According to the new Strategy Analytics Digital Media Index (DMI), revenue growth in global digital media resumed last quarter with 1.5% quarter-on-quarter growth in Q3 2008, up from minus 0.2% in the previous quarter but down from almost 7% growth in the same period last year. A milestone was reached in the quarter as twelve months of revenue in Apple’s ‘Music Related Products and Services’ segment—which includes iTunes—overtook revenues in Microsoft’s ‘Online Services Business’ segment for the first time. Among the five largest companies in the index, Amazon was the best performer while eBay was the worst.

On a trailing twelve months (TTM) basis, the Strategy Analytics’ Digital Media Index grew 4.3% in Q3 2008 to reach 156, equal to a 56% increase from the index base year, 2006. Nine companies managed to beat the quarterly index growth: Tencent Online (21.7%); Baidu (20.1%); Netease Online (12.1%), EA Digital (8.6%); Shanda (7.6%); Apple iTunes (7.4%); Google (6.7%); WMG Digital (6.2%); and NHN Online (5.2%) trailing twelve months growth in the quarter.

Jia Wu, Analyst at Strategy Analytics’ Digital Consumer Practice said, “While we saw a return to overall growth in the third quarter, it is still too early to talk about a turnaround as many of the leading companies in this index continue to show slowing quarter-on-quarter growth.”

Martin Olausson, Director of Digital Media Research at Strategy Analytics, added, “Although it is clear that the digital economy isn’t isolated from the offline world and the global financial crisis, the digital media sector has grown an impressive 26% in the last 12 months and should continue to outperform most offline sectors in the tough months ahead.”

Other findings from the Strategy Analytics Digital Media Index (DMI) Q3 2008:

• Baidu, the leading Chinese search engine, was the fastest growing digital media company on an annual basis with a stellar +118% growth in the last 12 months.
• Fox Interactive Media (FIM) was the fastest growing digital media company in the Western World with an impressive 40.7% growth in the last 12 months.
• Google saw continued growth slowdown in the quarter and has now suffered three consecutive quarters with slowing growth since the end of 2007.

Follow these guidelines from Kiplinger.com and your holiday shopping experience will be safer and less stressful.

1. Always use your home computer. Steer clear of public computers in a hotel’s business center, for example. They could have spyware that gives other users access to your financial information.

2. Look for the color bar or padlock at the bottom of the retailer’s Web site. That’s your assurance that the information you enter is encrypted so no one can copy it.

3. Type in the retailer’s online address rather than replying to an e-mail from the retailer. That will prevent you from being reeled in by a “phisher” using a fake e-mail and Web address that emulates a real site.

4. Create complex passwords and don’t use the same one for all your accounts. It’s particularly important to use a different password for your MySpace or Facebook account.

5. Use a password manager. This software, which is often free, makes it easy to store multiple passwords so that you have to remember only one master password. You can download a password manager at KeePass.com or other Web sites.

Make sure the site specifies the type of encryption. It should have the letters AES — for Advanced Encryption Standard — which tells you it meets the highest standard available. Also check the number of bits; the larger the number, the more secure the encryption. Currently 256 is the highest available.

6. Use a single-use credit-card number. Bank of America, Citibank and Discover offer these numbers to cardholders (Bank of America’s ShopSafe program is available only to its Visa and Mastercard account holders who bank online; its American Express cardholders can’t use the service). You receive a number that is linked to your account but is not your credit-card number. Discover and Bank of America let you use one number to make multiple purchases from the same merchant. Citi’s virtual account numbers can be used only once.

7. Consider using an alternative payment service, such as Bill Me Later or eBillMe, if your credit-card issuer does not offer a single-use number. EBillMe is available to anyone who banks online. You merely have to register the service as a payment option. Then, when you have finished shopping and are checking out, you enter eBillMe as the payee and receive an e-mailed copy of the bill.

myYearbook is now the fastest-growing online social network in the United States.  comScore says that it is now the 14^th largest site in the US as measured by page views and the 19^th largest site as measured by total minutes spent.

Logging more than 1.5 billion page views and 792 million minutes spent online in September, myYearbook surpassed internet destinations such as Amazon, ESPN, and Wikipedia and continues to grow. The site, founded by two NJ high school students, boasts 256% year over year growth as of August according to Hitwise (data based on custom category of social networking websites), another leading provider of competitive internet intelligence.

“The secret to our growth is our integrated suite of applications that resonate with our members,” reports Catherine Cook, teenage cofounder of myYearbook. “We offer our users a unique online experience ranging from the ability to engage in social games like Battles and Owned to donating to their favorite charities through Causes.”

myYearbook currently adds 40,000 new members per day to its user base of 11 million members, and is one of the most engaging social media destinations on the web with members logging in 8 times per month and spending, on average, 30 minutes per visit to the site.

