News : Robot festival in Tokyo

An international robot exhibition in Tokyo showcases the changing face of robotics.

Chris Meyers reports.

News : British Library's new time machine

Reuters Television has an exclusive first look at the high-density, oxygen-controlled facility built to house seven million items from the UK's national library's collection.

SOUNDBITES: Steve Morris, Director of Finance and Corporate Services, British Library

Alison Stephenson, Library worker

Matt Cowan, Reuters

News : Weird, wild creatures of the deep

A far-reaching global marine census is shining a light on the previously undiscovered life inhabiting the darkest and most remote regions of Earth - the oceans.

Ben Gruber reports.

News : "Big Bang" collider sets particle beam record

By Robert Evans

GENEVA (Reuters) - The "Big Bang" experiment at CERN near Geneva scored a world record on Monday by accelerating beams to the highest energy ever achieved in a particle collider, the research center announced.

Scientists at CERN, the European Organization for Nuclear Research, said the achievement marked a major milestone on the way to tests next year which they hope will unlock secrets of the origins and make-up of the universe.

The energy of the twin beams circulated around 27-km tunnels deep underground went, at 1.18 trillion electric volts (TeV), well past the previous highest -- just under 1 TeV -- in a collider at the U.S. Fermi National Accelerator Laboratory.

The achievement in the Large Hadron Collider (LHC) came 10 days after the world's largest scientific experiment was restarted following an accident soon after its launch in September 2008.

"We are still coming to terms with just how smooth the LHC commissioning is going," said CERN Director General Rolf Heuer as the record was announced. "It is fantastic."

The beam energy now achieved in the LHC -- a vast complex of huge magnets, electronics and computers costing some $10 billion underground on the Franco-Swiss border -- leaves some way to go before the real "Big Bang" experiments can begin.

The object of these is to smash particles together at a force of some 7 TeV and create conditions one billionth of a second after the explosion 13.7 billion years ago that shaped the universe and everything in it.

Data gathered when those collisions occur will be recorded and analyzed by a network of 10,000 researchers not just at CERN at the foot of the French Jura mountains but also in some 30 countries around the world.

Scientists hope to learn how matter, and what is called anti-matter, was created and whether the so-called "Higgs Boson" -- which Scottish physicist Peter Higgs suggests helped matter come together -- actually exists.

But despite the rapid and seamless progress since the first beams were injected into the repaired LHC on November 20, leaders of the project remained cautious about the moment when they will start what they call "first physics."

Said Heuer: "We are continuing to take it step by step, and there is a lot to do before we start physics in 2010. I'm keeping my champagne on ice until then."

Over the next few weeks, scientists will move into a commissioning phase aimed at slowly increasing the beam intensity and producing good quality collision data that the monitoring machines can test their capacities on.

The first major collisions at 7 TeV are due to take place some time in the first quarter of next year, CERN says.

(Editing by Janet Lawrence)

News : Shoppers already whetting holiday appetite online

By Alexandria Sage

SAN FRANCISCO (Reuters) - Holiday shopping online hit a record for Black Friday, several days before the retail industry-coined Cyber Monday gets underway, as more consumers said they used the web to seek deals.

The strong start for web retailers should continue into what is otherwise expected to be a lackluster holiday season, benefiting Amazon.com, Wal-Mart Stores Inc's online unit and Google Inc, analysts said.

Analytics firm comScore said Sunday that U.S. online spending on Black Friday was the strongest it has ever been, up 11 percent over the prior year, with $595 million spent online.

Sales at retail stores rose 0.5 percent to $10.66 billion on that day, the official kick-off to holiday shopping, according to ShopperTrak.

"That's pretty significant in a recessionary environment -- to get a record like that and be that far ahead," said comScore Chairman Gian Fulgoni. "I still expect Monday should be a much bigger day online than Black Friday."

Cyber Monday is the day when many consumers head back to work after the U.S. Thanksgiving weekend and use fast Internet connections to make holiday purchases, away from the prying eyes of spouses and children. The day has always spurred a flood of special online offers, but this year more are showing up even earlier, experts said.

Forrester analyst Sucharita Mulpuru said she was not surprised by the online strength over the holiday weekend.

