DISH Network and News Corp's satellite subsidiary NDS Group in California have been involved in an industrial espionage lawsuit for years now, but there was some big drama in court today: a hacker by the name of Christopher Tarnovsky (who used the handle "Big Gun," among others) testified that NDS hired him to create a device called "the stinger" that could reprogram DISH Network access cards. DISH lawyers say the plan was to flood the market with hacked cards, which would cost the satellite company $900M in revenue and repair costs. Unsurprisingly, NDS (which supplies DirecTV, among others), says that it hired Tarovsky only to reverse-engineer DISH's cards for competitive reasons, and Tarnovsky himself says that he believes "someone is trying to set him up." Sure, sure -- but no one's explaining why he was mailed mobile electronics from Canada with $20K in cash stashed inside, or why he was officially on the payroll of HarperCollins, a totally different NewCorp subsidiary, for more than 10 years. Sketchy sketchy -- and we thought satellite hacking was dead.

Read - Reuters article about Tarnovsky's testimony
Read - 2002 article about Tarnovsky and NDS

Yahoo's done its best to fend off Microsoft's aggressive advances until now, but it suddenly looks like the struggling company might be getting some help -- both the Wall Street Journal and Reuters are reporting that the Yahoo is "closing in" on a deal to merge with Time Warner's AOL division and partner up with Google on search advertising. Yeah, that's pretty major, and it would probably do something about those declining shares Microsoft's been making noise about. The idea is for Time Warner to sell AOL to Yahoo and make a large investment in the new company, which would probably be valued at around $10B. There's apparently a lot of work left to do on the deal, and it would still have to be approved by Yahoo and Time Warner shareholders, but it looks like Yahoo is no longer stuck taking Ballmer and Co. to the dance.

[Disclosure: Look up to the right. See that? Yeah, Engadget is owned by AOL -- but trust us, we have no idea what's going on.]

Read - WSJ article
Read - Reuters article