The rise of video streaming is dramatically affecting the Internet, according to a two-year study of Internet traffic trends that Arbor Networks recently presented to the North American Network Operators Group. Two years ago, Internet traffic was distributed evenly among a dozen Tier-1 network providers, but today the majority of traffic flows through direct peering agreements among large content providers, content delivery networks and ISPs.

Consequently, Tier-1 networks have shifted their business models from simple packet delivery to richer cloud computing and content hosting services, and new players Google (GOOG) and Comcast (CMCSA) have joined the top 10 list of Internet traffic producers — and the more traffic they put on the Internet, the more control it gives them over your online experience.

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Because it’s my job, I’ve followed pretty much everything Steve Brill has said in public about Journalism Online, the pay-for-news firm he launched in April with Gordon Crovitz and Leo Hindrey. From the start, they’ve been offering infrastructure and consulting for news organizations that want to charge for access to their websites. But as you’d expect with any new venture, the pitch has changed over time.

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I went down to city hall yesterday to participate in a hearing on net neutrality. I realize the NYC city council has no oversight on this issue but the lobbyists were coming out in force so I figured I might as well show up too.

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Demand Media has advertising-driven content down to a science. Instead of creating content for the Web and hoping that it generates revenue, the company works backwards by determining how much revenue each piece will generate before anything is produced.

The company uses a series of algorithms to pick through keywords that people are searching for on the Web and aims to create content unique enough to rank highly in those search results. It also determines how much advertisers would pay to be next to that content.

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You may have heard that Call of Duty: Modern Warfare 2 sold nearly 5 million copies in North America and Britain on its first day of release last week—that’s $310 million in sales, what publisher Activision (ATVI) calls “the biggest launch in history across all forms of entertainment.”

Nevertheless, the game’s more noteworthy achievement is an artistic one: It’s a first-person shooter that plays as a tragedy, not a power fantasy.

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In the furthest reaches of India’s rural heartland, the cellphone is bringing something that television, radio and even newspapers couldn’t deliver: Instant access to music, information, entertainment, news and even worship.

Despite its rapid modernization, many of India’s 750,000 villages remain isolated except for the cellphone reception that now blankets almost the entire country after a decade of rapid expansion by operators. So in villages that don’t receive any FM radio stations, people have begun calling a number that has a recording of Bollywood tunes and listening to it on their headsets.

This primitive cellular “radio” service was used by close to 20 million Indians last year, phone company executives estimate.

“I call it the poor man’s iTunes,” says Mahesh Prasad, president of Reliance Communications Ltd., one of India’s largest cellular companies. “A villager waiting for a bus has nothing to do. When he wants to kill some time, this is the only entertainment media available.”

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International Business Machines (IBM) and a handful of other major marketers, including casino operator Harrah’s Entertainment and software giant Microsoft (MSFT), are experimenting with developing ad campaigns based in part on what consumers are chatting about on the Web.

For decades, advertisers have relied heavily on sometimes-dated consumer surveys and focus groups to provide grist for their ads. Now, some are using new technologies to scan the Web for key words to find out what consumers are–and aren’t–saying about their brands.

Then, they are incorporating those findings into their more-conventional research and using them not only to choose the overall themes of their marketing campaigns, but also specific text and photos for their ads.

Once the campaigns are up and running, the companies and their ad firms are using the same Web-scanning technologies to gauge consumer reaction to their messages, and to fine-tune them to boost performance.

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Videogames are serious business in China. The country’s online game market will reach 41 billion yuan ($6 billion) by 2010, accounting for half the global market, according to newly released data from Cnzz.com, a Beijing-based data analysis firm.

The Cnzz.com report says that almost two-thirds of China’s 338 million Web users are now online gamers. The online-game industry, which currently accounts for more than half of the total Internet economy, will see strong annual growth at a rate of 20 percent in future years, the report says.

The mainstream remains the awkwardly named sector of Massively Multiplayer Online Role Playing Games (MMORPGs). In October, six out of the 10 most popular online games in China are MMORPG games, according to the report. World of Warcraft by Activision Blizzard (ATVI) still tops the list with the most registered players and peak simultaneous online users. But the current government regulatory fighting over its Chinese license, held by Netease, may yet have a negative impact on the game, according to the report.

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Wikipedia.org is the fifth-most-popular Web site in the world, with roughly 325 million monthly visitors. But unprecedented numbers of the millions of online volunteers who write, edit and police it are quitting.

That could have significant implications for the brand of democratization that Wikipedia helped to unleash over the Internet–the empowerment of the amateur.

Volunteers have been departing the project that bills itself as “the free encyclopedia that anyone can edit” faster than new ones have been joining, and the net losses have accelerated over the past year. In the first three months of 2009, the English-language Wikipedia suffered a net loss of more than 49,000 editors, compared to a net loss of 4,900 during the same period a year earlier, according to Spanish researcher Felipe Ortega, who analyzed Wikipedia’s data on the editing histories of its more than three million active contributors in 10 languages.

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EarthLink (ELNK) email customers experienced outages over much of the weekend, according to numerous online complaints.

Starting Friday, Twitter users began to post updates about service outages. Alex Mendez tweeted “33:40 minutes on the cellphone dealing with TW / earthlink. UGH,” and Diane Fischler wrote, “Not getting email messages again. Woke up to about 60 left over from yesterday’s Earthlink outage, now seems to be down again. Who else?”

On Saturday and Sunday, EarthLink users continued to complain about their lack of service. Jim Rattray wrote: “#Earthlink email has been down for 24+ hours. ‘We’re aware and working on it.’ Not good enough,” while romeneskoblogs said, “I haven’t received Earthlink email since Friday night. Customer service rep (in India) said could be 72 hours b4 restored.”

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Once upon a time Second Life had a Twitter level of hype. Even those without a cartoon version of themselves couldn’t plead ignorance due to blanket coverage in newspapers and magazines.

Second Life is a virtual world started by the US firm Linden Lab in 2003, in which users design an avatar to live their “second life” online.

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One thing that strikes me about Chrome OS and Litl is that neither bother trying to do everything Windows or Mac OS X can do. Not even close. I don’t think either even bothers trying to serve as one’s primary computer.

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In what I must admit is a shocking turn of events, the Associated Press has moved beyond attacking Google (GOOG) and others it has branded as content “thieves” to embrace a page from its opponents’ playbook.

Literally.

In an internal AP memo obtained by Talking Points Memo, a senior managing editor, Mike Oreskes, states that when two AP reporters found that one bookstore had inadvertently placed Sarah Palin’s “Going Rogue” on sale five days before the official release date, “They bought a copy, ripped it from its spine and scanned it into the system so it could be read and electronically searched.

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