It’s oh-so enticing: you find a copy of a brand new game like Call of Duty: Modern Warfare 2 on a pirate site and the temptation to download it is too strong.

Well, that temptation may have cost up to 1 million users of Microsoft’s Xbox Live the ability to use that service. According to a report in InformationWeek, Microsoft has banned as many as a million players from Xbox Live for altering their consoles in order to play pirated versions of games.

This week, Activision’s new Call of Duty was released, and InformationWeek speculated that because pirated versions of the game appeared on various sharing sites in advance of the release, the game’s developer may have exhorted Microsoft to enact the bans.

“Xbox 360 consoles are equipped with digital rights management technologies designed to detect pirated software,” InformationWeek wrote, “but some players have successfully ‘modded,’ or modified, their machines to circumvent DRM protections.”

Even if someone has been banned, their Xbox will still play offline games, InformationWeek said. But it’s not at all clear if the bans are permanent or if Microsoft will allow those who have been booted from Xbox Live to return at some point down the line.

Microsoft did not immediately respond to requests for comment. But in a statement received by InformationWeek, the company said, “All consumers should know that piracy is illegal and that modifying their Xbox 360 console to play pirated discs violates the Xbox Live terms of use, will void their warranty and result in a ban from Xbox Live.”

And on the Xbox support page, Xbox Live Director of Programming Larry Hryb, aka Major Nelson, has addressed some of the circumstances that could lead to a player’s being banned.

“Players who find their Gamertags banned from Xbox Live have wound up in that situation due to violations of the Xbox Live Terms of Use,” Major Nelson wrote. “The Xbox Live team monitors players for not just cheating, but also for things like threats, racism, profanity, and just being an all around poor sport and ruining the game for others.

“When a Gamertag comes up as violating our policies for online behavior, the person who owns that Gamertag is punished by being banned from the service. Keep in mind, this isn’t just a ban on a particular game. This is a ban on the Xbox Live service as a whole, so you won’t be able to go online at all during your ban. Initially, you may be banned for a day, a week, or depending on severity, permanently! Kiss that $50 goodbye.”

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Since first releasing the Xbox nearly a decade ago, Microsoft (MSFT) has been targeting your living room. From videogames to film downloads to the coming Facebook add-on for their Xbox Live service, the software maker has rolled out features that aim to shorten the link between your computer and your TV set. Later this month, Xbox Live will feature another addition: a live game show.

On Nov. 19, Microsoft Game Studios is starting a new season of the multiplayer game show “1 vs. 100,” after a highly-popular demo version earlier this summer. The game is based on the popular show of the same name that started in the Netherlands and has since aired in more than two dozen countries. In the game and on the show, a randomly selected contestant must defeat “the Mob” of 100 other players to collect a cash prize.

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Netflix (NFLX) is suddenly one of the Valley’s hottest companies, as the DVD-by-mail company gradually morphs into everyone’s favorite streaming movie service. The service is showing up everyplace: on TiVo boxes, on the Web, on Xbox Live, in Blu-Ray disk players. The company reported blowout Q4 earnings earlier this week and provided a strong Q1 outlook. Netflix has become a hot counter-cyclical, nesting-in-the-living room recession play; the stock has doubled since late November.

Stifel Nicolaus analyst Scott Devitt thinks the rally has gotten a bit out of hand; he downgraded the shares this morning to Sell from Hold, asserting that fair value is about $28, or well below the current level.

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Will Microsoft offer Netflix movies over Xbox Live? Bloggers and reporters have been buzzing about the possibility of a partnership for almost a year, ever since Netflix CEO Reed Hastings joined Microsoft’s board of directors last March. But there have been other hints that the two were inching toward a more formal marriage.

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Recently, Nielsen/NetRatings revised the way it ranked top Web sites to include “time spent” in its ranking algorithm. I very much applaud this change, because it’s an extra level of information that will be circulated freely to give people additional ways to consider the rankings. When it comes to data, especially data for these sort of rankings that are used when making advertising decisions, more information flowing freely is definitely better, and incorporating information on how engaged visitors are with Web sites is a big improvement.

One of my major pet peeves is that marketers will seemingly always use bigger, less meaningful (or completely meaningless) numbers when very meaningful, but smaller, numbers are available. The beauty of this for Nielsen/NetRatings is that the bigger number for time spent in some cases, especially for AOL and Yahoo, is actually meaningful.

