The most popular topic for users of Yahoo Search this year was the Web’s largest file-sharing network. “Kazaa beat out heavy hitters like Harry Potter and Britney Spears to take top overall honors,” according to a statement on the site.

War in Iraq and rumors of cloned babies were the most popular news searches, while “American Idol” and “Survivor” continued to outlast their reality TV competition. The year also saw its share of scandals, with Rush Limbaugh, Michael Jackson, Kobe Bryant and Paris Hilton in the spotlight for searchers.

New MSN service

Microsoft will unveil elements of its latest MSN service Wednesday. Elements of the new service will be available for preview by clicking on a banner on the MSN home page, according to the company.

The update to the service includes “rich information, advanced communication tools and comprehensive security solutions,” according to a news release. Free streaming video, including news and sports, will be a part of the paid service, too. The formal launch of the new MSN is set for Jan. 8 and will be promoted in new TV spots featuring the same butterfly character used in previous advertising.

Hot sellers

Clothing, toys and video games, consumer electronics, videos, DVDs and books were the hottest items during the holiday shopping season. Total sales during the period, Nov. 1 to Dec 12, excluding travel, were $13 billion.

according to Nielsen/NetRatings. That’s a 46 percent increase over last year.

Online video sales

Online sales of video are expected to account for 7 percent of the category’s total dollars this year, according to a report by Jupiter Research. Within a few years, as the total business grows to $2 billion, online sellers will take 11 percent of the market. Jupiter advises the movie studios not to try to compete but to hire professional help.

“Most studios should link to a partner retailer from their movie sites,” the researchers advised. Netflix and Walmart.com are examples. Such firms, already in the business, are best equipped to handle customer service and fulfillment, the research report said, according to Internetretailer.com.

Online Film Critics

The Online Film Critics Association’s seventh annual awards competition includes 10 nominations for the latest Lord of the Rings film, “The Return of the King”. The OFCS (http://ofcs.rottentomatoes.com/pages/about), formed in 1997, gave six awards to the last Rings film, “The Two Towers,” in its 2002 contest. This year, “King” was cited in categories for best picture, best director and best cinematography. Winners of this year’s awards will be announced Monday.

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Phil Goldman passed away Christmas night. He was one of three former Apple Computer engineers who founded WebTV and sold it to Microsoft in 1997 for $425 million. The cause of the 39-year-old fitness buff’s death has not been reported. Goldman’s latest venture was Mailblocks Inc., an e-mail service designed to block spam.

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(c) 2003, MarketWatch.com Inc.

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AP-NY-12-30-03 1748EST