AP) SAN FRANCISCO (AP) — Tax-free shopping is under threat for many online shoppers as states facing widening budget gaps increasingly pressure Amazon.com Inc. and other Internet retailers to start collecting sales taxes from their residents.

Billions of dollars are at stake as a growing number of states look for ways to generate more revenue without violating a 1992 U.S. Supreme Court ruling that prohibits a state from forcing businesses to collect sales taxes unless the business has a physical presence, such as a store, in that state.

CNET) — Dell said Friday that it’s ready to enter the smartphone business with the Android-based Mini 3.

Long rumored to have such a device in the works, Dell said that the first two carriers to sell the Mini 3 will be China Mobile and Brazil’s Claro.

The Mini 3 will apparently use OPhone, China Mobile’s customized version of Google’s Android operating system. “We are excited for Dell to be among the first manufacturers to introduce new technology based on the OPhone platform,” an unnamed China Mobile representative said in Dell’s press release.

We’ve got a call out to Dell to seek clarification on the operating system software.

(Wired) — Google is set to become your new phone company, perhaps reducing your phone bill to zilch in the process.Seriously.
Google has bought Gizmo5, an online phone company that is akin to Skype but based on open protocols and with a lot fewer users. TechCrunch, which broke the news on Monday, reported that Google spent $30 million on the company.
Google announced the Gizmo acquisition on Thursday afternoon Pacific Time. Gizmo5′s founder Michael Robertson, a brash serial entrepreneur, will become an Adviser to Google Voice.

It’s a potent recipe — take Gizmo5′s open standards-based online calling system. Add to it the new ability to route calls on Google’s massive network of cheap fiber. Toss in Google Voice’s free phone number, which will ring your mobile phone, your home phone and your Gizmo5 client on your laptop.

Los Angeles, California (CNN) — The Internet’s most popular search engine should get smarter about music, as Google updates the algorithms that power its searches this week, a company spokesman said.

“You don’t have to know what you’re looking for,” Google’s Jennie Johnson said.

“If it looks like they’re looking for a song, we’re including in the regular search result links to hear songs from partners,” Johnson said.

Contrary to techie rumors, Google is not launching a music download service, but it will give music searchers a direct link to commercial sites that do offer songs for sale.

Google will not become a music retailer itself, but will offer enhanced music search with a streaming function — the first of possibly several vertical search offerings.

Searching for an artist or song will apparently bring up a box (thus Google’s working title: “One Box”) with a streaming link randomly assigned to stream songs from either Lala or iLike, the latter of which was acquired by MySpace in August.

Lala, iLike, “and others” will announce the service next Wednesday at Capital Records Music in Hollywood, California, with musical guests OneRepublic plus members of Linkin Park and Dead by Sunrise.

The Web application from Google Inc. combines elements of e-mail, chat, Wiki documents, blogs and photo-sharing sites to create a form of Internet communication called a “hosted conversation,” or a “wave.”

Google demonstrated Wave at the Google I/O developer conference in San Francisco, California, in May. The closed group of beta testers will help Google fish bugs out of the application before a public release by the end of the year, according to the Google Wave Web site.

The app was created by Jens and Lars Rasmussen, the Australian brothers who developed Google Maps. The Rasmussen brothers said they hope Google Wave will eventually replace e-mail as the main way people converse on the Internet.

In a highly anticipated announcement, Justice Department attorneys cited “class action, copyright, and antitrust” concerns in asking U.S. District Court Judge Denny Chin in New York to reject the currently constructed class action settlement between Google and the Authors Guild, which had sued them.

Despite the perceived problems, the federal government in its first public comments in the case, said it believes the necessary changes could be made, and urged continued negotiations.

“Because a properly structured settlement agreement in this case offers the potential for important societal benefits, the United States does not want the opportunity or momentum to be lost,” the government said.

Or what if you’re in the market for a new camera? You saw a friend with a credit-card-thin model at a party last weekend. But was that a Canon? A Nikon? A brand you’ve never heard of?

If you’re like many people, you’d turn to the Internet for answers. But you type in “dog breeds” or “digital cameras” into Google and punch enter, and a big list of blue links comes up. You don’t see the dog you want. You don’t find the camera, either — at least not quickly.

Such quandaries are the driving force behind Bing’s new “visual search” function, which lets Web users troll through image catalogues instead of Web pages when they know what something looks like but can’t put their finger on the name.

Books are being pushed aside for digital learning centers and gaming areas. “Loud rooms” that promote public discourse and group projects are taking over the bookish quiet. Hipster staffers who blog, chat on Twitter and care little about the Dewey Decimal System are edging out old-school librarians.

And that’s just the surface. By some accounts, the library system is undergoing a complete transformation that goes far beyond these image changes.

Authors, publishing houses, librarians and Web sites continue to fight Google’s efforts to digitize the world’s books and create the world’s largest library online. Meanwhile, many real-world libraries are moving forward with the assumption that physical books will play a much-diminished or potentially nonexistent role in their efforts to educate the public.

NEW YORK (CNNMoney.com) — Microsoft and Yahoo reached a long-awaited partnership Wednesday in a bid to challenge Google’s dominance in online search.

Under the 10-year deal, Yahoo.com and Bing.com will maintain their own branding but search results on Yahoo.com will say “powered by Bing.” Yahoo, in turn, will be responsible for attracting premium advertisers.

Microsoft will pay Yahoo 88% of the revenue it gains from searches on Yahoo’s sites. Microsoft will also have the rights to integrate Yahoo’s search technology into its own existing