"I anticipate this momentum to continue for the next several weeks," Mulpuru said. "It's a good sign. It shouldn't slow down significantly from here."

Forrester Research has estimated that U.S. online sales in November and December should rise 8 percent this year, up from a 5 percent rise in the year-ago period. ComScore has forecast a 3 percent rise for the period.

AFTER BLACK FRIDAY, THE REST IS ONLINE

Yolanda and Victor Rebagliati were shopping at a San Francisco Old Navy store when it opened Sunday morning for some $5 clothing deals, but said they next planned to head online for an iPod from Apple Inc and a netbook.

"After today, the rest is online!" said Yolanda.

Experts say bargain hunting is driving the online strength. Searches for "Black Friday ads" on Thanksgiving and Black Friday were up 50 percent from the prior year, while those for "Target Black Friday and Walmart Black Friday" were up more than 75 percent in the same period, according to Google Insights for Search.

Online retailers Walmart.com and Amazon have spurred an online price war, and rivals are anxious to keep up, with web deals and free shipping offers advertised from Kohl's Corp, Toys R Us and Best Buy Co Inc.

Jefferies analyst Youssef Squali wrote in a recent note that Amazon and Google are the biggest likely beneficiaries of the online holiday season -- the retailer with its value-priced goods and the search giant that drives traffic to bargains.

Experian Hitwise, which measures traffic to websites, said on Sunday that Amazon was the top visited retail site on Black Friday for the second year in a row -- followed by Wal-Mart and Target Corp.

While retail experts say there is little to inspire a consumer to enter stores in the weeks leading up to Christmas, there is room to rise for online sales.

Fulgoni said he noticed more online deals offered on Black Friday this year than last.

"It looks like the retailers figured out that there is no reason for them to leave these deals to Cyber Monday," he said. "Everyone is well tuned to the fact that there is a consumer strapped for cash and you have to attract their attention."

Last year, online spending on Cyber Monday rose 15 percent to $846 million, according to comScore.

A savvier consumer that recognizes that some doorbuster deals offered by retailers in stores won't last long due to lower inventory levels this year could also be driving sales.

"If you didn't get it at 6 a.m. (in stores) you can probably get it at 9 a.m. on Macys.com," said Amanda Pires, a spokeswoman for eBay Inc online payments unit PayPal, which found that Black Friday payment volume rose 20 percent, with a 25 percent gain on Thanksgiving.

"There were some great Black Friday deals and people were out early to get them," Pires said. "That mentality has spilled over into the online world."

(Reporting by Alexandria Sage; Editing by Diane Craft

News : Black Friday Web shopping up 11 pct

SAN FRANCISCO (Reuters) - Holiday shoppers in the United States spent some $595 million online on Black Friday, up 11 percent from last year, with Amazon.com and Walmart.com the most visited sites, according to analytics firm comScore.

Visits to Amazon.com (AMZN.O) rose 28 percent, followed by the online unit of Wal-Mart Stores Inc (WMT.N), which grew 22 percent. The two companies have already engaged in a heated battle for market share this holiday, with each lowering prices on select merchandise.

Since November 1, some $10.57 billion has been spent online in the United States for the holiday season, representing a 3 percent gain, according to comScore (SCOR.O).

"This is a very encouraging start," said comScore Chairman Gian Fulgoni in a statement.

Earlier this week, the company said it expects total holiday e-commerce spending to rise 3 percent to $28.8 billion from $28 billion in the previous season when shoppers sharply curtailed spending amid the global financial meltdown.

The robust Web sales on Black Friday speak to retailers' attractive discounts online even on a weekend known for driving shoppers to brick-and-mortar stores, said Fulgoni.

"While this acceleration in spending suggests the online holiday season may be shaping up slightly more optimistically than anticipated, it may also reflect the heavy discounting and creative promotions being put forth by retailers that now encompass the use of social networks such as Facebook and Twitter," said Fulgoni.

Cyber Monday is the day considered the kick-off to the online spending season, when consumers return to work from the long Thanksgiving weekend and use their employers' fast Internet connections to purchase online.

