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Amazon’s new online streaming video service, Video on Demand, isn’t going to win any awards for creative branding. Then again, to have a service with such a straightforward name replace one that had anything but, Unbox, may be a good thing. Most importantly, Video on Demand is a compelling alternative to the iTunes video store.

While Amazon Unbox offered movie purchases and rentals, it was PC-only initially before eventually moving on to TiVo personal video recording boxes as well. It had a limited market. Video on Demand now works with both PC and Macs and reaches into your living room by way of TiVo or a number of Microsoft Windows Media Center extender boxes — including the Xbox 360 gaming console.

Those two bridges to the living room give Video on Demand access to potentially millions of television sets — more than enough to compete with the Apple TV, Apple’s digital video box that connects to televisions. Video on Demand also has an important trump card over Apple: NBC content.

NBC pulled its content off of iTunes in late 2007, and despite some rumors of reconciliation, it has not come back yet. Part of the reason is that NBC’s own online video venture with Fox, Hulu, has become a big success. While Video on Demand and Hulu will have much of the same television content, each takes different approaches to the presentation. Video on Demand offers commercial-free television episodes for purchase at $1.99 an episode (or less if you buy a season pass), while Hulu offers commercial-backed episodes for free.

I haven’t found Hulu’s ads to be too annoying — certainly not enough to outweigh the benefit of free. But with Hulu there’s no way to get the content on a television set unless you hook your computer directly into it. That gives users a clear incentive to use Amazon’s service.

Apple could be ready to respond as soon as Tuesday on the television front, when it’s rumored Apple will start offering television shows in high definition (HD). That’s a very nice feature, but if Apple has persuaded NBC to come back in the fold, that would set up a real rivalry between itself and this new Video on Demand service.

Prices are largely the same on both, not only for television content, but for movies as well. Movie purchases on Video on Demand range from $7.99 to $14.99, while movie rentals range from $2.99 to $3.99. The libraries for rentals look to be about the same. Certain rentals are available the day they launch on DVD depending on if the studio behind them has allowed for it, while others are only available for purchase at first.

Amazon also has a back catalog of some 40,000 films for purchase and/or rent, as NewTeeVee points out.

The online player itself (above) is pretty nice — at least in full screen mode. In windowed mode there is entirely too much else going on Amazon’s site to distract your eye. Video quality seems good, roughly what you get with Hulu.

Just as AmazonMP3 is now a compelling (if not superior in some regards) rival to Apple’s iTunes music store, Video on Demand is a legitimate rival to the iTunes movie store. Amazon is nowhere near Apple in terms of usability of its store, but at the end of the day selection will be the key factor, and with NBC content and tens of thousands of new and catalogue movies, Video on Demand cannot be overlooked.

The digital living room box Roku, which currently streams Netflix movies, is thought to be seeking other content partnerships. Certainly, Video on Demand would be a good fit to offer the new movies that Netflix doesn’t allow users to stream.

The Facebook Movie has a very unofficial casting call — Yesterday, top Hollywood screenwriter Aaron Sorkin let it be known he was working on a movie about the high-flying social network. Here’s a (rather entertaining) formulation of which actor might play which geek role. Yes, Michael Cera (a co-star in Juno) would be Facebook founder Mark Zuckerberg. [Michael Cera image via Radar Online.]

Linux rises to 13.4 percent of the server market — CNET’s Matt Asay examines the market share of open-source software Linux versus competitors like Windows.

Document-sharing site Scribd gets a redesign — The site gets more than half its traffic from search engines, according to Techcrunch. So the redesign includes a more prominent search box, in an effort to make it more of a destination site.

Bloomberg publishes Steve Jobs obituary by mistake — We didn’t give this story more attention because it was a sad editorial accident, followed by a lot of tasteless editorializing.

Yahoo shuts down social network Mash — It’ll be gone on September 29th.

IPhone factory cameo photo a “beautiful mistake” — At an iPhone factory on the other side of the Pacific, this picture was taken on an iPhone that went to a consumer — it has become an internet sensation. A factory spokesperson responded by calling it a “beautiful mistake. [Said photo via Macrumors.]

There’s no student version in the works for digital book-reading device Kindle – The rumor had gone far and wide in the blogosphere, but Kindle creator Amazon says there will be no new version of Kindle this year. Maybe next year.

Super Rewards: A company that makes money for top Facebook app games — We’ve covered how Mob Wars is making possibly a million dollars a month. Inside Facebook has a look a big monetization strategy — using cost-per-action incentive ads from a company called Super Rewards.

