into changes to the recently launched Beacon advertising tool, according to BusinessWeek, adding that adjustments to the system could come as early as today.
4. Democracy Comes to Search Results: Google is experimenting with a system that enables users to change the rankings of or delete sites in personalized searches, according to Loren Baker of Search Engine Journal, explaining that the new system will allow users to manipulate search results by simply hitting dedicated buttons.
5. Reining In Comcast: Federal Communications Commission Chairman Kevin Martin is proposing a rule to keep cable colossus Comcast from growing larger, the New York Times is reporting, adding that the new rule comes as Martin attempts to regain the upper hand after his earlier proposal to broadly control the cable industry was shot down.
6. The Faster the Better: Verizon Wireless will upgrade its network in 2008, according to Reuters, using long-term evolution technology to achieve higher speeds. The new system could end up challenging Qualcomm, which developed the CDMA technology Verizon’s current network is based on, as well as supporters of WiMax.
7. Strike This Strike? ABC and the Writers Guild of America, East, announced today that they had come to a tentative agreement for about 250 ABC News writers, editors, graphic artists and desk assistants in New York and Washington, D.C., according to the Hollywood Reporter. The union, which has worked without a contract since Jan. 31, 2005, will vote on the new agreement Dec. 13.



8. Cartman, Kyle and Kenny–Free: Following the online popularity of “The Daily Show With Jon Stewart,” MTV Networks will make all episodes of the animated comedy “South Park” available for free in 2008 according to Reuters, noting that the move is part of Viacom’s strategy to boost TV viewership.
9. Just When You Thought Things Couldn’t Get Any Worse: Along comes Warner Music Group’s gloomy forecast for 2008. In today’s fourth-quarter earnings call, CEO Edgar Bronfman Jr. predicts a continuing decline in physical music sales as retailers cut back on shelf space, while the digital-music and mobile sales growth will be slower than expected, reports Peter Kafka of Silicon Alley Insider.
10. No Wii? Waaaaa! The popularity of Nintendo’s gaming console coupled with “a maxed-out supply chain that can’t be ramped up to meet holiday demands” means it could be next to impossible to purchase a Wii before Christmas at retail stores, explains Chris Kohler at Wired.

–posted by Associate Editor John Sullivan

To keep you abreast of tech news while he’s away, we’re compiling a daily digest of 10 must-read tech stories. We’re calling it the Tech 10 and it appears below.

1. Getting to know you: Facebook is developing targeted ads based on the information that users of the social-networking site reveal about themselves. Quoting anonymous sources at the company, The Wall Street Journal says the advertising system is at an early, changeable stage, but Facebook hopes to launch a basic version late this fall.
2. It looks like Apple will turbocharge its iPods with the Mac OS. According to AppleInsider, the upgraded digital music players will debut at a media event next month and are part of the computer maker’s master plan to create devices around its legendary operating-system software.
3. Dude, where’s my YouTube? Initial response to ads overlaid on downloaded videos from the popular online site is overwhelmingly negative, Computerworld reports, noting that the comments on a YouTube feedback blog could be summarized by the one-word review of a user from Oro Valley, Ariz.: “Yuck.”
4. Hoping to shore up anemic sales of its PlayStation consoles in the face of competition from Microsoft and Nintendo, Sony said it will market a recording-transfer device (pictured here) in Europe enabling users to record TV programs on their PlayStation 3 video-game consoles for transfer to the PlayStation Portable. According to the Associated Press, the new gadget, dubbed PlayTV, will give game consumers an additional function for their PlayStations beyond playing video games.
5. Too hot to handle? Microsoft announced that it’s offering a free retrofit to the Xbox 360 Wireless Racing Wheel after reports from a number of users that smoke issued from the device when used on AC/DC power, according to PC World. The retrofit comes six weeks after it extended the Xbox warranty for “flashing lights of death” failures–and took an earnings hit of $1.15 billion for the anticipated repair bill.
6. Paper trail, indeed. Many iPhone customers are irked over the book-sized bills they are getting from wireless provider AT&T, reports the New York Times. The bills itemize all phone calls, as well as every text message and online data transfer. In response, AT&T announced that beginning Sept. 28, customers would get summarized bills removing the wireless detail.
7. Microsoft and Nokia won’t sit back and watch while the iPhone marches through Europe, apparently. The companies are joining forces to put Windows Live services on selected Nokia S60 handhelds, reports IDG News Service. Customers in 9 countries in Europe and two in the Middle East will be first to get the services, including Hotmail and Live Messenger. A Microsoft spokesman couldn’t say when the functions would be available for cellphones in the United States, however.
8. Speaking of teaming up, MTV and MySpace are collaborating on a series of one-on-one dialogues with the major Democratic and Republican presidential candidates. CNNMoney.com reports that the hourlong events will be streamed live on MTV.com and MySpaceTV throughout the fall on college campuses.
9. Palm’s Foleo computer, first exhibited at this year’s D Conference, is having trouble leaving the gate, writes Tech Trader Daily, quoting a Deutsche Bank analyst who disclosed that the debut in stores of the stripped-down laptop scheduled for this week “was delayed after software bugs were detected. … Palm now expects the device will ship in late September/early October.”
10. Playboy Enterprises is, uh, unveiling Playboy U, a social-networking site targeted exclusively at college students. The move online by the granddaddy of the skin rags, says the Associated Press, is an attempt to capitalize on the Playboy brand as the 54-year-old magazine continues to lose money and readers. The site is modeled after Facebook and MySpace, with users allowed to “friend” other college students. Although there will be no nudie shots, users will be able to discourse on such topics as how many sex partners they’ve had or what they think of penis enlargement.