(Reporting by Alexandria Sage, editing by Matthew Lewis)

News : Churchill and Roosevelt chit-chat

Statues of Sir Winston Churchill and Franklin D. Roosevelt are brought to life in London's West End to promote the release of 'Night at the Museum 2' on DVD.

Churchill can be heard complaining bitterly about the pigeons, parodying his famous "We shall never surrender" speech before the House of Commons during the Second World War in June 1940.

A team of digital artists spent two months planning the stunt which uses a series of light projections to give the impression that the statues' eyes and mouths were moving

News : Hi-tech holy water controls H1N1

Italian worshippers use an electronic holy water dispenser to help prevent the spread of swine flu at a church at Capriano Briosco, about 50 kilometres north of Milan.

Matthew Stock reports.

News : FDA tackles gray area of social media

By Deepa Seetharaman

WASHINGTON (Reuters)- Drug makers, Internet companies and nonprofits called for clarity on what is a gray area for U.S. health regulators: how drug promotion on Twitter, Wikipedia, blogs and other social media can be regulated.

The two-day Food and Drug Administration hearing aims to find out if the agency needs to specifically regulate how drugs and medical devices it oversees are promoted on the Internet.

"The lack of clarity today is creating confusion among the advertising community," said David Zinman, vice president at Yahoo Inc.

The FDA already has strict rules governing what drug makers can say in magazine, newspaper and television advertisements, but the fast-evolving online world is a Wild West when it comes to what is -- and is not -- possible to regulate.

In April, the FDA sent warning letters to 14 companies including Eli Lilly and Co and Merck & Co Inc about their drug marketing online, saying that ads for certain products were misleading and did not contain any risk information.

Since those letters, pharmaceutical companies have changed the way they design their ads and no longer include the brand name, Google Inc and Yahoo representatives said.

Google officials said the click-through rate on these ads "dramatically decreased" after April. They offered another ad design that offers consumers links to risk information.

"Users see all these links and they don't know exactly where they're going until they get there," Zinman said.

TACKLING TRICKY QUESTIONS

More than 800 people tried to register for the event, which was held in a conference room that seats 350. Others followed the speeches online and posted messages about it on Twitter.

The FDA organized about 30 different presentations on Thursday on topics ranging from drug makers' role in monitoring Internet content to data on how consumers get their health news.

Participants were asked to consider a number of questions, including how much responsibility drug makers bear for online content about their products and how to determine when online chats about a medicine are influenced by the manufacturer.

"We don't think companies should be responsible for policing the entire Internet for information about their products," said Johnson & Johnson executive Elizabeth Forminard.

One advocate noted there is a general lack of consistency about the quality of information on frequently-used third-party websites, such as Wikipedia.

"Because the risk of providing inaccurate information on medical products is so high, the FDA needs to establish ongoing relationships with ... websites consumers are relying on," Diana Zuckerman, president of the National Research Center for Women and Families, said in her remarks.

Thomas Abrams, director of FDA's drug marketing arm, is one of a dozen FDA officials who will analyze the public comments to decide what action, if any, the agency needs to take.

The agency is accepting comments through February 2010.

The FDA is webcasting the hearing at: here

(Reporting by Deepa Seetharaman; editing by Tim Dobbyn and Andre Grenon)

News : Dell to introduce smartphone based on Android

NEW YORK (Reuters) - Dell Inc said on Friday it will sell smartphones equipped with Google Inc's Android mobile software, as the computer maker enters a market that is growing fast but crowded with competitors.

Dell plans to sell its new Mini 3 smartphones through Claro, part of the America Movil network, and China Mobil.

Details on the phones will be announced when the devices are available in stores late in November for China Mobile and around the end of the year for Claro, it said.

A source had said in October that Dell plans to launch an Android-based smartphone in the United States on AT&T's network.

Dell's announcement on Friday did not mention when the Round Rock, Texas-based company will sell the phones in the United States.

Dell becomes the latest tech manufacturer to bet on the fast-growing market dominated by Apple Inc's iPhone and Research in Motion's BlackBerry.

Worldwide factory shipments of smartphones are expected to rise to 235.6 million units in 2010, up 27.9 percent from 184.2 million in 2009, according to iSuppli.

