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  • Internet Sales Tax Returns to Congress; eBay Makes Their Case

    Internet Sales Tax Returns to Congress; eBay Makes Their Case

    eBay’s Todd Cohen made a spirited plea to the House of Representatives Committee on the Judiciary earlier today against the proposed remote sales tax. Were the proposal to pass, Cohen fears that small businesses will suffer the most and, given that small businesses are a thriving market for eBay, they’re right to look out for the little guys. Cohen also voiced his and eBay’s support for H. Res 95, which would protect Internet entrepreneurs and small businesses from the new tax proposals.

    In defense of small businesses and what they stand to lose, Cohen explained :

    The share of online sales being done by retailers with less than $20 million in sales is falling. Under the current mix of business costs, including the remote sales tax rules, the small business competitors are not taking over the field. Instead, it is the largest retailers that are growing. And not surprisingly, those giant retailers are lined up united in proposing a change in remote sales tax law that will harm the smaller retailers who do not have national physical presence. If small business retailers using the Internet were gaining unfair advantages from current remote sales tax laws, one would expect that their share of Internet sales would be growing. But it is not.

    Although Cohen did not identify Amazon.com by name, it’s probably the internet’s worst kept secret that he likely had them in mind as he made these pointed statements. Additionally, Cohen suggested a Small Business Exemption that would reduce the tax burden on small businesses:

    A real Small Business Exemption would protect small retailers who are already falling behind. Permanently protecting small business retailers from national remote sales tax collection burdens will promote new retail competition. … Protecting small business from burdens that will undermine their growth and even directly promoting small business operations is not a new or novel concept. There has traditionally been bipartisan support for small business promotion.

    Cohen’s full congressional statement can be read below.

    Amazon, alternately, has come out in favor of the online sales tax bill. From their official statement:

    Amazon strongly supports enactment of the Enzi-Durbin-Alexander bill and will work with Congress, retailers, and the states to get this bi-partisan legislation passed,” said Paul Misener, Amazon vice president, global public policy. “It’s a win-win resolution – and as analysts have noted, Amazon offers customers the best prices with or without sales tax.

    If enacted, the Enzi-Durbin-Alexander bill will allow states to require out of state retailers to collect sales tax at the time of purchase and remit those taxes on behalf of customers, and it will facilitate collection on behalf of third party sellers. Thus, this bill will allow states to obtain additional revenue without new taxes or federal spending and will make it easy for consumers and small retailers to comply with state sales tax laws.

    It’s hard to rationalize Amazon’s position given the points that Cohen made today. More interesting is Amazon’s volte-face on taxes for online commerce. Amazon certainly would suffer the brunt of more taxes easier than small businesses. Whose side are you on? Amazon or eBay? Or is this one situation where every party involved stands to take a loss?

    UPDATE: Shortly after this story was published, Ashley Morris, CRC Public Relations with Amazon.com, contacted WebProNews and delivered the following statement. It is the testimony given earlier today by Paul Misener, Vice President for Global Public Policy, Amazon.com:

    Testimony of Paul Misener, Vice President for Global Public Policy, Amazon.com
    Hearing on the Constitutional Limitations on States’ Authority to Collect Sales Tax in E-Commerce
    Before the Committee on the Judiciary, United States House of Representatives
    November 30, 2011
    [Also available at www.amazon.com/pr]

    “Thank you, Chairman Smith and Ranking Member Conyers, for inviting me to testify. Amazon has long supported an even-handed federal framework for state sales tax collection and, to that end, we have participated in the Streamlined Sales Tax Project for over a decade, and we are pleased to participate in this hearing. Amazon strongly supports enactment of a federal bill with appropriate provisions.

    Mr. Chairman, Congress – and only Congress – may, should, and feasibly can authorize the states to require out-of-state sellers to collect the sales tax already owed.

    At the Philadelphia Convention, which the Founders convened principally to consider the challenging issue of trade among the states, Congress was granted exclusive power to regulate interstate commerce. Exactly two centuries later, in 1987, North Dakota challenged this exclusivity and, following five years of litigation, the U.S. Supreme Court held in Quill v. North Dakota that requiring out-of-state sellers to collect tax would impose an unconstitutional burden on interstate commerce. The Quill court also confirmed that Congress eventually could “disagree with our conclusions” and that this issue is “not only one that Congress may be better qualified to resolve, but also one that Congress has the ultimate power to resolve.”

    Far from an e-commerce “loophole,” the constitutional limitation on states’ authority to collect sales tax is at the core of our Nation’s founding principles. For this reason, Amazon has steadfastly opposed state attempts to require out-of-state sellers to collect absent congressional authorization.

    Mr. Chairman, Congress should authorize the states to require collection, with the great objects of protecting states’ rights, addressing the states’ needs, and leveling the playing field for all sellers.

    States’ rights should be protected. States need the freedom to make their own revenue policy choices. For example, Texas has chosen to eschew personal income tax, and that decision makes the Texas budget particularly sensitive to uncollected sales tax. The right of Texas to make this policy choice effective should be protected. Congress should protect the states’ rights, and authorize them to require collection of sales tax revenue already owed, and doing so would not violate pledges that are limited to questions of income tax rates and deductions.

    The states’ financial needs should be addressed. The states face serious budget shortfalls, yet the federal government faces its own fiscal challenges. Congress should help address the states’ budget shortfalls without spending federal funds, by authorizing the states to require collection of the billions of revenue dollars already owed.

    Fairness among sellers should be created and maintained. Sellers should compete on a level playing field. Congress should not exempt too many sellers from collection, for these sellers will obtain a lasting un-level playing field versus Main Street and other retailers. Congress should rectify the current imbalance and avoid a future imbalance.

    Mr. Chairman, Congress feasibly can authorize the states to require collection. The facts in the Quill decision arose a quarter of a century ago, and the Supreme Court’s decision was rendered a year before the World Wide Web was invented. With today’s computing and communications technology, widespread collection no longer would be an unconstitutional burden on interstate commerce, and Congress feasibly can authorize the states to require all but the very smallest volume sellers to collect.

    Much attention has been paid to the size of a “small seller exception” threshold in federal legislation – and rightfully so. Such a threshold, which would exempt some sellers from a collection requirement, must be kept very low to attain the objectives of protecting states’ rights, addressing the states’ needs, and creating fairness among sellers.

    In this context, several kinds of small volume sellers must be considered.

    Foremost are the Main Street small business retailers who, unless the small seller exception threshold is kept very low, will forever face an un-level playing field compared to a newly-created exempt class of out-of-state sellers.

    Next are the online advertising affiliates, tens of thousands of whom have lost jobs or income as the result of ineffective, counterproductive sales tax laws recently enacted in a half-dozen states. Congress should act to make such laws uninteresting and irrelevant to the states – and thereby immediately restore the lost jobs and income – by authorizing the states to require collection.

    Small volume online sellers have received most of the attention, and not without reason. No one wants these sellers to shoulder alone burdens compared to those faced by the small business retailers who already collect sales tax in our local communities. Yet no one should want these online sellers to take advantage of a newly-created un-level playing field over small Main Street businesses, and no one should want government to pick business model winners and losers this way.

    The consequences of the threshold level to states’ rights, the states’ needs, and fairness are very significant, because a surprisingly large fraction of e-commerce is conducted by smaller volume sellers. For example, nearly 30% of uncollected sales tax revenue today is attributable to sellers with annual online sales below $150,000, and only one percent of online sellers sell more than this amount. In other words, a $150,000 exception would deny the states nearly 30% of the newly-available (yet already owed) revenue, but would exempt from collection 99% of online sellers. Any higher threshold would deny the states even more revenue and keep the playing field even more un-level.

    Fortunately, today’s computing and communications technology will allow all online sellers to collect and remit tax like Main Street retailers.

    Large volume online sellers already have and use this technology. Amazon and Overstock, for example, collect tax on sales to consumers in states where our retail businesses have nexus. And the online arms of large multichannel retailers collect in the states where they have retail stores. Quite obviously, state sales tax can be collected nationwide, at least by larger volume sellers like Amazon, Overstock, and the multichannel stores, for they have the technology.