McCain uses Google to attack Obama — Tis the season for political attacks on the internet. Republican presidential candidate John McCain’s campaign has purchased Google search ads that appear prominently next to searches such as “Joe Biden” — the Democratic vice presidential nominee. The Wall Street Journal has more.

Gory comic apps apparently not welcome on the Apple App Store — Apple has already put one, Murderdrome, down for the count.

Amazon buys social network for book lovers — Shelfari, a small social network for bibliophiles, has been acquired by Amazon.com, according to John Cook at the Seattle PI. Amazon also has a stake in Shelfari’s main competitor, LibraryThing.

Internet Explorer to subtract some ads — A feature called InPrivate Blocking will stop tracking pixels that help advertisers see where you have been on the web, while another privacy feature will prevent information like cookies and browsing history from being saved.

China considers a stimulus package — The growth of China often pointed to as proof that the credit slowdown won’t cause a global slump. But if the country is considering a stimulus, that may indicate that matters are worse than expected.

Triphub gets deadpooled — TechCrunch has the post-mortem on the Seattle-based travel site.

Set-top box maker Vudu goes through layoffs — Hard-pressed set-top box maker Vudu, which most recently added hi-def porn to its offerings, appears to be suffering through some layoffs.

States group sues EPA — A group of 12 states is suing the Environmental Protection Agency for refusing to regulate greenhouse gas emissions, a fairly necessary step in convincing industry to switch to cleaner power sources.

Micro-batteries built on viral assembly line — MIT researchers have coaxed viruses into building a dense, miniaturized battery that could be biocompatible, giving fanboys hope of one day embedding an iPhone in their arm.

Strengthening dollar may hurt tech — Large tech companies including eBay and Yahoo will be hurt by a rallying dollar, according to the LA Times.

Obama takes the title for largest mobile marketing event — A text from Barack Obama’s campaign announcing his vice presidential pick reached 2.9 million people, according to Nielsen.

Car info network DriverSide acquires fairBenjamin — The newly-launched car information site has acquired a fairBenjamin, a cost estimation and diagnostics site, which should help it keep up a healthy rivalry with RepairPal, another new site.

Silicon Valley Bank adds to Utah outpost — Could Salt Lake City be growing in importance as a tech and life sciences hub? Silicon Valley Bank must think so; it’s beefing up its presence in the area.

Mobile voice network operator Virgin Mobile USA has finished absorbing rival Helio — We heard a rumor, more than once, that “massive firings” were being considered, but Virgin Mobile tells us that this won’t happen. Instead, some employees have been “rebadged” to work at its IT partner, IBM.

Amazon is developing a student version of electronic book-reading device Kindle — The question many students surely want to know: Will electronic textbooks on Kindle be any cheaper than the physical ones? In the meantime, colleges are buying students iPods.

Did Goldman Sachs shut off its employees access’ to Facebook? — That’s according to a Wall Street gossip blog; shutting off social network access at work is a relatively standard practice for large companies. This rumor wouldn’t be surprising. But neither the company nor employees I spoke with would comment, so I put the item here in roundup. Email me at eric (at) venturebeat (dot) com if you know more.

IList, a stealthy online classified competitor to Craigslist, raises $1.5 million — “Good luck“

Study: More than half a million “gold farmers” in developing countries — In a real-world gold rush, people flock from everywhere to mine the ground or sift the river rocks. In online games like World of Warcraft, they “farm,” meaning they play mundane tasks within a game, like killing an important bad guy (see the screenshot of a pitched battle). This earns them virtual gold that they can sell to players with less virtual wealth but more of the real stuff. There’s more than half a million people doing this, the BBC reports, citing a British study [image also via the BBC].

The Economist calls Google Lively a flop, but it’s only a month old — Lively is a 3D avatar service that one day may be a more full-featured virtual world. Right now, though, people are having trouble using it due to numerous bugs. Google is well-known for releasing products as early as possible in their development. The company does this to test out what products are actually popular before spending too much time and money on them. This is a common practice for software startups, in general. We’re reserving judgement on Lively for now.

Ning shuts down WidgetLaboratory — The widget-maker had repeatedly violated Ning’s terms of service by offering widgets that affected Ning’s own site performance and by collecting private user data. Before that information came to light, WidgetLaboratory had accused Ning of eliminating it for competitive reasons only, according to Techcrunch. 

Venture firm EDF files suit against anonymous commenter on TheFunded — The commenter had criticized the firm on the site. EDF earlier responded to the commenter with a subpoena against TheFunded itself, trying to gain more information about who this person is. [Note: We have a business relationship with TheFunded, including links to each other's sites.]

