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Billboard reported Thursday that MasterCard Inc. (NYSE: MA) has launched a new campaign titled "Roots of Rock" that offers free downloads for cardholders from Universal Music Group. Apparently the free aspect of the campaign is limited and after 100,000 songs have been downloaded, MasterCard will begin to charge $0.80 per track. Even after the credit card company begins charging for downloads, pricing for tracks is still lower than Amazon.com Inc. (NASDAQ: AMZN)'s MP3 Store ($0.89) or Apple Inc. (NASDAQ: AAPL)'s iTunes Store ($0.99).

Cardholders who also make a purchase by August 31 will be "entered into a sweepstakes with a grand prize of having a meet and greet with Jon Bon Jovi, Eric Clapton or Kenny Chesney." MasterCard executive Amy Fuller told Billboard with the new campaign, the company has "created unparalleled music experiences with three of the world's most popular artists, providing consumers with an intimate perspective on these icons that few fans will ever have." But those fans will have to win the sweepstakes.

MasterCard's campaign to offer free downloads is like numerous other programs that are linked with music companies, but it offers to take the digital market to a larger consumer base. Lowered prices (eventually) for the campaign mean that Universal Music Group will continue to hold on to the lead in music sales, if only because the music company is the only one on board with MasterCard. Consumers that might not have ever downloaded a track may be enticed to try out the campaign and the sweepstakes. This type of growth is what the music industry will need if digital sales are ever going to replace physical sales successfully and completely.

MAJOR PAPERS:

• According to people familiar with the situation, the Wall Street Journal reported that Yahoo! Inc (NASDAQ: YHOO) is again talking to Time Warner Inc (NYSE: TWX), this time about taking over AOL, with Time Warner taking a stake in the combined entity. News Corporation (NYSE: NWS) has its eye on any Yahoo moves. Meanwhile, Microsoft Corporation (NASDAQ: MSFT) is considering what its next move against Yahoo might be and is talking to News Corp.
• The Wall Street Journal also reported that, as part of the company's plan to cut costs, Tribune Co's Los Angeles Times newspaper may look to cut about 250 jobs, including about 17% of its news staff.
• The Financial Times reported that Chrysler, which has been searching for foreign partnerships, signed with China's Great Wall Motor a memorandum of understanding to explore long-term business ties in areas that include technology, distribution and components.

OTHER PAPERS:

• According to the Dallas News, AMR Corporation's (NYSE: AMR) American Airlines informed its flight attendants' union that is may lay off 900 flight attendants on August 31.

WEB SITES:

• Yonhap reported that LG Electronics will release "Dare," a new touch-screen mobile phone in the U.S. that will compete with Apple Inc's (NASDAQ: AAPL) latest iPhone models.

The weak market conditions have caused many stock prices to fall under $10. Not only smaller -- and perhaps lesser known -- stocks trade under $10 these days, but also some big and famous names such as Ford Motor Co. (NYSE: F), Motorola Inc. (NYSE: MOT), Sprint Nextel Corp. (NYSE: S), Washington Mutual Inc. (NYSE: WM) and Del Monte Foods (NYSE: DLM), as well as many airline companies like Northwest Airlines (NYSE: NWA) and JetBlue (NASDAQ: JBLU).

While those names could sound tempting for investors who may think they are cheap, BusinessWeek's Karyn McCormack reminds us that not everything that is cheap is a good bargain, and there are some risks that need to be taken into account.

One common problem for most of these stocks is that they trade under $10 for a reason. That reason is usually hardly any earnings growth, if any at all. And with a weak economy, these companies would have an even harder time to stimulate growth. Add to the mix the fact that institutional investors don't like to touch stocks under $10 and the potential for recovery is not good.

Sometimes a major CEO seems like a foolish child more than a competitive leader. And sometimes the head of Verizon Communications, Inc. (NYSE: VZ), Ivan Seidenberg, has said things that make many of us scratch our collective heads. With Apple, Inc.'s (NASDAQ: AAPL) 3G iPhone about to hit the street (but not the Verizon network), Seidenberg must have been driven by jealousy to say something silly.