    This technology is not limited to large sellers. Rather, service providers also make the technology available to medium and small volume sellers. Thus, collection is either by sellers or for sellers. There are many service providers already: ADP, Avalara, and FedTax, for example.

    Two other examples come to mind: Amazon and eBay.

    Both companies use sophisticated computing and communications technology to serve their seller customers. But, while Amazon is prepared to make its technology available as a service to help sellers by collecting sales tax for them, eBay seeks to avoid any role in collection, claiming that small volume sellers will be burdened and, implicitly, that eBay’s technology is not capable of helping its largest sellers to collect. And these claims are made despite the fact that eBay manages to collect the transaction fees it charges its sellers, and despite the fact that eBay already calculates state sales tax for eBay sellers, all the way down to the local jurisdiction level. Amazon and many other service providers will help smaller online sellers collect; surely eBay can as well.

    In conclusion, Mr. Chairman, Congress may, should, and feasibly can attain the objectives of protecting states’ rights, addressing the states’ needs without federal spending, and leveling the playing field for all sellers – but only if any “small seller exception” is kept very low.

    The time to act is nigh. Amazon is grateful for this hearing, and we look forward to working with you and your colleagues in Congress to pass appropriate legislation as soon as possible.

    Thank you. I look forward to your questions.”

  • Amazon Updates Kindle Fire, Breaks Rooting

    Amazon Updates Kindle Fire, Breaks Rooting

    Late last night Amazon released version 6.2 of the Android-based operating system for their new and popular Kindle Fire tablet. Surprisingly, they neglected to include a change log identifying new features of the software. Reports indicate that the update provides better touchscreen responsiveness and a few other updates that improve the overall user experience.

    A couple features of the update, however, have people talking. First, the update was installed automatically for most users. That is, they were not given the option of delaying or declining the download. Second, the update wipes out the modifications made by users who have rooted their devices. Rooting, roughly equivalent to jailbreaking in the iPhone world, allows users to make changes to the operating system beyond those allowed by the manufacturer. In the case of the Kindle Fire tablets, it allows access to the Android App Market, in addition to Amazon’s own App Store. Version 6.2 of the Kindle Fire operating system removes any modifications made to rooted devices, as well as removing access to the App Market. In some cases it even appears to be removing apps downloaded from the App Market.

    Some Twitter reactions to the update focus on the improvements in functionality.

    A couple of minutes using it, and the new Kindle Fire update definitely makes me feel a significant improvement in terms of responsiveness. 43 minutes ago via TweetCaster for Android · powered by @socialditto

    Apparently the Kindle Fire 6.2 update fixes touchscreen woes. Hope latency is better and filtering on finger up is now unrequired… 11 hours ago via web · powered by @socialditto

    Other users reacted against the update’s impact on rooted devices, and the stealthy way in which Amazon delivered it.

    Wow, not even Apple has gone this low. Forced update of OS? Big no no. http://t.co/XwgjkeOV 1 hour ago via Safari on iOS · powered by @socialditto

    oh come on now amazon… an auto-update to de-root the fire? http://t.co/cirrXpYw via @gizmodo #amazon #kindlefire 51 minutes ago via web · powered by @socialditto

    Users who have rooted their Kindle Fires need not be too worried, however. Unlike Apple, which routinely changes iOS to make jailbreaking more difficult, Amazon appears not to have made any effort to prevent users from re-rooting their devices, making the change little more than an inconvenience to those users. The question remains, however, as to whether future updates will take a more aggressive stance toward rooted devices.

    The Kindle Fire, which released just two weeks ago, is thought to be responsible for the record Black Friday sales Amazon reported for the Kindle family of devices this year.

    What do you think about Amazon’s secret update? Should they have left rooted devices alone? Let us know in the comments.

  • Kindle Fire Is Amazon’s Best-Selling Product

    Kindle Fire Is Amazon’s Best-Selling Product

    Amazon is sending around emails marketing its recently launched Kindle Fire tablet. According to the subject line of that email, the Kindle Fire is already the company’s bestselling item on Amazon.com.

    Kindle Fire Ad

    When it launched, it was almost guaranteed to be a big seller with the Kindle brand behind it, as well as the $199 price tag – much more affordable than the iPad (granted, you get what you pay for).

    The holiday season has already provided a tremendous boost to the Kindle Fire’s sales.

    “This was a great Black Friday for Target and for Kindle Fire, which was the bestselling tablet in our stores on Black Friday,” said Nik Nayar, vice president merchandising, Target. “We’re excited so many guests chose Target as their destination for the new family of Kindle devices and we’re sure Kindle Fire will continue to be at the top of wish lists this holiday season.”

    “We knew Kindle Fire and the new E Ink Kindles would be highly desirable gifts this holiday season,” said Wendy Fritz, senior vice president of Computing, Tablets and e-Readers at Best Buy. “If this Black Friday was any indication, they are only getting hotter as we get into the shopping season.”

    We’re still waiting on Amazon to release its Cyber Monday numbers, but there’s no reason to think the Kindle Fire didn’t continue to be a hot seller on the site.

    It’s worth noting that even though Amazon runs its own version of Android on the Kindle Fire, and that Google and Amazon are becoming bigger competitors, getting Android in that many more hands (particularly in tablet form) has to be a good thing for Google.

  • Amazon, Apple Had A Great Black Friday

    Amazon, Apple Had A Great Black Friday

    By all early reports, this year’s Black Friday was a huge day for the retail community. And it was an enormous day for online sales. comScore’s report said that Black Friday online sales totaled a whopping $816 million – a figure that sets it apart from any other shopping day this year.

    Those sales dwarfed 2010’s Black Friday online sales – a jump of 26% year-over-year. Over 50 million Americans participated in online shopping last Friday.

    And at the top of the list of retailers that benefited from the online shopping push is Amazon. The comScore report indicates that Amazon beat out Walmart and Best Buy to be the top online retailer on Friday. Amazon has just released some information on that day’s sales – and the Kindle reigned supreme.

    According to the release, Black Friday 2011 was the best ever for the Kindle. Kindle sales apparently increased fourfold year-over-year.

    “Even before the busy holiday shopping weekend, we’d already sold millions of the new Kindle family and Kindle Fire was the bestselling product across all of Amazon.com. Black Friday was the best ever for the Kindle family – customers purchased 4X as many Kindle devices as they did last Black Friday – and last year was a great year,” said Dave Limp, Vice President, Amazon Kindle. “In addition, we’re seeing a lot of customers buying multiple Kindles – one for themselves and others as gifts – we expect this trend to continue on Cyber Monday and through the holiday shopping season.”

    They also said that the new Kindle Fire tablet remained the top selling item on the site, a title it has held since it was introduced back in September.

    Amazon wasn’t the only online retailer selling tablets on Black Friday – Apple, as you probably know, had a big Black Friday sale this year. Naturally, a “big sale” for Apple is different than a “big sale” for other retailers. But Apple’s offerings included $100 off certain MacBooks and a few dozen dollars off the iPad 2 and iPod Touch.

    But apparently, it was enough to get people shopping – both online and in stores. According to a source inside Apple, the company had it’s best retail sales day ever. From 9to5Mac

    Apple Retail was forecast and broke Retail sales records all over the country today, this is from [redacted] today, the forecast today is more than 4 times what we normally do. We broke the forecast by 7pm.

    Reports suggest that Cyber Monday (the newer shopping holiday devoted to online shopping, taking place today), could see over 1 billion dollars in online purchasing. There’s no doubt that both Amazon and Apple will be huge parts in that total.

    Are you participating in this giant shopping week? Let us know in the comments.

  • Amazon Gets In On the Penny Smartphone Sales, Too

    Amazon Gets In On the Penny Smartphone Sales, Too

    Last week, it was announced that AT&T would be holding a Black Friday sale, offering an array of phones for the low, low price of one penny. Of course, there are stipulations involved including a two-year contract and the acceptance of a data plan. Apparently, one cent smartphones are the trend of the day-after-Thanksgiving sales, because Amazon is in on it, too.