Here’s the latest action:

Leading market researchers team up to report on video game sales – The leading research companies in the field (The NPD Group, GfK Chart-Track Limited and Enterbrain) have released the Top Global Markets Report in a long overdue move to provide reliable data on worldwide game sales. The bestselling game of the year so far is Rockstar Games’ Grand Theft Auto IV, according to the report.

Microsoft introduces photosharing technology Photosynth — A “synth,” as Microsoft calls it, is a three-dimensional, 360-degree version of your digital photos. The service was so popular that Microsoft’s servers failed, which the tech giant seemed oddly happy about.

Medical social network Xoova shuts down — The company, which previously received $2.5 million from Spark Capital, decided to fold after an unsuccessful attempt at raising a second funding round, according to VentureWire.

Solar firm Suniva reaches $1B in orders — Suniva, which raised $50 million back in February, already has a $1 billion in orders, split between two big firms. The company declined to tell us what that translates to in megawatts, but said it had already planned out its production capacity before the orders, so the backlog should last a while.

Amazon opens Elastic Block Store for persistent storage in the cloud — The new store works in conjunction with Amazon’s Elastic Compute Cloud, a service for running web applications.

Social bookmarking service Iterasi launches Scheduler and a version for Macs — The new tool allows users to automatically save sites on a scheduled basis, as often once a day. Iterasi is useful because because it allows you to save all the information on a page, including images and links.

Quantcast hires Yahoo vet Todd Teresi as chief revenue officer — Teresi will start at the online audience measurement firm after Labor Day. His responsibilities at Yahoo included handling the publisher channel and managing off-network partnerships.

Comcast says it has no final plans on traffic management — Despite earlier reports that the Internet service provider will slow connection speeds for its heaviest users for up to 20 minutes during peak traffic, Comcast clarified today that it hasn’t finalized its plans.

Chinese censors block iTunes — Customers in China have been unable to download songs from the iTunes store for several days, according to Business Week’s Frederik Balfour, who says the move may be related to iTunes’ sale of a Tibetan solidarity album.

It happens to me quite a bit that I’ll be out with a friend and we’re talking about a movie that I’m interested in seeing. But then we move on to another topic and I never think about it again. A new feature available on Kwiry may remedy situations like that.

Kwiry, a service that allows you to interact with different web services through your phone, now allows you to use text messages to send in movies you wish to add to your Netflix movie rental queue. You do this simply by texting “netflix” and then the name of the movie you want to add to Kwiry’s number, 59479 (k-w-i-r-y).

Kwiry is also launching similar integration with Amazon’s Wish List feature. This is the area of the site where you can add items that you hope to buy, or that someone will buy for you later. Simply text “amazon” followed by the name of the product you wish to add to the same 59479 number and the product will be in the list the next time you check it.

Of course, both of these services require you get the name of either the movie or product right. For a movie that shouldn’t be too difficult, but a product seems like it could be problematic.

For both of these features all you need to do is register for a free Kwiry account. It can be easy to forget sometimes in a world with iPhones and BlackBerrys that simple phone functionality combined with the Internet can still be useful — and can potentially reach many more people.

As Kwiry puts it: “While the iPhone is cool and works great, you can use nearly any phone — all you need is an SMS plan.”

When’s the last time you bought an actual CD? For me, it’s been almost a year which is crazy considering that between the mid 1990s and mid 2000s I bought hundreds of them. Have I stopped liking music? No, I’ve just gone digital, and apparently so has much of the rest of the United States.

Apple’s iTunes digital music store cemented itself as the leader among all U.S. music retailers during the first half of 2008, according to a survey by market research company NPD. Though iTunes didn’t officially take over the number one spot until April, it still sold more music from January to June of this year than any of its competitors.

The former leader, Wal-Mart, retained the number two position with Best Buy in third. It’s Amazon, though, that appears to be the big mover on the list. It has moved up to fourth place from its fifth place position earlier this year. One reason is that online CD sales haven’t fallen quite as fast as brick-and-mortar store CD sales, but also Amazon’s digital download service, AmazonMP3, is doing quite well, says NPD.

I continue to use AmazonMP3 instead of iTunes as I believe it is a superior offering. All of the tracks found on AmazonMP3 are DRM-free (as opposed to just some on iTunes — despite Apple chief executive Steve Jobs’ promises to improve the selection) and many are cheaper than on iTunes. To be fair, iTunes still clearly has the edge in user experience.

This list could soon get a major shakeup, as MySpace Music is set to launch next month. Aside from being a social network, MySpace is a very successful platform for bands and artists to launch music offerings. Now it will begin selling and streaming digital music.

The makers of the popular music game Guitar Hero are also gearing up to sell digital music through the game, Fortune’s Techland blog reported last month.

