How would this help Italian government? All income would flow up to the US and get eventually taxed there.

As is the case with other products and services from other countries. Tax the local businesses that are benefitting from the ads and services.

Umm..this is too stupid to argue with, sorry.

Good point. Could you please remind us why this hasn't been done yet? Or where done?

Because then people who own the companies would simply keep the income in the company, and have the company pay as much of their expenses as possible as "business expenses." Essentially, they would get the benefits of the income without anyone actually paying taxes on it. The company would distribute the profits only when absolutely necessary.

Note: this scenario has already been envisioned by tax advisers. Common solutions include either converting corporations to flow-through entities for income tax purposes, or levying penalty rates of income tax on undistributed profits.

That already happens. It's fraud, and we have enforcement against it.