    Over at Amazon Wireless, the details of the sale are discussed, which are as follows:

    For a limited time only, all phones from Verizon, Sprint, and AT&T with a new line of service are on sale for a penny and include standard FREE Two-Day Shipping. Offer valid between midnight PDT November 21, 2011, through 11:59 p.m. PDT November 28, 2011, while supplies last. Plus, if you buy an eligible hotspot-ready smartphone and activate the hotspot feature, you’ll get a $100 Amazon.com Gift Card.

    There are a number of Android-powered handsets as well as BlackBerry. However, for those of you wanting to grab a new iPhone 4S during Amazon’s sale, sorry, no Apple devices are included in the one cent blowout. That being said, the DROID RAZR 4G (from Sprint) is available, as is the BlackBerry Torch. The HTC Thunderbolt falls into Amazon’s sale, and there are a few Samsung handsets as well.

    Basically, Amazon’s smartphone sale carries just about every phone except the iPhone. If Amazon’s list is comprehensive, there are almost 97 phones featured in during the one cent sale, which, according to Amazon’s disclaimer, is “valid between midnight PDT November 21, 2011, through 11:59 p.m. PDT November 28, 2011, while supplies last.”

    Phones purchased during the sale are required to have a two-year contract, which is the same stipulation issued for AT&T’s one cent sale. As for the iDevice family, Apple is also having a Black Friday sale. Unfortunately, there are no one cent iPhones or iPads, although, the tablets are scheduled for an apparent markdown.

  • Could An Airport Scanner Ruin Your Kindle?

    Could An Airport Scanner Ruin Your Kindle?

    Apparently, you should be careful this holiday season when you travel with your Kindle. According to reports from users, something is ruining their electronic ink displays when they pass through security.

    The Telegraph claims that multiple users have reported their devices going wonky after passing through the X-ray scanners at airports. One such user said that after his Kindle took a ride through a scanner in Madrid, the display was permanently affected. He said that he was using the e-reader to read a book just before this, so it has to be the scanner.

    Could X-rays be damaging Amazon’s Kindle e-ink displays?

    According to a Cambridge professor quoted in the report, probably not. He says that a build up of static electricity could actually be what’s messing with the Kindles. He says that the low level of radiation used in airport scanners is unlikely to be able to cause the type of damage that people are reporting.

    Here’s what Professer Daping Chu had to say:

    But you can get a build up of static inside these machines, caused by the rubber belt rubbing. If that charge were to pass through a Kindle, it’s conceivable that it could damage the screen. A static charge from an airport scanner could be 100 volts or more. That could permanently stick the particles to the screen.

    It shouldn’t surprise you that Amazon has denied these allegations. They claim that the X-ray scanner machines pose no threat to their e-readers.

    Exposing your Kindle to an X-ray machine, such as those used by airport security, should not cause and problems with it. Many Kindle users travel by air, and their Kindles are screened by airport security every day without issue.

    That’s true. This is the first we’ve really heard of anything like this and the e-ink displays have been in use for quite some time. It’s possible that people’s bags could protect the devices. Maybe the people reporting problems put their Kindle directly on the belt.

    The users claim that Amazon is quietly replacing the Kindles that are being damaged.

    Could there be a Kindle-killer out there in one of the most popular places to take a Kindle? It looks like it’s at least a possibility. One would think that if this were 100% accurate, there would be more stories about this happening than we’d know what to do with. But if I had a Kindle, I’d probably proceed with caution next time I’m flying.

    Has anything like this happened to you? Let us know in the comments.

  • 4 Video Platforms You Need To Start Thinking About

    When you think of online video, more than likely you think of YouTube. That does make sense, seeing how they’re in the leadership position. But, have you ever wondered what the other platforms are that you need to be familiarizing yourself with?

    Is online video more than just YouTube? What do you think?

    WebProNews caught up with the CEO of Revision3, Jim Louderback, at the Blogworld Expo in L.A. where he discussed his optimism in regards to the future of online video. He told us that there were 4 major platforms that people need to be thinking about in terms of online video.

    The first is, obviously, YouTube. The video giant is just that – a giant. It has created multiple opportunities for people in the online video space and, with its latest move, hopes to create more. Last month, the company announced that it was adding more than 100 channels of original content from media companies and celebrities including the Wall Street Journal and Madonna.

    According to Louderback, these new channels will raise the bar of professionalism on YouTube. In addition, he believes they will raise the “perceived value” for advertisers. He thinks that YouTube will package this new content with the big online video players, such as Revision3, in order to build itself into a multichannel bundle similar to Comcast or Viacom.

    However, Louderback told us that, even though YouTube is the “next big platform as TV gets disintermediated,” there are other platforms that need to be focused on as well. Secondly, he believes that Apple should be taken seriously as a video platform because Apple developed iTunes, which produced podcasts and multiple online video outlets. He suspects that they’re working on “something” else as well.

    “When Apple does ‘something,’ things happen,” Louderback points out.

    The third platform that Louderback thinks people should be acknowledging is Microsoft. Already its Zune product runs content across Xbox and Windows, and with its new Metro OS rolling out soon, Louderback sees this content coming to phones, tablets, PCs, and potentially, TVs.

    Lastly, he thinks that Amazon belongs in the video platform game. He told us that Amazon’s Kindle Fire would be the biggest selling consumer electronic device and that it would “revolutionize the way we consume media.”

    Although he didn’t categorize it as a platform yet, Louderback hinted that Facebook could become a potential player going forward.

    Do you agree with Louderback that these other companies are video platforms that we need to pay attention to? Let us know.

    For 5 years, WebProNews has partnered with BlogWorld and New Media Expo, the world’s first and largest new media conference, in an effort to broadcast how new media can grow your business, brand, and audience. Stay tuned to WebProNews for much more exclusive coverage.

  • Apple: Amazon Is Guilty Of False Advertising Too

    Apple: Amazon Is Guilty Of False Advertising Too

    Apple has been involved in a beef with Amazon over the use of the term “App Store” since March of this year. Apple’s original trademark lawsuit claimed that they owned the term “App Store,” having applied for the trademark in 2008 after launching the store for their iPhone.

    Amazon battled back, saying that the term “App Store” was simply too generic to be trademarked – that it just describes a store that sells apps. The Amazon App Store for Android launched anyways, much to the chagrin of Apple. In July, a judge denied the injunction and allowed Amazon’s store to remain active.

    Now, Apple has amended the lawsuit to include charges of false advertising, particularly pertaining to the recent launch of Amazon’s new tablet, the Kindle Fire.

    Apple says that Amazon purposefully started “de-emphasizing” the “for Android” part of the “Amazon App Store for Android” in order to bank of the popularity of the Apple App Store.

    Beginning in or about September 2011 Amazon began altering its useof the infringing mark by omitting or de-emphasizing the use of the “for Android” suffix to the “Amazon Appstore” phrase. For example, when Amazon announced in late September 2011 that it would introduce a new hardware product named the Kindle Fire(the “Fire”), Amazon promoted the Fire’s ability to use Amazon’s mobile software download service but omitted the “for Android” phrase when using the APPSTORE mark.

    The brief even provides screenshots to back up their point. In this one, you can see the Kindle Fire being promoted as having the “Amazon Appstore.”

    If you look at the Kindle Fire’s page on Amazon currently, the word “Appstore” doesn’t appear – instead we have “Thousands of popular apps and games.”

    The updated filing also provides an example where Amazon used the “Appstore” phrase on a page selling gift cards, and according to Apple, hid away the “for Android” part in small letters.

    Amazon’s use is also likely to lessen the goodwill associated with Apple’s App Store service and Apple products designed to utilize Apple’s App Store service by associating Apple’s App Store service with the inferior qualities of Amazon’s service

    Amazon’s ongoing unlawful use of the APP STORE mark has irreparably harmed Apple, and Amazon’s threatened expansion and/or alteration of that unlawful use will increase the irreparable harm to Apple.

    Are you buying the false advertising claims? Let us know in the comments.