[photo: flickr/Marshall Flickman]

Elastra, a company that helps manage applications in the Internet cloud, has raised $12 million in new funding.

This is Elastra’s second venture round, and it was led by Bay Partners, with Amazon.com and existing investor Hummer Winblad Venture Partners also participating. Amazon’s backing is particularly impressive, since its Elastic Compute Cloud (EC2) makes Amazon one of the most important companies to cloud computing in general, and to Elastra in particular, since the San Francisco startup hosts applications on Amazon’s EC2 service.

The last few months have seen a number of significant cloud computing announcements, including the launch of Google App Engine, which allows developers to build and deploy their applications using Google’s infrastructure. On the investing side, Benchmark Capital invested $4.5 million in Elastra competitor RightScale, open source cloud company 10gen raised $1.5 million from Union Square Ventures and Benchmark and Amazon both contributed to a $15 million second round for Engine Yard, which hosts apps built using the Ruby on Rails framework.

Chief executive Kiril Sheynkman says Elastra’s offering is unique because it can manage individual applications, rather than virtual appliances (i.e. an entire virtual machine), and because it manages applications across private and public Internet clouds. Since its launch in March, Elastra has signed up more than 40 paying customers, and some of the new funding will go toward expanding that customer base.

Elastra raised $2.6 million a year ago.

Toyota working on Segway killer — The transportation robot is called Winglet and comes in three sizes. See screenshot, via ZDnet.

Network storage company Agami shuts down — The Sunnyvale, Calif. company raised $85 million and competed against companies that went public, including 3Par. The shut-down was sudden, catching employees by surprise — apparently, a major debt-holder wanted its money back.

Illinois mandates online cancellation for game subscriptions — An Illinois family found it difficult to cancel a recurring online game subscription fee — by phone so they talked to their politician friends…. The state just signed a law into being that mandates online game companies include an option to cancel online.

Amazon buys rare-book site AbeBooks — AbeBooks is a marketplace that offers more than 110 million used or rare titles, and it has been bought by online book giant Amazon. AbeBooks is itself a minority owner in reading list sharing site LibraryThing, a competitor to Amazon-backed Shelfari.

Security company McAfee buys Reconnex — Mountain View, Calif.-based Reconnex provides business data loss prevention software; McAfee purchased for $46 million in cash. Reconnex raised $36 million.

Third time not the charm for SpaceX’s latest launch — The privately-funded space rocket startup was attempting to launch three satellites into space, but the rocket blew up minutes into the flight. That was the third launch attempt, but a fourth is slated for later this year — the company says its determined not to give up.

AOL buys Friendfeed competitor SocialThing — When it comes to services that let you share what you’re doing on various web sites within in a single interface — “lifestreaming”, if you will — I prefer Friendfeed and Facebook. AOL, meanwhile, has bought smaller Friendfeed rival Socialthing.

Flickr cofounder Caterina Fake joins stealthy startup Hunch — Fake talks about her move here, you can sign up for Hunch here.

Mechanical Turk, Amazon’s service that allows companies to outsource menial tasks that still require some human intelligence (like writing product descriptions or categorizing images), just got more accessible. Today it released features that allow businesses to manage these tasks through a new graphical interface.

Previously, Amazon says companies had to manually manage and retrieve each task, which is incredibly time-consuming if you’re using Mechanical Turk on any real scale. To work more efficiently, businesses needed software developers to write code that would use the service’s application programming interfaces (APIs). But the new interface allows you to create and monitor hundreds of thousands of tasks without having to write a single line of code. It also offers templates that businesses can customize to create the needed tasks, including image tagging, search relevance and data collection. So if you’re running  a photosharing site, for example, and you don’t have the resources to go through each photo to make sure it’s not going to get you into legal trouble, you can set up a task on Mechanical Turk in just a few minutes and pay others to do it.

Larry Dignan of ZDNet poked around the new Mechanical Turk interface and says it “didn’t appear all that intimidating to the average bear.” But he couldn’t offer much in the way of comparisons, since he hasn’t used the old version. Now, I haven’t done any real outsourcing either, so I asked my friend Lukas Biewald of Dolores Labs for his thoughts. Biewald’s startup helps companies manage their tasks through Mechanical Turk — for example, O’Reilly Media hired Dolores Labs to help classify thousands of comments as either “pro” or “con.”

Biewald says the news sounds like a step in the right direction. However, businesses with a really large amount of tasks will still need some programming experience to manage all that data. The significance of the new interface, he says, is that it lowers the “barrier to entry,” so that less tech-savvy companies can at least try the service out. (Keep in mind that Biewald’s not exactly an objective observer, since his business model relies on companies needing help to use Mechanical Turk.)