In response to the impending release of the 3G iPhone, Seidenberg said: "There goes the conspiracy again. You're declaring them a winner before they've earned it on the field." This in response to a reporter's question about the new iPhone achieving mass market appeal due to the lower entry price of $199. The iPhone does not have a huge market share when all sold phones are considered, but the new $199 price tag could sure put the Cupertino company in a position to ramp up that share pretty fast. This apparently concerns Seidenberg.

Sometimes waiting out the competition is a strategy that doesn't involve much R&D. Seidenberg went on to say, "Steve Jobs eventually will get old . . . I like our chances." Instead of trying to find some innovation to provide to the Verizon customer, maybe Verizon (along with all the other wireless carriers) will just try to wait out Apple's wireless offerings until Steve Jobs retires. Doesn't sound like a recipe for success to me. But then again, Seidenberg has said some pretty clueless things before. Maybe this is just another example of a corporate leader who's out of touch with his industry.

Before the bell: Futures higher on SBUX, YHOO, ahead of inventory report

Deutsche Bank (NYSE: DB) shares are trading 4.2% higher in premarket action after the bank, seeking to calm investors, said it expects a profit in its second quarter.

While AT&T Inc. (NYSE: T) unveiled its pricing strategy for Apple Inc. (NASDAQ: AAPL)'s 3G iPhone to go on sale July 11 with a $199 and $299 (with contract) price points as expected, Canadians are outraged over Rogers Communications Inc. (NYSE: RCI)'s 3G iPhone rates and have created an online petition that collected over 19,000 signatures already.

AstraZeneca (NYSE: AZN) rose in Europe and is rising over 2.7% in premarket trading after winning a court case against Teva Pharmaceutical (NASDAQ: TEVA) and the Sandoz unit of Novartis (NYSE: NVS) over patents on its Seroquel schizophrenia drug.

A day after car sales were seen as "not as bad as expected," comes Merrill Lynch and downgrades General Motors (NYSE: GM). Shares are down over 3% in premarket trading.

Reuters reports today that Nokia Corp. (NYSE: NOK) has signed up Warner Music Group Corp. (NYSE: WMG) to its "Comes with Music" phone service and music store. Nokia is the world's top phone manufacturer and will be making a direct challenge to Apple Inc. (NASDAQ: AAPL)'s iTunes Store, according to numerous reports. The "Comes with Music" service is the first from a phone manufacturer to "push heavily into content" and "differs from other packages on the market as users can keep all the music they have downloaded" while in yearly contracts with Nokia.

WMG executives allowed the music company to join up with Nokia since the service "is the first global initiative to fundamentally align the interests of music companies with telecommunications companies." Nokia already secured the support of fellow music companies Universal Music Group and Sony BMG Music Entertainment in April, and "Comes with Music" launches later this year. Reuters speculates that the agreements with three of the top four music companies (EMI Group has not signed up yet) will "help Nokia attract smaller music companies and challenge the dominant pay-per-track sales model for digital music." Last year, download sales totaled $2.9 billion; if the 146 million Nokia phones had featured "Comes with Music", those sales would have surpassed the digital market.

Record labels have consistently looked for new methods to challenge Apple's grip on the music industry, and subscription models like "Comes with Music" may finally provide that challenge. Subscription models give the music industry more shares per download since users typically are not allowed to keep tracks downloaded during the subscription. "Comes with Music" is betting against that model since users will be allowed to keep music downloaded, and Nokia and the record companies are no doubt hoping that dynamic will keep those consumers renewing contracts with the service. Reportedly, the subscription for "Comes with Music" will only cost $20 per phone, which on a yearly basis would not be too expensive for unlimited downloads.

You would think that companies making standalone GPS devices would be making bank right now. The devices that never let you get lost when driving are important to many travelers, especially when you don't want to fumble with maps, let alone get lost and waste a bunch of expensive gas getting back on track. Garmin Ltd. (NASDAQ: GRMN), one of the leading GPS makers, though, has seen tough times recently. Its shares have declined 56% recently. Why I'm not sure. I do know that it has nothing to do with Apple, Inc. (NASDAQ: AAPL)'s iPhone that's about to be released in a few weeks.