    App Store 2nd Amended Complaint

  • Amazon Phone On The Way, According To Report

    On the heels of the release of the new Kindle Fire, Amazon’s first attempt at a true tablet device, it looks like the company is already thinking about heading in the direction of smartphones.

    According to a note from Citigroup analyst Mark Mahaney, we could see an Amazon smartphone hit the market as soon as Q4 2012. Here’s a quote from the note, courtesy of All Things D:

    Based on our supply chain channel checks in Asia led by Kevin Chang, Citi’s Taipei-based hardware research analyst, we believe an Amazon Smartphone will be launched in 4Q12. Based on our supply chain check, we believe FIH is now jointly developing the phone with Amazon. However, we believe that Amazon will pay NRE (non-recurring engineering fees) to FIH but the device and multiple components will actually be manufactured by Hon Hai’s TMS business group (the same business group that makes Amazon’s E-reader and the 8.9” Amazon tablet).

    We believe the smartphone will adopt Texas Instrument’s OMAP 4 processor and is very likely to adopt QCOM’s dual mode 6-series standalone baseband given QCOM has been a long-time baseband supplier for Amazon’s E-reader.

    The speculation went further to say that the device might cost somewhere in the $150 to $170 range, and probably run on Android OS.

    The Kindle Fire is just a few days old, and based on my limited play with one appears to be a pretty good device for the amazingly low $199 price point. Could an Amazon smartphone succeed in a market filled with quality Android devices (not to mention the fact that history suggests that a new iPhone will be rolling out near that projected timeframe).?

    Do smartphones seem like a logical progression for the world’s biggest online retailer? Let us know what you think in the comments.

  • Kindle Fire / iPad 2 Side-By-Side Comparison

    “Great video, but Kindle Fire was not built to compete with the lord tablet,” writes one YouTube commenter. The folks at iDownloadBlog know this, but have still given us a fun little side-by-side comparison of Apple’s behemoth of a tablet and Amazon’s brand new, amazingly priced Kindle Fire.

    Through a couple of unscientific but still informative tests, we see how the Kindle Fire stacks up to the iPad 2 in terms of boot times, web browsing and video playback – specifically Netflix.

    First up, you’ll see that the iPad 2 boots quite a bit faster than the Kindle Fire. This should be no surprise to anyone considering the iPad 2 sports Apple’s A5 dual-core processor. Next, you’ll see that Safari beats the new Silk browser when it comes to completely loading pages. As far as the simple article content, the two tablets perform quite similarly. The Kindle Fire is slower to load certain ads because it’s loading Flash, which as we are all aware, the iPad 2 doesn’t bother with.

    The video points out that the Kindle Fire can’t compare when it comes to smoothness of scrolling – but then again nothing can really beat the iPad in that department.

    Finally, Netflix is demoed on each device and in this instance, the Kindle Fire wins. It begins playing the content faster than the iPad 2. Then again, let’s remember that Android just received an update to its Netflix app – an update which hasn’t yet hit iOS.

    Again, the Kindle Fire / iPad 2 comparison might not be the most relevant battle, but it is interesting to see how the new device stacks up to the industry leader. And, let’s remember that there is one spec where the Kindle Fire completely kills the iPad 2: Price.

    Have you been able to play with the Kindle Fire yet? What are your first impressions? Let us know in the comments.

  • Kindle Fire Release Comes Early, As Do Kindle Touch, Kindle Touch 3G Releases

    Amazon announced that it’s shipping its Kindle Fire tablet device a day early, and people are getting them today.

    “We’re thrilled to be able to ship Kindle Fire to our customers earlier than we expected. Kindle Fire quickly became the bestselling item across all of Amazon.com, and based on customer response we’re building millions more than we’d planned,” said Dave Limp, Vice President, Amazon Kindle. “Customers are excited about Kindle Fire because it is a premium product at the non-premium price of only $199.”

    It’s already getting some pretty good reviews. We should have our own up soon.

    The device is expected to be a hot seller throughout the holiday season, and beyond, thanks to that pricetag, which is significantly smaller than the iPad’s. Recent reports indicate that the company upped its orders to 5 million units by the end of the year.

    Of course the device also faces new competition from Barnes & Noble’s Nook Tablet, which gets released this week as well, though about 50 dollars more. More on that here.

    More on the Kindle Fire here.

    Amazon also announced that it’s shipping the Kindle Touch and Kindle Touch 3G beginning tomorrow (November 15). This is also several days earlier than previously announced (November 21). The Kindle Touch is $99. The Kindle Touch 3G is $150.

  • Amazon Ups Kindle Fire Orders, Demand Remains High

    Amazon’s new tablet, the Kindle Fire, is set to release on November 15th, and the buzz surrounding the device is pretty high. The Wi-Fi only tablet sports a 7-inch display, a dual-core processor, but lacks a camera or mic. In terms of features, it’s not the most loaded tablet on the market (although it will have a good amount of apps at launch). But that price point is pretty tasty – $199, hundreds of dollars less than many other comparable tablets on the market. And of course, there’s the new Silk browser that’s raising both excitement and concerns.

    But Amazon looks to be confident in its new tablet, as they have reportedly increased order of the Kindle Fire to 5 million before the end of 2011.

    The report comes courtesy of DigiTimes, who quotes sources within upstream component suppliers. This increase follows another recent increase from 3.5 million units to 4 million units.

    Estimates point to the fact that Amazon has a reason to be confident – some put the pre-order figures at nearly 100,000 on the first day and 20,000 every subsequent day for about a week.

    Another recent survey conducted by ChangeWave points to significant demand for the Kindle Fire.

    The survey of 2,600 “early adopter types” found that 5% had either already pre-ordered the device or were very likely to buy it once it hit the shelves. 12% said that they were somewhat likely to buy the tablet.

    In comparison, the same survey conducted in 2010 found that 4% had pre-ordered or were very likely to purchase Apple’s iPad, with only 9% saying that they were “somewhat likely.”

    Additionally, 26% of the “very likely to buy a Kindle Fire crowd” said that they would delay or put on hold buying a new iPad.

    It’s highly unlikely that the Kindle Fire will knock the crown off the iPad, but it is possible that with the cheap(er) price and the trusted Amazon name, it will cut into the iPad’s dominance. What do you think? Are you planning on giving the Kindle Fire a shot? Let us know in the comments.

  • Kindle Fire Apps: Facebook, Pandora, Netflix, Rhapsody, Zynga, EA & Rovio Games at Launch

    Kindle Fire Apps: Facebook, Pandora, Netflix, Rhapsody, Zynga, EA & Rovio Games at Launch

    Amazon’s Kindle Fire is expected to sell well this holiday season. If for no other reason than that $200 price tag. It’s far cheaper than the iPad, and carries the trusted Amazon Kindle brand. The Silk browser has gotten a lot of attention in the tech world as well.

    Today, Amazon announced some of the apps that the device will launch with, and that includes several thousand of the most popular Android apps and games. Keep in mind that it doesn’t use the actual Android Market, but Amazon’s own Android market.

    “We started talking to app developers everywhere the day we introduced Kindle Fire, and the response has been overwhelming,” Dave Limp, VP, Amazon Kindle. “In addition to over 18 million movies, TV shows, songs, books, and magazines from Amazon, we are excited to offer customers thousands of apps and games to choose from on Kindle Fire – from Pandora and Rhapsody to Facebook and Twitter to Netflix, as well as popular games from EA, Zynga and many other top game developers. And this is only the beginning – we’re adding more apps and games every day across all categories.”

    “”On Kindle Fire, we’re offering some of the world’s most popular titles with incredible gameplay and breathtaking graphics that anyone can play and enjoy anytime, anywhere,” said Bernard Kim, SVP & Head of Global Sales and Marketing at Electronic Arts.

    “Teaming with Amazon to make Words With Friends a featured game on the Kindle Fire provides us with a great way to reach new and existing players on a fresh and exciting device,” said David Ko, Chief Mobile Officer at Zynga.

    “Personalized radio has the power to enhance all types of experiences anytime, anywhere and we’re thrilled that Pandora is a launch app on the new Kindle Fire,” said Jessica Steel, EVP of Business and Corporate Development at Pandora.