This announcement follows yesterday’s news that Amazon has launched two payment services for online merchants, Checkout by Amazon and Amazon Simple Pay.

Here’s the latest action:

Facebook growing quickly all around the world — The social networking site is seeing rapid growth in Latin America (it’s growing fastest in Chile, with 2,197 percent growth in 2008) as well as continued expansion in Europe. Inside Facebook has more numbers.

New Zealand inventor tests “world’s first practical jetpack” — Glenn Martin has spent 27 years developing the device, and hopes to starting selling it next year for $100,000 per jetpack. Apparently, he has venture backing, too.

Electronic Arts posts $95 million loss — The loss is wider than expected, but not as bad as $132 million a year ago. The big video game maker says that it is investing heavily in R&D in hopes of scoring bigger hits in the future.

Sony has sold 14.4 million PlayStation 3s to date — Sales of the PS3 and the PlayStation Portable are driving growth for Sony Computer Entertainment, which struggled to reach profitability in the year after the PS3 launched in 2006.

Google’s Sergey Brin says iPhone is pushing trend toward mobile search – During Google’s recent Q2 earnings conference call, Brin estimated that “on a rough order of magnitude” iPhone users do 30 times as many mobile web searches as users of other devices.

MySpace layoffs coming, but less than rumored — The layoffs are part of the company’s annual performance reviews, MySpace Chief Operating Officer Amit Kapur told TechCrunch. All laid off workers will be replaced, and they’ll add up to less than the 5 percent that TechCrunch previously said was rumored.

Amazon launches new payment services — The online retailer has released two new e-commerce payment services that online merchants can use on their sites, Checkout by Amazon and Amazon Simple Pay.

Google Maps gets a new look — The layout is now more blue and less cluttered.

Palm hits 2 million in Centro sales — The news comes four months after the company announced that it sold the first 1 million of its Centro smartphones. That’s not bad, but it casts Apple’s extraordinary iPhone 3G sales — 1 million phones in three days — into even greater relief.

Microsoft’s Kevin Johnson moves to Juniper Networks — Microsoft’s lead on the failed Yahoo acquisition has called it quits, heading for the top post at software and device firm Juniper Networks. Johnson was the president of Platforms and Services, which meant he oversaw most of Microsoft’s web initiatives.

Xobni’s first employee heads to the Xobtuo — Gabor Cselle, a vice president and the first official employee at email startup Xobni, has resigned, stating that he wants to start his own company. Given his past experience and expertise, the new venture will almost certainly be email-focused as well.

Hackers continue to step up attacks in 2008 – Security firm Sophos has published research on the first half of the year, showing that malware levels continue to rise on the web. Businesses, also, are increasingly being used as both targets and launching points for attacks.

Humanoid robot soon for sale — No, it’s not the next-gen Realdoll. A French company called Aldebaran Robotics is preparing to sell its NAO humanoid robots for about $15,000 each. That’s far cheaper than the competition from Fujitsu and Honda. Of course, quality is the real issue, which is why you should actually use the money to go buy a whole herd of Pleos.

Space: The last (solar power) frontier — Sending up satellites to harvest solar energy and beam it back down to earth might be a bright idea, according to this New York Times Op-Ed. The solar crowd already contains many space cadets, so the scheme should work well.

Amazon doubles net with soaring sales — The web retailer bucked the market trend and posted unexpectedly strong results, reporting doubled second-quarter profit on a 41 percent increase in revenue.

Google’s Schmidt says the iPhone is good for Android — Top exec Eric Schmidt told an interviewer that he believes the iPhone is good for Google’s upcoming Android platform, at Fortune’s Brainstorm Tech event. The device, he said, has forced competitors to step up and make their own versatile handsets combining GPS, a camera, a computer and a browser.

Cisco acquires Pure Networks — The communications and IT giant paid $120 million for Pure, which was funded by Bessemer Venture Partners, Ignition Partners, Mayfield and Intel Capital, according to John Cook.

Passwords safe, San Francisco accuses admin of IT terror — The bizarre tale of a San Francisco city employee imprisoned for refusing to hand over the passwords to a city network continues, even now that the man has passed the password to smooth-talking mayor Gavin Newsom. The new accusation is that the felony suspect rigged the network to “implode”.

Classic Nintendo controllers at risk of extinction — The judge in a patent case relating to three of Nintendo’s older controller designs will ban sale of the controllers this morning. Nintendo can temporarily get out of the ruling by posting a bond, which it will do, along with filing an appeal.

Photo credit for Kevin Johnson: Fortune magazine.