–posted by Associate Editor John Sullivan

To keep you abreast of tech news while he’s away, we’re compiling a daily digest of 10 must-read tech stories. We’re calling it the Tech 10 and it appears below.

1. Retailing behemoth Wal-Mart will sell digital-music downloads on its Web site without copy protection, Reuters reports. The so-called digital-rights management software insisted on by some record labels can stymie where the average user plays the songs.
2. Taking on the juggernaut of iTunes, MTV and RealNetworks are forming an online digital music venture called Rhapsody America. According to The Wall Street Journal, Verizon Wireless has signed on as mobile distributor of the joint content.
3. Adobe Systems’ warhorse Flash Player is getting a makeover named “Moviestar.” The update, says InfoWorld’s Paul Krill, will bring high-definition video technology to downloads, affording clearer and smoother playback of images.
4. Increasingly popular online video site Metacafe got a shot in the arm in the form of $30 million in financing. VentureBeat reports that the latest cash infusion was led by new investors Highland Capital Partners and DAG Ventures.
5. Acknowledging it did bad (though not evil), Google announced last night that it would make credit-card refunds, rather than Google Checkout credits, to those owed after the company terminated its download-to-own/rent service of Google Videos. PC Magazine disclosed that the search giant will also allow users an additional six months to watch the videos they have already downloaded.
6. Fretting over security and productivity concerns, half of all companies in a recent survey are blocking employees’ access to Facebook. The poll of 600 workers by online security firm Sophos also found that two-thirds of all employees believe their colleagues are revealing too much information on the social-networking site, exposing them to cybercriminals bent on data theft and their companies to network hackers.
7. Bebo, the U.K.-centric social-networking site, has announced a partnership with Microsoft on a new instant-messaging service. According to Webware, the Windows Live Messenger hookup is only that–and not a signal of any impending acquisition.
8. Joining the social-networking parade, online business network CollectiveX has launched Groupsites. According to Michael Arrington of TechCrunch, the new product opens up the buttoned-down service to allow users to create social profiles as well.
9. Upping the ante in the competition for giving laptop users more memory, Toshiba announced today that it will release a 320-gigabyte hard drive for its laptops by the end of the year. According to IDG News Service, for users of multimedia laptops–where storing video is paramount–the extra space will come as a welcome feature.



10. In a bow to color choice and the sexes, researchers have found that there’s truth in the the time-honored (if sexist) adage that girls like pink, boys like blue. Reporting on a study from two scientists at Newcastle University, the Independent did not confirm whether the findings were borne out in colors chosen by men and women for iPod skins.

–posted by Associate Editor John Sullivan

To keep you abreast of tech news while he’s away, we’re compiling a daily digest of 10 must-read tech stories. We’re calling it the Tech 10 and it will appear in Digital Daily.

1. Dell says it will restate financial results after an internal audit finds evidence of irregularities going back several years. The adjustment will reduce the company’s profit by $50 million to $150 million.



2. Though some Skype users report being able to log on after a major outage yesterday, many users of the VOIP service remain in connectivity limbo as the company struggles to resolve what is presumed to be a software problem.
3. Despite the lingering hangover from its board-leak counterintelligence scandal, Hewlett-Packard reports robust third-quarter earnings, based largely on lower computer-component costs.
4. Computer rivals IBM and Sun Microsystems will collaborate on server technologies. The move means Sun’s Solaris operating system will be able to run on Big Blue’s servers.
5. Sprint announces it will spend $5 billion on its upcoming WiMax service dubbed (somewhat unpronounceably) “Xohm.”
6. Crying patent infringement, Nokia wants U.S. authorities to halt imports of Qualcomm’s chips and the cellphones they’re used in. The world’s largest cellphone maker is in a legal fray with Qualcomm since a deal over patents expired on April 9. Meanwhile, Nokia has warned its handset users that defective batteries pose a potential danger, offering to replace them in a voluntary program.
7. Strong sales of its Mac and iPhone are giving Apple renewed momentum, says RBC Capital’s Mike Abramsky, who maintains that shares of the computer-maker’s stock could eventually hit $175.
8. MTV Networks will pump $500 million into video-game development based on the network’s range of shows over the next two years. The investment comes as the traditional media company attempts to gain a toehold in the $30 billion global games market.
9. It looks like there’s upheaval at Technorati. The blog-search service is reportedly laying off eight people, and CEO David Sifry is resigning.



10. Today marks the 25th anniversary of the compact disc, the format that triggered a revolution in the recording industry and one that remains the principal means for consumers to listen to music, despite the growing popularity of digital downloading.

–posted by Associate Editor John Sullivan

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