Apple's new 3G iPhone will have embedded GPS, which will make the gadget all the more useful. Regardless, though, will consumers be using their iPhones as replacements for full GPS devices in all those vehicles? Unless there is a decent vehicle mount kit available, it's hard to believe so. The iPhone does have the best chance at displacing more units from Garmin and other GPS makers like TomTom in the car navigation arena, but the entire GPS experience is what some folks probably forget about.

If you've ever used a GPS navigation program installed on a normal cellphone or smartphone, does it works seamlessly like a standalone product? Can you take and make calls while the GPS continues working in the background, giving you all those voice directions? What makes standalone GPS devices so valuable is that they work even when we're multitasking with phone calls. That's the kicker: the first time you miss a direction by voice because you're busy chatting on the phone, a GPS solution on top of a cellphone -- at least for driving purposes -- would become useless to the average consumer. I doubt Apple's upcoming solution will be this drab, but I continue to see a bright future for standalone GPS device manufacturers (although profits will continue to dwindle). Apple, as always, is not the only game in town. It will still be big for non-driving GPS uses, though.

Everyone in the music distribution business wants to be like Apple (NASDAQ:AAPL) iTunes. No wonder. It has over 80% of the market. Rhapsody, a competing download service, said yesterday that its subscribers could play their music on the iPod. It feels that should improve their customer base. Maybe. But, probably maybe not.

Now, Nokia (NYSE:NOK) has signed up Warner Music (NYSE:WMG) to its mobile phone music service. The big handset company has done deals with three of the four largest record labels.

According to the FT, "Consumers who buy Nokia phones featuring Comes with Music will be allowed to download as many songs as they like from Universal Music, Sony-BMG and Warner for a year." Now Warner is on board.

Getting a piece of the iTunes business will be hard, but Nokia probably has a better chance than anyone else. It sells 40% of the world's handsets, over 400 million a year.

But, consumers are used to getting their music from iTunes. Nokia may have a service, and it may have distribution, but it does not have a music brand or product loyalty in the download subscription business.

The loyalty part is important.

Douglas A. McIntyre is an editor at 247wallst.com.

Sirius Satellite Radio, Inc. (NASDAQ: SIRI) laid out what it thought its financials would look like next year after a merger with XM Satellite Radio Holdings (NASDAQ: XMSR). The market wasn't impressed.

Sirius had an odd way of expressing how it would save money next year. According to the company, "Total synergies, net of the costs to achieve such synergies, for the combined company are expected to be approximately $400 million in 2009." The firm also said it expected positive free cash flow.

All of that good news sent Sirius down almost 9% to $1.91. Volume was heavy at over 35 million shares, so the selling turned into a stampede.

Sirius forgot to mention the one number that Wall St. really wants to see which is what it thinks the revenue for the merger company will hit for 2009. Without that, it is impossible to determine whether any of the cash flow numbers are believable.

Conceding that Apple Inc. (NASDAQ: AAPL)'s iPod will be the digital music player of choice for the foreseeable future, online music downloading service Rhapsody is rolling out a $50 million marketing effort to convince iPod users currently using iTunes to make the switch to Rhapsody. Partner sites include Yahoo, Verizon Wireless and iLike, and the downloads will be in the mp3 format so they can be played on iPods.

Rhapsody is a joint venture of Real Networks and Viacom, so it's one of the few online music providers that has the muscle to compete with Apple. But I doubt that they'll be able to. In just a few years, Apple has made itself the biggest seller of music in the country, and sales of music downloads grew about 35% in the most recent quarter, according to the company's 10-Q.

iTunes seems to be pretty entrenched, and I just can't see anything compelling coming from Rhapsody that would motivate anyone to switch from iTunes. Rhapsody vice president Neil Smith told Reuters that "We're no longer competing with iPod. We're embracing it."

But now they're competing with iTunes, and consumers seems to have overwhelmingly embraced that. You really have to question Rhapsody's -- and every other also-ran mp3 seller's -- reason for existing.

The Financial Times reported last week that representatives for The Beatles, Activision Inc. (NASDAQ: ATVI), and MTV Games, a division of Viacom Inc. (NYSE: VIA), are in talks about developing Beatles-themed video game versions of Guitar Hero and Rock Band "in a move that could pave the way for a broader licensing of the Fab Four's catalog." Although the final deal would eventually be worth several million dollars, it would have to win over both Apple Corps and the EMI Group, the two companies that oversee the band's business interests and the master recordings.