    “We are really stoked to offer our members the Rhapsody experience on one of the most anticipated new devices this holiday season,” said Brian McGarvey, VP, Business Development for Rhapsody. “We want to make sure Rhapsody is available on every must-have device, including the Kindle Fire.”

    The Kindle Fire just got a new competitor, due in stores next week, in the Barnes & Noble Nook Tablet.

  • Nook Tablet Leaked, Release Date November 16th

    It looks like Barnes & Noble is about to launch its answer to the new Amazon Kindle Fire with the first true tablet to grace their line of Nook e-readers – the Nook Tablet.

    Engadget has unearthed some documents that confirm the Nook Tablet launch for November 16th. The new device will start at $249.

    Apparently, it is incredibly similar to the Nook Color e-reader, except it boasts some beefed-up specs. It will have a 1GB dual-core processor, making it faster than the Color and will sport 1GB RAM, making it more powerful than the Color and the Kindle Fire.

    Here’s what we can expect, according to Engadget:

    What we’re looking at is a 7-inch VividView IPS color touchpanel with a 1024 x 600 screen resolution (that’s 169 pixels per inch), a 1.2GHz dual-core OMAP4 processor, 1GB of RAM, dimensions of 8.1- x 5- x 0.48-inches, 16GB of inbuilt storage, a microSD expansion slot, roughly eight hours of battery life with WiFi switched off (that sinks to four hours with videos playing back), 802.11b/g/n WiFi and support for a smorgasbord of file formats including ePUB, PDF, XLS, DOC, PPT, TXT, DOCM, Flash, JPG, MP3, MP4 and AAC.

    Of course, that price point is $50 more than the Kindle Fire, so what will make people choose the Nook Tablet? According to B&N, the extra $50 is for twice the power, twice the memory,and twice the selection of books and magazines. Plus, the Nook Tablet will be lighter than its rival.

    According to the leaked documents, the official press announcement will happen on November 7th, which is also the day that pre-orders will begin. The tablet will find its way into customers’ hands on November 16th.

    In what looks to be related to this upcoming release, the Nook Color will get a price drop, down to $199. A new software update to the device will bring Hulu Plus, music from Rhapsody and Grooveshark, as well as more apps.

    Even with this price drop for the Nook Color, you’d think that some customers would pay the extra $50 and opt for the new Nook Tablet, considering the beefed-up specs.

  • Amazon Gets Into the E-Book Lending Business

    In regards to electronic media, do you consider yourself an owner or a borrower? If you had the option of renting a file and owning a file, which option would you take? What about if the format being discussed is electronic books? If you had the option of buying an e-book for your new Kindle or borrowing it, what choice would you make?

    Well, if you have an Amazon Kindle and/or, are holding out for the Kindle Fire, and are a member of the Amazon Prime service, you’ll soon be able to borrow e-books instead of making a full purchase. The service is called the Kindle Owner’s Lending Library and it does pretty much what it says. If you’re a member of Amazon Prime and have a Kindle — and only a Kindle, no other tablet devices apply — you’ll be allowed to take part in the book-borrowing service, one that, according to the Wall Street Journal, has some publishers balking at Amazon’s book-lending strategy.

    Apparently, only libraries are “allowed” to lend books, at least in the eyes of the publishers at odds with Amazon’s new service. Before that, however, here’s a little more information about Amazon’s Lending Library:

    Kindle owners can now choose from thousands of books to borrow for free, including over 100 current and former New York Times Bestsellers — as frequently as a book a month, with no due dates. No other e-reader or ebook store offers such a service.

    Now for the between the lines information: Even though other tablets can open Kindle-formatted e-books, they will not be able to do so with the books being lent out. These borrowed files can only be viewed on a Kindle device. The WSJ article clarifies:

    The new program, called Kindle Owners’ Lending Library, cannot be accessed via apps on other devices, which means it won’t work on Apple Inc.’s iPad or iPhone, even though people can read Kindle books on both devices. This restriction is intended to drive Kindle device sales, says Amazon.

    As Amazon’s introductory text indicates, those who take part in the Kindle Owner’s Lending Library service will only be able to borrow one book at a time, and only one book per month.

    Keep that in mind, speed readers.

    To access the lending library, potential users have to be enrolled in Amazon Prime, which costs $79 a year. Granted, the Prime membership gives customers access to more than just e-books to borrow — Prime members get special shipping rates and access to Amazon’s library of streaming movies and TV shows — but you still have to pay to play in Amazon’s digital lending library. For those who are interested in taking advantage of the service, Amazon has a pictorial how-to regarding the acquisition of new titles:

    Kindle Fire

    Kindle Fire


    As you can see, if you have experience navigating the web with other mobile devices, accessing the lending library with your Kindle won’t be difficult at all.

    Regarding the publisher backlash towards Amazon’s e-book lending service, the WSJ has more:

    None of the six largest publishers in the U.S. is participating. Several senior publishing executives said recently they were concerned that a digital-lending program of the sort contemplated by Amazon would harm future sales of their older titles or damage ties to other book retailers.

    Apparently, I’m being naive because I’m having a hard time seeing how increased exposure to these products is a bad thing. What if someone like the book/author enough to actually purchase the work(s) related to the e-book being borrowed? Does that hurt future sales or are these publishers worried that once people start borrowing, their desire to own will completely go away?

    Whatever the case, Amazon’s Kindle Lending Library is now live, but don’t forget about the Amazon Prime membership, which is also a requirement.

  • Netflix, Amazon Announce New Deals with Disney-ABC

    Netflix has extended its partnership with Disney-ABC, and Amazon announced a new partnership with the group.

    “Disney and ABC have been and continue to be an innovative and supportive partner for Netflix,” said Netflix chief content officer Ted Sarandos. “The diverse but always excellent programming from the different channels and networks are favorites of our members and we are thrilled to broaden the scope and extend the terms or our relationship.”

    New content to come out of the deal for Netflix includes:

    • ABC Family’s “Switched at Birth”
    • Prior season episodes of Disney Channel’s animated series “Kick Buttowski”
    • All episodes of the ABC thriller “Alias”

    The following will continue on Netflix as part of the extended deal:

    • Prior season episodes of “Grey’s Anatomy,” “Desperate Housewives,” and “Private Practice”
    • All episodes of “Lost,” “Brothers & Sisters,” and “Ugly Betty”
    • Prior season episodes of “Army Wives”
    • “The Secret Life of the American Teenager,” “Melissa & Joey,” and “Make It or Break It”
    • Various content from the Disney Channel including: “Phineas and Ferb,” ” Good Luck Charlie,” “The Suite Life on Deck,” and “Hannah Montana”

    Amazon lists the following as new offerings for Prime members:

    • Prior seasons of “Grey’s Anatomy”
    • All episodes of “Lost”
    • Prior seasons of “Phineas & Ferb”
    • Prior seasons of ABC Family’s “The Secret Life of the American Teenager,” including the most recently aired episodes from summer 2011
    • Prior seasons of Marvel’s animated shows “Spider-Man,” “X-Men Evolution,” “Thor & Loki: Blood Brothers” and “Iron Man: Extremis”
    • All episodes of ABC Family’s “Greek”
    • All episodes of “Felicity” from ABC Studios

    “We are excited to add some of the very best content available from Disney-ABC to Prime instant video,” said Brad Beale, director of video content acquisition for Amazon. “This includes every episode of past seasons from the ABC hits Lost and Grey’s Anatomy, fan favorites like Felicity and Greek, the popular Disney Channel show Phineas & Ferb and great animated series from Marvel. We’re working hard to add even more selection for Kindle Fire customers and Prime members leading up to the holidays, and expect to have nearly 13,000 titles available in Prime instant video by early next year.”

    Financial terms of either deal were not disclosed.

  • Amazon Revenue Up 44%, But Not Good Enough

    Amazon released its Q3 earnings report, missing analyst estimates. Revenue was up 44% to $10.88 billion in the third quarter, compared to $7.56 billion for the year-ago period.

