Online software may be the future of computing – but the truth is, it’s far from perfect.

• February 12: Research in Motion’s BlackBerry e-mail service goes on the blink for three hours, and slows again a week later.
• February 15: Problems with Amazon Web Services’ S3 online storage service takes several sites down for two hours.
• February 24: Google’s YouTube video service is knocked offline.
• February 26: Some customers of Microsoft’s Hotmail e-mail have their service unavailable for several hours.
  Continue Reading: “‘Cloud’ computing’s reliability gap”

LAS VEGAS - Why did Warner Bros. choose last week to exclusively back the Blu-ray format for high-definition DVDs and ditch HD DVD, a move that could end the bitterest battle in the electronics industry?

Shoppers headed online in droves on Cyber Monday, according to the latest stats: 32.5 million visitors entered virtual stores, up 10 percent from a year ago.

Samsung P-1400 Blu-ray player. Image: Samsung

It’s been quite a busy few days for the high-definition format war between Blu-ray and HD DVD. First, Wal-Mart (WMT) confirmed that it has begun selling the Toshiba HD-A2 HD DVD player in stores for less than $200. The next day Amazon (AMZN) and Circuit City (CC) began offering the player online for a penny less.

Now there are reports that Wal-Mart today will sell the Toshiba player for less than $100 for a limited time; Best Buy (BBY) might follow suit.

So what’s the Blu-ray camp thinking about all this?

Toshiba HD-A2. Image: Toshiba

A pre-holiday retail skirmish in high-definition DVD players has begun. Just days after Wal-Mart (WMT) slashed its in-store price on the Toshiba HD-A2 to $198, Circuit City (CC) and Amazon (AMZN) followed suit by offering the player online for $197.99.

Consumers seem eager to buy the HD-A2, which had been selling on Amazon for $230 and as much as $280 elsewhere. The Toshiba player, which had been one of several top-selling DVD players on Amazon before the price cut, has quickly become the favorite: On Monday morning it was the 24th most-purchased electronics item on Amazon’s site. The next closest DVD player ranked 46.

Flash-based models such as the new iPod touch are increasingly upstaging Apple’s hard drive-based players. Photo: Jon Fortt

In the iPod’s world, storage isn’t the selling point it used to be.

That’s one clear lesson from the sales rankings at the Apple Store, which posts a regularly updated list of the most popular iPod models. Though the iPod classic, which uses a hard drive to store music and video, offers a whopping 80 gigabytes of storage for $249, it is being outsold by the iPod touch. This, despite the fact that the touch has a tenth of the storage space and costs $50 more.

Why is the touch beating the classic? For one, the iPod touch has the benefit of good looks – it’s almost identical to the iPhone, this year’s must-have gadget. The touch also has a large display, built-in WiFi and web browsing. (The iPod touch is isn’t Apple’s best-selling model; number-one is the slim iPod nano, which starts at $149. It doesn’t use a hard drive either.)

Above: an example of an MP3 ad an Amazon Associate might run.

Amazon (AMZN) today is pulling out the small guns as it positions its new MP3 download store to grab market share from Apple’s (AAPL) iTunes. And Amazon has a lot of small guns.

In this case, “The small guns” refers to the Amazon.com Associates Program, one of the retailer’s lesser-known online marketing vehicles. Through Amazon Associates, bloggers and other online publishers can showcase Amazon products in an advertising window on their sites. In return, they earn a cut of the sale – usually 10 percent.

To give a boost to its MP3 store, though, Amazon today sent an e-mail to Associates members that sweetens the deal: Through the end of the year, Amazon will give a 20 percent cut to members who get people to download songs from the Amazon store.

If the doubled incentive proves popular with Amazon’s online publisher community, it could drive real results. Amazon has said it has more than 1 million users signed up for the Associates program, though it’s not clear how many of those users are active.

Say what you will about Microsoft (MSFT) and its product flops – when it enters a new market, the company has an uncanny way of making gradual improvements until it begins stealing market share.

That’s why Apple (AAPL) and SanDisk (SNDK) shouldn’t laugh too hard at the latest version of the Zune media player, which Microsoft announced today. Yes, the original Zune has been an embarrassment for Microsoft, selling a paltry 1.2 million units in its first year – Apple sold 40 million iPods during the same period. Yes, the first Zune’s software was glitch-ridden from the start, prompting howls from reviewers who compared it to Apple’s iTunes.

But you can’t count Microsoft out. As veterans of Apple, Sony (SNE) and Palm (PALM) will tell you, the folks in Redmond are relentless.

The Apple (AAPL) Store has revamped the way it lists the top-selling online items, making it more difficult to tell whether iPhones are more popular than iPods or Macs.

Up until the past few days, Apple displayed one list of the top-selling items across all of its product categories at store.apple.com. That list tended to show that the iPod nano was the company’s best-selling single item, followed by the iPod classic and iPod touch. The MacBook laptop typically showed up in fourth or fifth place, with the iPhone nearby.

It was a convincing argument a few years ago, when the iPod was young and the world doubted people would pay for music tracks they could easily pirate for free: Apple (AAPL) CEO Steve Jobs insisted that iTunes prices needed to be fixed at $.99 per song to keep people coming back.

Later, the same went for TV shows: $1.99 a pop, Jobs said, no exceptions.

But is it time for Apple to rethink that position – at least for video?