Dell's phone would also boost Google's fledgling mobile platform, which vies with Apple's and Microsoft's platforms.

Hapoalim Securities USA analyst Kevin Hunt said that it was tough to see how Dell could have any advantage over established phone makers using Android, including HTC Corp, Motorola Inc and Samsung Electronics.

"They could have modest success. I wouldn't see it being a big driver," Hunt said, also noting that Dell is unlikely to make much higher margins in phones than it does in computers.

(Reporting by Ritsuko Ando, Franklin Paul and Sinead Carew; Editing by Derek Caney)

News : Facebook provides alibi for robbery suspect

NEW YORK (Reuters) - A 19-year-old New York man who was arrested for armed robbery has been exonerated thanks to a status update he posted on social networking site Facebook.

Rodney Bradford was arrested and held for 12 days in connection with an October 17 armed robbery of two people in the Brooklyn housing project where he lives, prosecutors said.

But he insisted he was in Manhattan at the time of the crime -- a claim he backed up by an update he made to his Facebook page from a computer in his father's Manhattan building, prosecutors said.

A spokesman at the Brooklyn District Attorney's office acknowledged that Facebook played a role in the dismissal of charges.

(Reporting by Edith Honan; Editing by Michelle Nichols)

News : Israeli companies tackle water leaks

Israeli companies are making water thrift easier, with a drone that reads water meters and a turbine that generates electricity from inside pipes. The innovations will be unveiled at a conference in Tel Aviv next month.

Stuart McDill reports

News : Call of Duty guns for record sales

Despite a difficult economic climate, the first-person shooter video game "Call of Duty: Modern Warfare" has been selling briskly after receiving a record number of preorders.
Matt Cowan reports.

News : Can Apple take Microsoft's perch atop tech pile?

By Gabriel Madway - Analysis

SAN FRANCISCO (Reuters) - Apple Inc's (AAPL.O) phoenix-like rise from the ashes has propelled its market value to $180 billion, raising the possibility that it could challenge Microsoft Corp (MSFT.O) for the technology crown.

Microsoft is now the world's most valuable tech company with a commanding market capitalization of $250 billion. Its Windows software is in nine out of 10 personal computers.

It would take impressive execution for any company to unseat Microsoft at the top of the technology heap. But Apple, flush with cash and fat margins, has catalysts in the iPhone, the Mac PC and a highly anticipated but unconfirmed tablet device expected to launch next year, analysts and investors say.

"Apple's revenue growth continues to outpace, driven by market-changing innovation and sticky software offerings that lead to repeat purchases," said David Dillon, a portfolio manager at HighMark Capital Management, which owns both Apple and Microsoft shares.

He said Microsoft is more of a value-based play, with "a strong product cycle coming with Windows 7."

Apple's revenue is still far smaller than that of its arch nemesis, but it is growing at a more rapid rate. Apple's annual revenue has more than doubled since 2005 to $36.5 billion, with earnings per share up more than four-fold to $6.29.

Over the same period, Microsoft's revenue has risen 47 percent to $58.4 billion, with EPS up 45 percent to $1.62.

Barton Hooper, an analyst with Weitz Funds, which owns shares of Microsoft but not Apple, called the giant software company a "moderate growth story" with a strong balance sheet.

"The rate of growth of Microsoft isn't happening nearly as fast as it is for Apple," he said. But he noted that Microsoft still has solid growth drivers, such as the corporate PC refresh cycle and its server and tools business.

Apple trades at around 24 times forward earnings estimates, as does Google Inc (GOOG.O), which has a similar market capitalization and is viewed as another potential challenger to Microsoft. Microsoft trades at roughly 16 times forward earnings.

(For a comparison of the companies' performance since 2005, see here)

THE REBIRTH OF APPLE

Apple's last quarterly results blew past Wall Street estimates and sent its shares to a record-high $208.71.

While the stock has retreated in recent weeks in a broad market pullback, analysts have a price target as high as $280 on Apple, which would give it a market value of $250 billion.

Following its quarterly report last month, analysts also boosted their price targets on Microsoft to as high as $36, which would take its market cap to $320 billion.