    According to the Wall Street Journal, analysts were looking for $10.95 billion, and Amazon’s stock tanked in after hours trading.

    “September 28th was the biggest order day ever for Kindle, even bigger than previous holiday peak days – we introduced Kindle Fire for $199, Kindle Touch 3G for $149, Kindle Touch for $99, and our all new Kindle for only $79,” said Jeff Bezos, founder and CEO of Amazon.com. “In the three weeks since launch, orders for electronic ink Kindles are double the previous launch. And based on what we’re seeing with Kindle Fire pre-orders, we’re increasing capacity and building millions more than we’d already planned.”

    Here’s the release in its entirety:

    SEATTLE, Oct 25, 2011 (BUSINESS WIRE) — Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its third quarter ended September 30, 2011.

    Operating cash flow increased 19% to $3.11 billion for the trailing twelve months, compared with $2.62 billion for the trailing twelve months ended September 30, 2010. Free cash flow decreased 17% to $1.53 billion for the trailing twelve months, compared with $1.83 billion for the trailing twelve months ended September 30, 2010.

    Common shares outstanding plus shares underlying stock-based awards totaled 469 million on September 30, 2011, compared with 465 million a year ago.

    Net sales increased 44% to $10.88 billion in the third quarter, compared with $7.56 billion in third quarter 2010. Excluding the $371 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 39% compared with third quarter 2010.

    Operating income was $79 million in the third quarter, compared with $268 million in third quarter 2010. The favorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $14 million.

    Net income decreased 73% to $63 million in the third quarter, or $0.14 per diluted share, compared with net income of $231 million, or $0.51 per diluted share, in third quarter 2010.

    “September 28th was the biggest order day ever for Kindle, even bigger than previous holiday peak days – we introduced Kindle Fire for $199, Kindle Touch 3G for $149, Kindle Touch for $99, and our all new Kindle for only $79,” said Jeff Bezos, founder and CEO of Amazon.com. “In the three weeks since launch, orders for electronic ink Kindles are double the previous launch. And based on what we’re seeing with Kindle Fire pre-orders, we’re increasing capacity and building millions more than we’d already planned.”

    Highlights

     

    • Amazon announced the Kindle Fire, a new class of Kindle for movies, TV shows, music, books, magazines, apps, games, and web browsing with all the content, free storage in the Amazon Cloud, Whispersync, vibrant color touch screen, a powerful dual-core processor, and “Amazon Silk” – Amazon’s new revolutionary web browser that accelerates the power of the mobile device by using the computing speed and power of the Amazon Web Services Cloud. Kindle Fire is only $199.
    • Amazon announced three all-new Kindle e-readers that are smaller, lighter, and more affordable than ever before. The $79 latest generation Kindle is for customers who want the lightest, most compact Kindle at an incredible price. The $99 Kindle Touch includes an easy-to-use touch screen. Kindle Touch 3G is the top of the line e-reader with the unparalleled convenience of free 3G where customers never have to hunt or pay for a Wi-Fi hotspot – you simply download and read books anytime and anywhere – all for $149. Each of these e-readers includes all the benefits of the most advanced electronic ink display that reads like real paper, even in bright sunlight.
    • Amazon.fr launched the French Kindle Store offering customers a vast selection of over 35,000 French-language Kindle books. Amazon also announced that its series of free “Buy Once, Read Everywhere” apps for the most popular devices, including iPad, iPod touch, iPhone, PCs, Macs and Android-based devices, are now available in French-language versions. In addition, Amazon announced that the all-new Kindle with French navigation is available at Amazon.fr for only 99EUR .
    • Amazon.com announced licensing agreements with Twentieth Century Fox and PBS that allow the millions of Amazon Prime members to instantly stream a broad selection of popular movies and TV shows from their vast libraries. These deals will bring the total number of Prime instant videos to more than 12,000 movies and TV shows from partners such as CBS, FOX, PBS, NBCUniversal, Sony, Warner Bros., and many more.
    • Amazon Publishing released 61 titles in the quarter, including Kindle bestsellers “The Detachment” by Barry Eisler, “Dove Season” by Johnny Shaw, and “A Small Fortune” by Audrey Braun. Recent acquisitions include Tim Ferriss’ “The 4-Hour Chef,” Penny Marshall’s memoir “My Mother Was Nuts,” and the epic Foreworld Series project led by Neal Stephenson and Greg Bear. Amazon Publishing also announced a new imprint, 47North, which is dedicated to science-fiction, fantasy, and horror. 47North joins sister imprints AmazonEncore, AmazonCrossing, Powered by Amazon, Montlake Romance, and Thomas & Mercer.
    • The Company launched Amazon.es, a Spanish-language website offering customers a vast selection of books, DVDs, video games, music, and consumer electronics at everyday low prices. Amazon.es’s convenient services include Amazon Premium, the local version of Amazon Prime, with unlimited free guaranteed 2-3 day delivery for an annual fee of 14.95EUR . The first product sold on Amazon.es was a Blu-ray pack of “Star Wars: The Complete Saga” to a new Premium customer in Madrid.
    • North America segment sales, representing the Company’s U.S. and Canadian sites, were $5.93 billion, up 44% from third quarter 2010.
    • International segment sales, representing the Company’s U.K., German, Japanese, French, Chinese, Italian and Spanish sites, were $4.94 billion, up 44% from third quarter 2010. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 33%.
    • Worldwide Media sales grew 24% to $4.15 billion. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 19%.
    • Worldwide Electronics and Other General Merchandise sales grew 59% to $6.32 billion. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 54%.
    • Amazon Web Services (AWS) announced new features to make it even easier for enterprise customers to utilize the AWS infrastructure. New services like Direct Connect, Identity and Access Management, and Virtual Private Clouds allow enterprises to reliably, securely, and cost effectively use the existing AWS infrastructure for their computing needs.
    • AWS launched GovCloud, a new AWS Region designed to allow U.S. government agencies and contractors to move more sensitive workloads into the cloud by addressing their specific regulatory and compliance requirements. AWS also announced it has received Federal Information Security Management Act (FISMA) Moderate Authorization and Accreditation from the U.S. General Services Administration.

    Financial Guidance

    The following forward-looking statements reflect Amazon.com’s expectations as of October 25, 2011. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.

    Fourth Quarter 2011 Guidance

     

    • Net sales are expected to be between $16.45 billion and $18.65 billion, or to grow between 27% and 44% compared with fourth quarter 2010.
    • Operating income (loss) is expected to be between $(200) million and $250 million, or between 142% decline and 47% decline compared with fourth quarter 2010.
    • This guidance includes approximately $200 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions or investments are concluded and that there are no further revisions to stock-based compensation estimates.

    A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and will be available for at least three months at http://www.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.

    These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment center optimization, risks of inventory management, seasonality, the degree to which the Company enters into, maintains and develops commercial agreements, acquisitions and strategic transactions, and risks of fulfillment throughput and productivity. Other risks and uncertainties include, among others, risks related to new products, services and technologies, system interruptions, government regulation and taxation, payments and fraud. In addition, the current global economic climate amplifies many of these risks. More information about factors that potentially could affect Amazon.com’s financial results is included in Amazon.com’s filings with the Securities and Exchange Commission (“SEC”), including its most recent Annual Report on Form 10-K and subsequent filings.

    Our investor relations website is http://www.amazon.com/ir and we encourage investors to use it as a way of easily finding information about us. We promptly make available on this website, free of charge, the reports that we file or furnish with the SEC, corporate governance information (including our Code of Business Conduct and Ethics), and select press releases and social media postings.