The Beatles have been one of the major artists to resist any move into the digital world, but if such a deal were to occur it would likely happen simultaneously with any move by The Beatles into digital stores and the digital market. In the past year and a half, numerous rumors have appeared that cited 2008 as the year that would see the move, including comments made by Olivia Harrison, George Harrison's widow. Unfortunately, no such appearance by the band into stores like Apple Inc.'s (NASDAQ: AAPL) iTunes or Amazon.com Inc.'s (NASDAQ: AMZN) MP3 Store has happened even with a new management team led by former Sony BMG executive Jeff Jones.

Any deal would send a massive shockwave through the music industry and no doubt come with numerous marketing and advertising techniques that have become popular and successful in recent years. Although many Beatles purists and fans might be put off by an iTunes-themed commercial featuring The Beatles and the band's music, the exposure provided by such a method would increase awareness of the band to younger and newer audiences.

Rhapsody, a music download service owned by Real Networks (NASDAQ: RNWK) and Viacom (NYSE: VIA), will make yet another run at Apple Inc.'s (NASDAQ: AAPL) iTunes. According to Reuters, "Digital music seller Rhapsody is launching a $50 million marketing assault on Apple's iTunes, offering songs online and via partners including Yahoo Inc. (NASDAQ: YHOO) and Verizon Wireless."

Why the venture thinks it will have real success is anyone's guess. Downloading to Verizon Wireless phones is not exactly the kind of novelty that is likely to draw customers. The service will have one important new feature, though. Rhapsody subscribers have not been able to play their music on iTunes. Under the new push, that will change.

Memo to Rhapsody: The horse has already left the barn. Keeping the service off of the iPod for so long has helped iTunes move into a unassailable position.

Real Networks, which dominated the multimedia market with its Real Player from the late 1990s until about five years ago, was slaughtered by Apple when it offered a device coupled to a music store with the launch of the iPod.

There is no catching up now. The race is over.

Douglas A. McIntyre is an editor at 247wallst.com.

Get Ready for Cuts in Government Services
State and local governments were flush with tax revenue during the five-year housing boom. They pulled from bulging pools of property, income, and sales tax to expand education, law enforcement, health care, and infrastructure programs without needing to burden residents and corporations with tax hikes. Those days are over. As the economy stalls, state and local governments will see less tax revenue roll in and you will likely see for cuts in services. Among the states with the worst shortfalls are Arizona, Florida, Rhode Island, Nevada and Georgia.
The Next Victim of the Real Estate Crisis- BusinessWeek
Also: States With Worst Tax Shortfalls


Where Bad Credit Hurts the Most
Most people understand that low credit scores will translate into higher mortgage and credit card interest rates. But few realize there are plenty of other insidious ways that low scores can add to a person's costs. Bad credit can also negatively effect your job, utilities, cell phone, elective medical procedures and your marriage.
Bad credit hurts in many ways - Bankrate.com

Handset maker Sony-Ericsson said it is having a tough time. According to The Wall Street Journal (subscription required), "the mobile-phone maker continues to be hit hard by a weakening economy in Western Europe, hurting demand for the mid- to high-end handsets it specializes in."

Of course, another big market for more expensive phones is America, Motorola's (NYSE: MOT) last stronghold. The U.S. company faces a double threat now. It does not have any "hot" model to compete with new products from Nokia (NYSE: NOK), Samsung, or Apple (NASDAQ: AAPL). Now it appears that the recession is cutting demand for phones altogether.

Motorola may already be at a place where its handset operation cannot recover. Revenue in the division is dropping rapidly, and the unit is losing money. Its share of the global market has dropped from 22% two years ago to about 12%. And, the company's stock is down to a 52-week low of $7.20, about 65% down from its 52-week high.

No matter how hard it may be for other companies in the industry, the only firms that may do well over the next year are Nokia and specialized handset makers like Apple. Nokia has about 40% of the global market and sells modestly priced phones in rapidly growing markets including China and India. Apple gets the high end of the market.

In the middle is Motorola, with barely a hope of things getting better.

Douglas A. McIntyre is an editor at 247wallst.com.