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Friday, May 02, 2008, 03:55 pm PT (06:55 pm ET)

iTunes movies sold at loss; MBP display stripes; Microsoft and Yahoo

Apple is allegedly taking a hit on each iTunes movie sale to spur permanent downloads. Also, owners of recent MacBook Pros are suffering from vertical display stripes on their displays' backlights, Microsoft and Yahoo may be closing in on a merger deal, and Apple has issued two iPod updates.

Report: Apple taking loss on each iTunes movie

Apple's decision to offer movies through the iTunes Store on the same day as DVD releases came at a price, the Wall Street Journal claims.

Although the prices of movies will remain the same, the asking amount reportedly drops below the wholesale cost. A new release movie bought for $15 costs the iPod maker roughly $16, the newspaper says while pointing to an anonymous person as the source.

Apple is believed to be making the move partly out of frustration with the lackluster performance of its video service, which is considered the market leader but has failed to gain acceptance as quickly as its music counterpart.

Other video download stores and media devices, including Blockbuster-owned Movielink and Vudu's set-top box service, have also had an advantage by offering their downloads at the same time as physical copies, while Cupertino, Calif.-based Apple has at times been forced to wait as much as a month before it can sell a video title.

MacBook Pros plagued with backlight "stripe" issues

Owners of Apple's current-generation MacBook Pro models are encountering an intermittent problem with the backlighting on their devices, according to numerous reports in the company's discussion forums.

Users report an intermittent issue in which alternating vertical elements of the LED backlighting on the displays fail to activate after waking from sleep, creating a "stripe" effect of light and dark on the screen.

Most owners describe being able to resolve the problem until a later session by sleeping and then re-waking the system, while others note that the problem can be triggered by attaching or removing the power connector.

Apple technicians appear to be unaware of a widespread issue and are repairing systems on a case-by-case basis.

Microsoft, Yahoo said close to merger deal

After three months at an impasse, Microsoft and Yahoo today are rumored to be moving forward on discussions that would fold Yahoo into Microsoft.

The Windows creator is purportedly conceding to Yahoo in place of launching a hostile takeover attempt and will raise its offer by "several dollars" per share to placate the search engine developer's board of directors, which has been determined to either remain independent or else increase the value of the deal.

Nothing is certain, and talks may fall apart if the two companies are unable to reach an agreement, the New York Times alleges.

Microsoft has argued since announcing its plans that the buyout is necessary to combat Google's supremacy in online search and web advertising, which currently leaves Microsoft and Yahoo well behind in marketshare.

Apple currently has multiple deals in place with Yahoo, including Flickr access through the Apple TV as well as search and weather features on the iPhone and iPod touch.

Apple issues iPod classic, iPod Reset Utility updates

Two iPod-related updates have concluded Apple's week.

iPod classic firmware version 1.1.2 is available through iTunes and includes unspecified "bug fixes" for the hard drive-based media player.

Meanwhile, Windows users have been given iPod Reset Utility 1.0.4 (4.9MB), an update to software that restores any generation of iPod shuffle to factory defaults when iTunes is unable to do so itself.