Apple is now visible in Microsoft's rearview mirror, but a decade ago the picture was far different.

Both companies were born in the 1970s at the dawn of the personal computer era. But by the late 1990s, Apple was struggling with annual losses, management turmoil and layoffs as the company worked to improve its operating system. Meanwhile, Microsoft was at the height of its dominance.

In 1997, after years of legal wrangling, Microsoft invested $150 million in Apple -- which angered some of the Apple faithful, but which sent Apple shares up more than 30 percent.

At the end of 1998, Microsoft was the most valuable company in the world with a market cap of around $270 billion, according to an annual ranking compiled by the Financial Times. Apple was scarcely on the radar, valued at roughly $5 billion.

But after the return of Steve Jobs, Apple's fortunes began to improve. The company branched into consumer electronics and entertainment, and the phenomenal success of the iPod, iTunes and, in the last two years, the iPhone has remade Apple into a leading light of the technology world.

Erick Maronak, chief investment officer for the Victory Large Cap Growth Fund, said he would not be surprised to see Apple's market cap approach Microsoft's in the next two years, though he also likes the software company's growth prospects.

"The biggest overriding reason why the company still has room to run is that its business is growing ... The day they introduce the tablet, that's going to drive a lot of earnings," said Maronak, whose fund owns shares in both companies.

Apple's shareholders have been handsomely rewarded over the past decade, with its stock up close to 900 percent. Over the same period, Microsoft's shares have fallen around 35 percent.

Investors and analysts repeatedly point to Apple's robust cash generation -- perhaps even more than its track record for innovation -- as a reason for the stock's rich valuation.

Apple's cash flow from operations was $3.1 billion in its most recent quarter, and it sits on a war chest of $34 billion in cash and marketable securities, with no debt, the equivalent of around $37 a share in cash.

Low interest rates and conservative tax decisions on offshore cash have helped to "collectively understate Apple's reported earnings power relative to its peers," according to a research note by Sanford Bernstein analyst Toni Sacconaghi.

"We believe on a cash flow basis the stock remains attractively valued and that earnings estimates are likely to continue to increase going forward," he wrote.

(Reporting by Gabriel Madway, editing by Tiffany Wu and Gerald E. McCormick)

News : Google consulting with DOJ on books deal

SAN FRANCISCO (Reuters) - Google Inc and a group representing authors and publishers said they are in talks with the U.S. government over modifications to a controversial electronic books licensing deal and they plan to file an amended version of the plan with the court on Friday.

The parties have been in discussions with the Department of Justice prior to and following a hearing last month, the parties said in a letter to U.S. District Court Judge Denny Chin on Monday.

"We met with the Department as recently as this past Friday, November 6," the letter said.

Google and the parties agreed to revise the settlement in the face of widespread criticism from competitors and regulators. The U.S. Department of Justice had indicated in a court filing that there was a significant chance the deal as written would not pass antitrust muster and could break copyright law.

The settlement is an effort to resolve a 2005 lawsuit brought by the Authors Guild and others against Google's effort to scan libraries full of books. In that suit, authors and publishers accused Google of copyright infringement.

Google and the authors and publishers groups had been expected to file the revised settlement on Monday.

The proposed settlement, which was reached last October, would establish a registry to pay authors for works in Google's book search.

Under the terms of the settlement, Google will pay $125 million to create a Book Rights Registry, where authors and publishers register works and are paid for books and other publications the search giant would put online.

The case is Authors Guild et al v Google Inc 05-08136 in U.S. District Court for the Southern District of New York (Manhattan)

(Reporting by Alexei Oreskovic and Diane Bartz; editing by Gary Hill and Andre Grenon)

News : LinkedIn and Twitter link up

SAN FRANCISCO (Reuters) - LinkedIn and Twitter have linked up. Starting immediately, users of LinkedIn and Twitter can cross-file to each other's services, by checking a box on either Twitter or LinkedIn.

LinkedIn is the largest professional social network, with 50 million members around the world who post information about themselves, such as resumes, to help find jobs or employees, and to stay in touch with each other.

Twitter allows people to broadcast short messages up to 140 characters to subscribers, who are called "followers."

LinkedIn also has an update box, which happens to be 140 characters.

