Marriage of Mobiles, Land Lines?

British Telecom offers a new cell phone to capture the best of both worlds. A California court rules that Borders must pay internet sales tax.... Yahoo acquires VoIP provider DialPad.... and more.

British Telecom unveiled its attempt to bridge the land line and mobile phone divide, launching BT Fusion -- a handset that operates on both networks.

The telecommunications company promised callers the "best of both worlds" from the cell phone-like handset that operates as a mobile outside and automatically switches to a broadband line once users enter their homes or offices.

The company is banking on BT Fusion to attract customers by combining the convenience of a cell phone with cheaper fixed-line prices. BT Fusion is part of the company's "new wave" services as it tries to entice customers to return from rival cell phone providers.

Subscribers will have to have both a BT (BT) land line and access to BT broadband. A special access point installed in the home, called the BT Hub, will switch the handset to a broadband line using Bluetooth wireless technology.

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Death and taxes: An appellate court ruling against Borders sets a precedent that could enable California to force some major internet retailers to start paying state sales tax for books and music sold online to state residents.

Whether California tax collectors use the precedent to go after not only Borders (BGP) but Barnes & Noble (BKS) and Amazon.com (AMZN) remains to be seen. But independent booksellers have been cheering, saying the ruling should remove their internet competition's unfair advantage.

Businesses can avoid paying sales taxes to states where they have no physical presence, according to a 1992 U.S. Supreme Court ruling.

Borders says it has never collected sales tax for books and music sold over the internet to California residents, even though the corporate parent, based in Ann Arbor, Michigan, operates 129 California stores under the Borders and Waldenbooks brands.

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Rocking phones: Yahoo said it has acquired DialPad Communications, a 6-year-old company whose software lets people place calls over the internet for a fraction of the cost of regular telephone service.

Yahoo (YHOO) will use DialPad to expand its product array in the burgeoning niche of Voice over Internet Protocol, or VoIP.

DialPad, which has about 40 employees, competes with a growing number of startups that reroute calls from computers to servers to telephones.

Depending on the subscription plan, DialPad charges as little as 1.7 cents per minute for calls, including international calls to more than 200 countries. DialPad subscribers can also buy a prepaid VoIP calling card. The company has been offering calling plans for about two years and has more than 14 million users.

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Settling up: Web marketer Intermix Media said it has agreed to pay $7.5 million over three years to settle a New York lawsuit accusing the company of surreptitiously installing software on computers.

Intermix (MIX) said it reached "an agreement in principle" and expects to formalize a settlement within the next few weeks.

But New York Attorney General Eliot Spitzer's spokesman Brad Maione said that there was no agreement and that the investigation and negotiations with Intermix continue.

Spitzer filed the civil suit in April in a campaign against the fraudulent or nuisance-filled applications that he has said hurt internet commerce. Spitzer charged Intermix with secretly installing "adware" -- software that delivers pop-up advertisements or similar promotions.

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Compiled by David Cohn. AP and Reuters contributed to this report.