“The latest comScore data demonstrates that we are well on our way to becoming the largest social media space on the web,” says Geoff Cook, CEO of myYearbook.

Amazon.com announced that, subject to closing conditions, it has reached an agreement to acquire AbeBooks. AbeBooks is an online marketplace for books, with over 110 million primarily used, rare and out-of-print books listed for sale by thousands of independent booksellers from around the world. I do wonder if Amazon plans to integrate ebooks into the AbeBooks marketplace in order to gain additional traction for its Kindle product.

“As a leader in rare and hard-to-find books, AbeBooks brings added breadth and expanded selection to our customers worldwide,” said Russell Grandinetti, vice president of books for Amazon.com. “AbeBooks provides a wide range of services to both sellers and customers, and we look forward to working with them to further grow their business. We’re excited to present all of our customers with the widest selection of books available any place on Earth.”

“This deal brings together book sellers and book lovers from around the world, and offers both types of customers a great experience,” said Hannes Blum, chief executive officer of AbeBooks. “We are very excited to be joining the Amazon family.”

The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to close before the end of the fourth quarter of 2008.

AbeBooks will continue to function as a stand-alone operation based in Victoria, British Columbia. AbeBooks will maintain all of its websites, including its Canadian website with Canada-specific content, such as reviews of Canadian-authored books and interviews of Canadian writers.

PayPal announced that its PayPal Mobile application for iPhone and iPod Touch will be available from the Apple App Store at launch today. The free download will enable iPhone and iPod Touch users to send money to friends and family quickly via their PayPal accounts.

“The iPhone is a great platform for PayPal,” said Jack Stephenson, Senior Vice President of Strategy and New Ventures. “This new application makes it easy and fun to send money to anyone with just a few screen touches.”

PayPal is the leader in safer online payments with more than 60 million active accounts in 190 markets around the world. This global reach, paired with the international popularity of the iPhone, will enable a safer and easier way to send mobile payments. Users can send money to anyone in their contact list, eliminating the need to remember email addresses and phone numbers. Users can also check their account balance from anywhere, and use the “quick pay” feature to bypass the payment review page and send money even faster.

I’m sure that this application will also come in handy with the eCommerce apps that are being built into the iPhone platform. You won’t have to worry about whipping out that credit card anymore and worry about the cell payment gateway security system. I’m glad to see this application, it was needed to legitimize several of the sell through apps that I liked.

At a startup dinner this week, Youtube CEO, Chad Hurley, announced that Youtube is close to implementing their direct response marketing units.  This is not a surprise since Venturebeat’s MG Seigler broke this story in February of this year.  However it does appear that we are close to seeing this program go live.  And it made me consider a higher level question, “Is Youtube goint to go open?”  Integrating the API’s from iTunes and Amazon could simply be a testing ground for a larger scale developer platform that would allow for ANYONE to integrate their API’s into the Youtube platform in order to develop additional monetization and engagement components.

Before Facebook opened their platform to everyone they first had test applications that utilized the system to ensure that it was scalable.  At the end of the day, video content management is built upon metadata which can be treated just like any type of data, which means that developers could connect information supplied by the content creator with their own application.

Here is a quote from Google’s CEO, Eric Schmidt, and I believe he may be hinting at the eventual opening up of the Youtube platform to developers,

“We believe the best products are coming out this year. And they’re new products. They’re not announced. They’re not just putting in-line ads in the things that people are trying. But we have a number — and, of course, Google is an innovative place. The Yahoo! team are trying various new forms of advertising, ones which are much more participative, much more creative, much more — much more interesting in and of themselves. Google believes that advertising itself has value. The ads literally are valuable to consumers. Not just to the advertisers, but the consumers.”

His mention of new products that are more innovative than in-line ads makes me believe that they will live by one of the Google ten rules: “4. Democracy on the web works.”  I could be going out on a limb, however I have to think that Google is too far on the cutting edge to only allow for Amazon and iTunes affiliate partnerships.  If they wanted to sell DVD’s and MP3’s they could have very easily closed direct deals with labels and studios.  Their traffic by itself would have made them a considerable force in the digital distribution business overnight.  The fact that they are integrating API’s from third party applications makes me truly believe we are close to an announcement of them opening up.

If Youtube would open their platform to developers they would be able to gain a dramatic portion of their already dominant market share in the online video business.  If community members could add applications that “spoke” to the videos it would make for a next generation video experience.  I’ve called for this type of platform integration, however no one has been able to do it successfully yet, Youtube might be the first.