Allen Blue, a co-founder of Twitter who is its vice president of product strategy, said LinkedIn members would be able to automatically post recent Tweets if they wanted.

Blue said users will have the option of sending only selected materials to Twitter.

He said that in addition to the obvious advantage of increasing the audience for either tweets or LinkedIn information there were two other advantages to the new system.

Twitter "wants to take advantage of the strong identity in LinkedIn to make those professional tweeters more successful." While anyone may sign up for a Twitter account without revealing their real identity, LinkedIn is based on the social networking idea that people put their identities on the Web.

Second, LinkedIn users who cross-post will be speaking both to their followers and to the broader Twitter audience that searches for tweets by keywords, location, user and the most current, Blue said.

Both companies are privately held.

(Reporting by David Lawsky; editing by Carol Bishopric)

News : Eager fans greet Call of Duty launch

By Gabriel Madway and Robert MacMillan

SAN FRANCISCO/NEW YORK (Reuters) - Activision Blizzard Inc's hugely anticipated "Call of Duty: Modern Warfare 2" videogame went on sale early Tuesday morning, welcomed by eager fans who lined up hours in advance of the release.

The first-person shooter game is set to be one of the biggest and fastest-selling titles in history, challenging records set by blockbuster releases from the "Grand Theft Auto" series.

This despite a dicey economic climate that is pinching consumer spending. Videogame industry revenue in the United States, the world's largest market, is down 13 percent this year, according to industry tracker NPD.

But Call of Duty arrives amid high expectations and plenty of hype. Activision partnered with retailers including GameStop Corp and Best Buy Co for more than 10,000 midnight store openings in North America.

At the GameStop store near Union Square in New York City, around 80 mainly young people were lined up Monday night ahead of the launch, some for two hours.

"This is the only game I'm probably going to do this for," said Paola Altamirano, 21, who was waiting in the queue. She said she planned to play Call of Duty against another friend online later that night.

With what Activision called a record level of preorders, there was little doubt about the strong demand for a game.

"Gamers are enthusiastic about picking this stuff up at midnight," said Paul Swiderski, who works at the Union Square Gamestop.

Analysts' sales estimates for the $60 game range from 11-13 million units by the end of 2009. Call of Duty is likely to account for a sizable chunk of Activision's profits in the fourth quarter, analysts say, so there is plenty at stake in the launch.

HARD-CORE AUDIENCE

The audience for the latest Call of Duty -- the sixth installment in the franchise -- is primarily younger men, the gaming demographic that makes up the core of the estimated $50 billion global industry.

John Paneto, 20, was lined up outside a Best Buy store in San Francisco with about 10 others at around 10 P.M. Monday. He said he played a number of the other games in the Call of Duty franchise.

"I'm going to be up all night playing it, until I crash," he said.

Analysts say so-called hard-core gamers are unlikely to be dissuaded from buying a big-name title by economic concerns, as some casual gamers are.

But Call of Duty will have to turn in an impressive performance to top that of last year's mega-hit from Take-Two Interactive Software Inc, "Grand Theft Auto IV." The title sold 3.6 million units on the first day, and 6 million in its first week or more than $500 million in sales.

Key to Call of Duty's success will be its international performance. Analysts say shooter titles are mainly popular in the United States and Britain.

And the game is facing little competition from other big-name titles. Industry watchers say Activision's rivals either pushed up the dates of their key releases or decided to delay them into next year.

Santa Monica, California-based Activision's stock, up more than 30 percent this year, closed up 2.6 percent at $11.54 on the Nasdaq on Monday.

(Reporting by Gabriel Madway in San Francisco, with Robert MacMillan and Franklin Paul in New York; Editing by David Holmes)

News : Playfish sees social games as industry driver

By Matt Cowan

LONDON (Reuters) - The video games sector has yet to gain from a downturn where consumers stay home to play, but social games creator Playfish says the industry is just beginning a new growth spurt.

The company that invented Pet Society, Restaurant City and Who Has The Biggest Brain? -- games played by tens of millions on sites such as Facebook and MySpace -- believes the $50 billion industry has many more converts to win.