While I don’t agree with Nielsen/NetRatings’ decision to completely abandon the page view measurement, I do agree with the premise that page views are not always a reliable indicator. However, I’m a more-information-is-better information guy, so my preference would have been to include visitors, time spent and page views. If there are properties with very high page views and hardly any time spent at all–i.e., views that average one second per page, people will figure out what to do with that data.

All numbers referenced are courtesy of Nielsen/NetRatings and are for home and work panels in the U.S. for the month of May. Here is the release with the data tables.

I love that the data-measurement companies exist. What I don’t like is what often seems like unnecessary confusion these companies sometimes cause. In its press release Nielsen/NetRatings included two tables, and there are some things that don’t sit well with me.

In the top-10 ranking table, all AOL properties are rolled in together, and all Yahoo properties are, but YouTube is broken out of Google’s total. Since Google owns YouTube, this doesn’t seem like an apples-to-apples measuring and causes exactly the sort of BS confusion I hate to see bandied about.

For the month of May, Google properties (minus YouTube) had almost 20 million more unique visitors than AOL properties (110.2 million vs. 91.6 million), but even with about 20 million fewer visitors, more than three times as much time was spent on AOL properties (25 billion minutes for AOL versus 7.4 billion minutes for Google).

While Google is continuing to stomp on Yahoo with basically three times the volume, traffic and time spent for search, when comparing all of Yahoo’s properties to all of Google’s properties (minus YouTube), an interesting thing happens. Yahoo is very close to Google in total visitors (107.6 million), but visitors to Yahoo’s properties are much more engaged, spending more than twice as much time (19.6 billion minutes).

Disclosure: I had already thought Yahoo was not fairly valued relative to its massive scale and mostly on the strength of everybody, including my pal Kara Swisher beating up on those crazy kids in Sunnyvale so much, I recently purchased 1,000 shares of Yahoo in my IRA. (It’s currently underwater by about 30 cents a share, but I am looking at this as a 10-year-or-longer hold).

My first reaction to the new data was, “Wow, Facebook isn’t a top-10 property based on minutes, but MySpace with over 7.5 billion minutes is!”

I’m being sarcastic; I’m not at all surprised about Facebook not being in the top 10 in May. While I do not know how many billions (or even hundreds of millions) of minutes Facebook had in May, I know that according to Nielsen/NetRatings top-10 minutes for May, it was less than 2.1 billion (No. 10 You Tube). In fairness though, I’d predict if I had access to all the data, when the numbers for July are released in a couple of months, Facebook will have shown growth and MySpace probably won’t, though it’s much easier to have double-digit growth off a smaller base.

Some additional points I’ll wind up pondering a little:

• If I read the two tables correctly, there is hardly any usage at all in the Fox Interactive Media properties outside of MySpace. While I’m not surprised MySpace is by a large margin Fox’s biggest property, I am surprised that MySpace accounted for 96% of the overall minutes. May was television sweeps; this shows that relatively speaking nobody streamed “24″ or any of Fox’s other shows via Fox TV’s Web site. I suppose I’m not terribly surprised by that, either.
• Gamers are extremely engaged. Electronic Arts Online was No. 8 on the list with 3.5 billion minutes. The fascinating aspect of that to me is EA Online racked up all those minutes with only 8.5 million visitors. Contrast that with YouTube’s 2.1 billion minutes on 48.2 million visitors.
• How valuable is this list in terms of valuing the properties or making ad buys? The data are good to have, but beyond the top five or six properties, I’m not sure how useful this list is. Minutes and level of engagement matter, but when it comes to ability to sell advertising, reach (number of visitors) is still extremely critical.
• If, for example, EA Online’s numbers include access to its site via Xbox Live and its highly used forum discussions, that’s a lot of time spent on content that doesn’t include any advertising.

While the new measurement raises many questions, and it may take a while to get everyone on the same page, I view it as positive progress and think in many instances the minutes data are very useful–though again, I would still continue to include page views as well. More information, even if it includes inflated page-view numbers, is still better than less information.

Over time, these new measurements will help us better figure out how to value Web properties, but there are many things to beware of when it comes to “top 10” lists. Minutes aren’t the actual measure of value unless you can make money with those minutes, and even within this, one must be careful.

MySpace has huge minutes, but its ads are all by Google! Google is making money on MySpace, and MySpace (or Facebook for that matter) isn’t making nearly as much for its ads as AOL or Yahoo, because it uses a third party (the same is of course true for Facebook). Also, these rankings might lead one to believe that EA Online is a more valuable property than, say, ESPN or the New York Times, and I don’t believe that is true at all, though the numbers do indicate EA Online is probably more valuable than people had previously considered.

The numbers do help, but you’ll still need to think about them carefully.