    About Amazon.com

    Amazon.com, Inc. (NASDAQ:AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth’s Biggest Selection. Amazon.com, Inc. seeks to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. Amazon.com and other sellers offer millions of unique new, refurbished and used items in categories such as Books; Movies, Music & Games; Digital Downloads; Electronics & Computers; Home & Garden; Toys, Kids & Baby; Grocery; Apparel, Shoes & Jewelry; Health & Beauty; Sports & Outdoors; and Tools, Auto & Industrial. Amazon Web Services provides Amazon’s developer customers with access to in-the-cloud infrastructure services based on Amazon’s own back-end technology platform, which developers can use to enable virtually any type of business. The new latest generation Kindle is the lightest, most compact Kindle ever and features the same 6-inch, most advanced electronic ink display that reads like real paper even in bright sunlight. Kindle Touch is a new addition to the Kindle family with an easy-to-use touch screen that makes it easier than ever to turn pages, search, shop, and take notes – still with all the benefits of the most advanced electronic ink display. Kindle Touch 3G is the top of the line e-reader and offers the same new design and features of Kindle Touch, with the unparalleled added convenience of free 3G. Kindle Fire is the Kindle for movies, TV shows, music, books, magazines, apps, games and web browsing with all the content, free storage in the Amazon Cloud, Whispersync, Amazon Silk (Amazon’s new revolutionary cloud-accelerated web browser), vibrant color touch screen, and powerful dual-core processor.

    Amazon and its affiliates operate websites, including http://www.amazon.com
    http://www.amazon.co.uk
    http://www.amazon.de
    http://www.amazon.co.jp
    http://www.amazon.fr
    http://www.amazon.ca,
    http://www.amazon.cn
    http://www.amazon.it, and 
    http://www.amazon.es.
    As used herein, “Amazon.com,” “we,” “our” and similar terms include Amazon.com, Inc., and its subsidiaries, unless the context indicates otherwise.