Two-year-old startup Playfish makes games for people to play on ordinary computers with their family and friends, unlike traditional video games that need dedicated consoles.

The London-headquartered company is backed by Accel Partners and Index Ventures, and is already profitable -- thanks to the virtual goods such as clothes, furnishings and weapons it sells for real money within its games.

"What social gaming allows us to do is to grow the aggregate size of the industry... by getting those people who are not so interested in slaying the monsters on their 42 inch plasma screen but are really interested in playing with their friends and family involved," said Chief Executive Kristian Segerstrale.

The video games industry is facing crunch time this December holiday season, with publishers and console makers pinning their hopes on a slew of big games releases to make up for sales that have fallen 13 percent this year so far in the United States.

Price cuts in recent months for Sony's PlayStation 3, Microsoft's Xbox and the Nintendo Wii failed to have a dramatic effect on sales of games.

Nintendo, whose Wii console brought video gaming to millions of new, casual gamers, lost its leading position in the gaming market last quarter and slashed its full-year earnings forecast last week after a 52 percent drop in quarterly profit.

Segerstrale believes, however, that engaging non-traditional gamers to play within their existing social networks represents the next paradigm shift in the industry.

"The video-gaming market is in the middle of this fundamental tectonic-plate shift, away from being a physical product-driven industry to being a digital service-driven industry," he told Reuters Television in an interview (here)

Segerstrale expects video games giants such as Electronic Arts or Activision Blizzard as well as startups to benefit. EA has been rumored to be about to buy Playfish, but Segerstrale has said the company is not for sale.

Playfish said it is owned by its founders, management, staff and outside investors including Index and Accel.

Pet Society, in which players custom-design virtual pets who then interact with their creators as well as other pets in the game, has more than 20 million active Facebook users per month.

With this many users, even micropayments of just a few cents for a virtual item soon add up. Playfish sold 4 million bouquets of flowers in Pet Society during Valentine's week this year.

Media executives skeptical of Playfish's ability to make serious money out of virtual goods asked Segerstrale at an industry conference last week how far he expected to be able to take it.

"We have barely scratched the surface of what's possible in getting people to pay for things that don't exist," he replied.

(Writing by Georgina Prodhan; Editing by Hans Peters)

News : Yahoo teams with OneRiot on real-time search

SAN FRANCISCO (Reuters) - Yahoo Inc, looking to match rivals in providing up-to-the-minute Internet search results, is running tests with several real-time search partners, sources familiar with the matter said on Tuesday.

Among the companies providing real-time results to Yahoo on a trial basis is OneRiot, whose data will be available initially to about 10 percent of Yahoo's users, said a person familiar with the matter, who was not authorized to speak about the deal and asked for anonymity.

A representative from OneRiot said she could not comment on the matter.

A second source familiar with the matter said Yahoo was conducting real-time search tests with other companies, as well.

Real-time search is emerging as a popular way to find information on the Internet, due in large part to the popularity of microblogging service Twitter, which lets users broadcast 140-character messages.

By searching streams of Twitter messages, a Web surfer can often get information faster than through some standard Web pages retrieved through traditional Internet searches.

Last month, Google Inc and Microsoft Corp announced back-to-back deals to make Twitter messages retrievable by their search engines.

Yahoo said in a statement that it was testing a new "search shortcut" that would include real-time results at the top of search results pages.

"The shortcut will only appear on certain queries that will be determined by Yahoo. This is a test designed to discover if showing such content is useful to people," the company said.

Yahoo signed a separate 10-year search deal with Microsoft in July, which is expected to close next year. Under the terms of that deal, any data Microsoft's search engine has access to also would be accessible to Yahoo, Yahoo Chief Technology Officer Ari Balogh said last month.

He said at the time that Yahoo had been testing the limited inclusion of Twitter messages within search results to certain users.

Yahoo's deal with OneRiot, first reported by the Wall Street Journal, does not include any revenue sharing elements, according to the first source familiar with the matter.

One Riot, based in Boulder, Colorado, collects real-time Internet information from various sources, including Twitter, Digg and its own network of 3 million users that use the company's software. The company has raised $27 million in funding to date.

(Reporting by Alexei Oreskovic)