Yesterday Jane brought news of Google actively reaching out to game developers to partner with its Adsense/Adscape network. I just got word that San Francisco-based casual game ad network Mochi Media is partnering with London-based MyGame.com, a casual game site with a user-created flavor.

MyGame.com is also an offshoot of King.com, a truly gigantic game network that boasts 10 million active monthly users (according to a spokeswoman) that recently partnered with RealNetworks (RNWK). Mochi Media’s MochiAds division creates a revenue source for Flash game developers; it already has partnerships with massive casual hits like the beloved Desktop Tower Defense. MyGame has a comparable program in which developers can upload their games and — if the games prove popular — share revenue with the company. (More or less a YouTube-meets-casual games proposition, not unlike Kongregate.)

Where is all this going?

Hard to tell, but with Google (GOOG) sniffing around, there’s sure to be even more activity in this space — partnerships made, buyouts offered, startups launched, and so on. At the same time, it’s difficult to determine how much revenue can be generated from advertising linked to casual games.

As it happens, Gamasutra just published a great article on business models for Flash games featuring extensive conversations with Kongregate CEO Jim Greer and MochiAds CEO Jameson Hsu. While Hsu touts developers who make thousands of dollars monthly with Mochi, Greer emphasizes the modest income even at the upper level: “Let’s say Armor Games gives you a sponsorship for $2,000,” he says. “You get another $1,000 from ad revenue, another $1,500 from prize money, maybe Miniclip licenses your game for $5,000…you might make $10,000 to $15,000 on your Flash game — and that’s a really successful Flash game.” Greer prefers the model used by Electronic Arts’ (ERTS) casual game site Pogo, which gets ad revenue for their free games, but also charges a modest subscriber fee for added benefits. (About 1.5 million Pogo players out of some 13 million have paid that $40 yearly subscription.)

All in all, this reminds me of the tumult over YouTube and other user-created video sites from the last few years — before Google took out its checkbook. If that history is any guide, expect a lot of furious activity and money spent over this war for casual game eyeballs, followed by the industry’s morning-after question, “OK, explain again how we make money from all this?”

When it comes to DRM free music — that is, music not encumbered by copyright certain playback restrictions — the pitchers are still throwing their warm-up pitches. Nevertheless, there is a lot of excitement leading up to the game.

So far two major music labels — EMI Music and Universal Music Group — have decided to offer DRM free music. Others are still sitting on the fence for now. That hasn’t stopped new entrants from entering what is beginning to look like a very crowded market. Real Networks (RNWK), Amazon.com (AMZN) are among several companies that have already made DRM free music sales a priority.

New players, such as Cupertino, Calif.-based Navio Systems’ spinoff gBox, are launching music-download stores. gBox is planning on launching a content download site, starting off with DRM free music. More traditional retailers are getting in on the act as well; Walmart.com is making a renewed push and will start selling DRM free music.

The decision of record labels to sell DRM free music is indeed a blessing for music lovers, who until now have been forced to make choices based on their hardware and have subsequently been locked into using proprietary music formats.

Apple and its iTunes store have the biggest market share, and as a result have many consumers locked into Apple’s DRM. “DRM free music is going to help digital music expand from the iPod generation to the mainstream market,” says John McFarlane, CEO of Santa Barbara, Calif.-based Sonos Inc.

However, now you will be able to buy their music from any store, and play it back on a device of their choice. The jury is still out on where consumers will buy their music.

It would seem that this copyright-free music movement would threaten Apple and its iTunes monopoly. But it won’t and here’s why: First of all, a crowded market has always helped Apple, and there is no reason why it won’t be the case this time around. Two years ago I wrote Digital Music Services, Dot Bombs of Today. This is a repeat of that very same situation, except this time around there’s no DRM and so the music is more portable — any store, any device.

Except most of the devices that folks are buying are iPods.

Apple makes most of its money selling hardware, not music. Its hardware rivals have so far failed to come up with a device that rivals the iPod and hence it remains a preferred device of choice, at least in the Americas.

As long as iPod keeps selling well (no reason why it won’t), Apple also doesn’t have to worry about its music sales as long as it starts offering more DRM free music at a price that is similar to its DRM-protected tracks.

The iPod buyers end up installing iTunes software, and are taken to the store, where they are exposed to a relatively simple interface and a cleaner buying experience. It is still unmatched by other services, and I have tried them all: Napster, Real’s Rhapsody and, my favorite, eMusic.

The non-Apple players face a unique challenge: They are fighting over a business where profits are marginal at best. Of the 99 cents for which a song is sold, nearly 70 cents goes back to the record label. Music sellers are left with 30 cents or so and have to use that to build and operate their music stores. That would include costs for storage, CDNs and bandwidth.

If you factor in that the music sellers would have to market their services, and perhaps have to discount heavily to gain market share (Real is saying its customers will pay 89 cents per DRM track), profits are going to be hard to come by. And what happens when broadband service providers start offering access to music libraries for a monthly flat fee?

It is already happening in France, where competitive telecom and broadband provider neuf Cegetel has unveiled plans that let its subscribers pay an additional EUR 4.99 a month for access to the entire catalog of Universal Music Group’s 150,000 songs and 3,000 video clips. How long before others jump into the business?

Universal Music Group is conducting an experiment where it will offer a large part of its catalog DRM free for six months, except that it won’t be available on the largest digital download store of them all - Apple’s iTunes. The most-backward looking music company in business is still calling their decision “a test” and the fact that they are willing to forego sales from iTunes, tells us they are not exactly serious about offering DRM-free music. UMG recently made a decision not to sign a long term deal with Apple (AAPL).

Nevertheless, the cat fight between UMG and Apple is likely to give rivals such as Real (RNWK), WalMart and Amazon (AMZN) a boost. Real’s Rhapsody digital music service will soon start selling DRM-free albums and tracks as part of a six-month test with UMG, the world’s leading music company. Real plans to charge 89 cents per track for Rhapsody subscribers and 99 cents for non-subscribers.