    AMAZON.COM, INC.
    Consolidated Statements of Cash Flows
    (in millions)
    (unaudited)
    Three Months Ended Nine Months Ended Twelve Months Ended
    September 30, September 30, September 30,
    2011 2010 2011 2010 2011 2010
    CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 2,047 $ 1,629 $ 3,777 $ 3,444 $ 1,539 $ 2,514
    OPERATING ACTIVITIES:
    Net income 63 231 454 736 871 1,120
    Adjustments to reconcile net income to net cash from operating activities:
    Depreciation of fixed assets, including internal-use software and website development, and other amortization 278 150 724 399 894 510
    Stock-based compensation 144 107 397 304 518 404
    Other operating expense (income), net 37 26 112 77 140 98
    Losses (gains) on sales of marketable securities, net (6 ) (2 ) (4 ) (2 ) (4 ) (2 )
    Other expense (income), net (38 ) (35 ) (39 ) (62 ) (56 ) (56 )
    Deferred income taxes 34 (16 ) 68 (44 ) 116 (44 )
    Excess tax benefits from stock-based compensation (75 ) (61 ) (236 ) (84 ) (288 )
    Changes in operating assets and liabilities:
    Inventories (587 ) (505 ) (517 ) (326 ) (1,211 ) (666 )
    Accounts receivable, net and other (75 ) (64 ) 211 348 (320 ) (161 )
    Accounts payable 848 894 (1,687 ) (1,078 ) 1,755 1,152
    Accrued expenses and other 109 192 (9 ) 31 587 460
    Additions to unearned revenue 239 152 706 502 892 946
    Amortization of previously unearned revenue (249 ) (200 ) (721 ) (642 ) (984 ) (856 )
    Net cash provided by (used in) operating activities 797 855 (366 ) 7 3,114 2,617
    INVESTING ACTIVITIES:
    Purchases of fixed assets, including internal-use software and website development (529 ) (315 ) (1,261 ) (651 ) (1,589 ) (788 )
    Acquisitions, net of cash acquired, and other (48 ) (42 ) (656 ) (82 ) (927 ) (81 )
    Sales and maturities of marketable securities and other investments 1,964 1,059 5,931 3,139 7,043 3,827
    Purchases of marketable securities and other investments (1,287 ) (1,830 ) (4,475 ) (4,551 ) (6,203 ) (6,711 )
    Net cash provided by (used in) investing activities 100 (1,128 ) (461 ) (2,145 ) (1,676 ) (3,753 )
    FINANCING ACTIVITIES:
    Excess tax benefits from stock-based compensation 75 61 236 84 288
    Proceeds from long-term debt and other 9 67 131 110 173 125
    Repayments of long-term debt, capital lease, and finance lease obligations (91 ) (49 ) (341 ) (122 ) (440 ) (241 )
    Net cash provided by (used in) financing activities (82 ) 93 (149 ) 224 (183 ) 172
    Foreign-currency effect on cash and cash equivalents (39 ) 90 22 9 29 (11 )
    Net increase (decrease) in cash and cash equivalents 776 (90 ) (954 ) (1,905 ) 1,284 (975 )
    CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,823 $ 1,539 $ 2,823 $ 1,539 $ 2,823 $ 1,539
    SUPPLEMENTAL CASH FLOW INFORMATION:
    Cash paid for interest on long term debt $ 4 $ 3 $ 10 $ 8 $ 13 $ 10
    Cash paid for income taxes (net of refunds) 12 16 18 62 31 66
    Fixed assets acquired under capital leases 155 141 566 283 688 333
    Fixed assets acquired under build-to-suit leases 54 39 220 159 234 214
    AMAZON.COM, INC.
    Consolidated Statements of Operations
    (in millions, except per share data)
    (unaudited)
    Three Months Ended Nine Months Ended
    September 30, September 30,
    2011 2010 2011 2010
    Net sales $ 10,876 $ 7,560 $ 30,646 $ 21,257
    Operating expenses (1):
    Cost of sales 8,325 5,786 23,457 16,244
    Fulfillment 1,121 680 2,917 1,808
    Marketing 370 241 1,037 653
    Technology and content 769 442 2,047 1,216
    General and administrative 175 117 474 327
    Other operating expense (income), net 37 26 112 77
    Total operating expenses 10,797 7,292 30,044 20,325
    Income from operations 79 268 602 932
    Interest income 16 13 47 36
    Interest expense (17 ) (11 ) (45 ) (28 )
    Other income (expense), net 52 22 57 50
    Total non-operating income (expense) 51 24 59 58
    Income before income taxes 130 292 661 990
    Provision for income taxes (67 ) (79 ) (205 ) (267 )
    Equity-method investment activity, net of tax 18 (2 ) 13
    Net income $ 63 $ 231 $ 454 $ 736
    Basic earnings per share $ 0.14 $ 0.51 $ 1.00 $ 1.65
    Diluted earnings per share $ 0.14 $ 0.51 $ 0.99 $ 1.62
    Weighted average shares used in computation of earnings per share:
    Basic 454 448 453 447
    Diluted 461 456 460 455
    (1) Includes stock-based compensation as follows:
    Fulfillment 35 23 91 65
    Marketing 10 7 27 19
    Technology and content 75 56 211 159
    General and administrative 24 21 68 61
    AMAZON.COM, INC.
    Segment Information
    (in millions)
    (unaudited)
    Three Months Ended Nine Months Ended
    September 30, September 30,
    2011 2010 2011 2010
    North America
    Net sales $ 5,932 $ 4,126 $ 16,804 $ 11,496
    Segment operating expenses (1) 5,788 3,940 16,156 10,837
    Segment operating income $ 144 $ 186 $ 648 $ 659
    International
    Net sales $ 4,944 $ 3,434 $ 13,842 $ 9,761
    Segment operating expenses (1) 4,828 3,219 13,379 9,107
    Segment operating income $ 116 $ 215 $ 463 $ 654
    Consolidated
    Net sales $ 10,876 $ 7,560 $ 30,646 $ 21,257
    Segment operating expenses 10,616 7,159 29,535 19,944
    Segment operating income 260 401 1,111 1,313
    Stock-based compensation (144 ) (107 ) (397 ) (304 )
    Other operating income (expense), net (37 ) (26 ) (112 ) (77 )
    Income from operations 79 268 602 932
    Total non-operating income (expense) 51 24 59 58
    Provision for income taxes (67 ) (79 ) (205 ) (267 )
    Equity-method investment activity, net of tax 18 (2 ) 13
    Net income $ 63 $ 231 $ 454 $ 736
    Segment Highlights:
    Y/Y net sales growth:
    North America 44 % 45 % 46 % 46 %
    International 44 32 42 37
    Consolidated 44 39 44 42
    Y/Y segment operating income growth (decline):
    North America (23 ) % 19 % (2 ) % 53 %
    International (46 ) 11 (29 ) 20
    Consolidated (35 ) 15 (15 ) 35
    Net sales mix:
    North America 55 % 55 % 55 % 54 %
    International 45 45 45 46
    100 % 100 % 100 % 100 %
    (1) Represents operating expenses, excluding stock-based compensation and “Other operating expense (income), net,” which are not allocated to segments
    AMAZON.COM, INC.
    Supplemental Net Sales Information
    (in millions)
    (unaudited)
    Three Months Ended Nine Months Ended
    September 30, September 30,
    2011 2010 2011 2010
    North America
    Media $ 1,927 $ 1,591 $ 5,397 $ 4,512
    Electronics and other general merchandise 3,635 2,326 10,435 6,440
    Other (1) 370 209 972 544
    Total North America $ 5,932 $ 4,126 $ 16,804 $ 11,496
    International
    Media $ 2,226 $ 1,759 $ 6,373 $ 5,142
    Electronics and other general merchandise 2,681 1,644 7,364 4,531
    Other (1) 37 31 105 88
    Total International $ 4,944 $ 3,434 $ 13,842 $ 9,761
    Consolidated
    Media $ 4,153 $ 3,350 $ 11,770 $ 9,654
    Electronics and other general merchandise 6,316 3,970 17,799 10,971
    Other (1) 407 240 1,077 632
    Total Consolidated $ 10,876 $ 7,560 $ 30,646 $ 21,257
    Y/Y Net Sales Growth:
    North America:
    Media 21 % 13 % 20 % 17 %
    Electronics and other general merchandise 56 80 62 76
    Other 77 52 79 53
    Total North America 44 45 46 46
    International:
    Media 27 % 16 % 24 % 22 %
    Electronics and other general merchandise 63 54 63 61
    Other 21 26 20 30
    Total International 44 32 42 37
    Consolidated:
    Media 24 % 14 % 22 % 19 %
    Electronics and other general merchandise 59 68 62 69
    Other 70 48 70 50
    Total Consolidated 44 39 44 42
    Y/Y Net Sales Growth Excluding Effect of Exchange Rates:
    International:
    Media 17 % 18 % 15 % 20 %
    Electronics and other general merchandise 51 60 51 61
    Other 13 33 13 32
    Total International 33 35 32 37
    Consolidated:
    Media 19 % 15 % 17 % 18 %
    Electronics and other general merchandise 54 71 58 70
    Other 69 49 69 50
    Total Consolidated 39 40 40 41
    Consolidated Net Sales Mix:
    Media 38 % 44 % 38 % 45 %
    Electronics and other general merchandise 58 53 58 52
    Other 4 3 4 3
    100 % 100 % 100 % 100 %
    (1) Includes non-retail activities, such as AWS, miscellaneous marketing and promotional agreements, other seller sites, and co-branded credit card agreements
    AMAZON.COM, INC.
    Consolidated Balance Sheets
    (in millions, except per share data)
    September 30, December 31, September 30,
    2011 2010 2010
    ASSETS (unaudited) (unaudited)
    Current assets:
    Cash and cash equivalents $ 2,823 $ 3,777 $ 1,539
    Marketable securities 3,503 4,985 4,346
    Inventories 3,770 3,202 2,515
    Accounts receivable, net and other 1,496 1,587 959
    Deferred tax assets 312 196 200
    Total current assets 11,904 13,747 9,559
    Fixed assets, net 3,999 2,414 2,099
    Deferred tax assets 27 22 43
    Goodwill 1,934 1,349 1,277
    Other assets 1,190 1,265 1,184
    Total assets $ 19,054 $ 18,797 $ 14,162
    LIABILITIES AND STOCKHOLDERS’ EQUITY
    Current liabilities:
    Accounts payable $ 6,552 $ 8,051 $ 4,614
    Accrued expenses and other 2,426 2,321 1,761
    Total current liabilities 8,978 10,372 6,375
    Long-term liabilities 2,310 1,561 1,390
    Commitments and contingencies
    Stockholders’ equity:
    Preferred stock, $0.01 par value:
    Authorized shares — 500
    Issued and outstanding shares — none
    Common stock, $0.01 par value:
    Authorized shares — 5,000
    Issued shares — 471, 468, and 466
    Outstanding shares — 455, 451, and 449 5 5 5
    Treasury stock, at cost (600 ) (600 ) (600 )
    Additional paid-in capital 6,824 6,325 6,215
    Accumulated other comprehensive loss (241 ) (190 ) (131 )
    Retained earnings 1,778 1,324 908
    Total stockholders’ equity 7,766 6,864 6,397
    Total liabilities and stockholders’ equity $ 19,054 $ 18,797 $ 14,162
    AMAZON.COM, INC.
    Supplemental Financial Information and Business Metrics
    (in millions, except per share data)
    (unaudited)
    Y/Y %
    Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Change
    Cash Flows and Shares
    Operating cash flow — trailing twelve months (TTM) $ 2,617 $ 3,495 $ 3,033 $ 3,205 $ 3,114 19 %
    Purchases of fixed assets (incl. internal-use software & website development) — TTM $ 788 $ 979 $ 1,138 $ 1,374 $ 1,589 102 %
    Free cash flow (operating cash flow less purchases of fixed assets) — TTM $ 1,829 $ 2,516 $ 1,895 $ 1,831 $ 1,525 (17 %)
    Free cash flow — TTM Y/Y growth (5 %) (14 %) (18 %) (8 %) (17 %) N/A
    Invested capital (1) $ 6,576 $ 7,380 $ 7,931 $ 8,551 $ 9,147 N/A
    Return on invested capital (2) 28 % 34 % 24 % 21 % 17 % N/A
    Common shares and stock-based awards outstanding 465 465 466 468 469 1 %
    Common shares outstanding 449 451 452 454 455 1 %
    Stock-based awards outstanding 16 15 14 15 14 (11 %)
    Stock-based awards outstanding — % of common shares outstanding 3.6 % 3.2 % 3.1 % 3.2 % 3.2 % N/A
    Results of Operations
    Worldwide (WW) net sales $ 7,560 $ 12,948 $ 9,857 $ 9,913 $ 10,876 44 %
    WW net sales — Y/Y growth, excluding F/X 40 % 37 % 36 % 44 % 39 % N/A
    WW net sales — TTM $ 30,776 $ 34,204 $ 36,931 $ 40,278 $ 43,594 42 %
    WW net sales — TTM Y/Y growth, excluding F/X 40 % 40 % 39 % 39 % 39 % N/A
    Operating income $ 268 $ 474 $ 322 $ 201 $ 79 (71 %)
    Operating income — Y/Y growth, excluding F/X 13 % 3 % (20 %) (36 %) (77 %) N/A
    Operating margin — % of WW net sales 3.5 % 3.7 % 3.3 % 2.0 % 0.7 % N/A
    Operating income — TTM $ 1,408 $ 1,406 $ 1,334 $ 1,265 $ 1,076 (24 %)
    Operating income — TTM Y/Y growth, excluding F/X 50 % 27 % 7 % (7 %) (25 %) N/A
    Operating margin — TTM % of WW net sales 4.6 % 4.1 % 3.6 % 3.1 % 2.5 % N/A
    Net income $ 231 $ 416 $ 201 $ 191 $ 63 (73 %)
    Net income per diluted share $ 0.51 $ 0.91 $ 0.44 $ 0.41 $ 0.14 (73 %)
    Net income — TTM $ 1,120 $ 1,152 $ 1,054 $ 1,038 $ 871 (22 %)
    Net income per diluted share — TTM $ 2.47 $ 2.53 $ 2.30 $ 2.26 $ 1.89 (23 %)
    Segments
    North America Segment:
    Net sales $ 4,126 $ 7,211 $ 5,465 $ 5,406 $ 5,932 44 %
    Net sales — Y/Y growth, excluding F/X 45 % 45 % 45 % 50 % 44 % N/A
    Net sales — TTM $ 16,452 $ 18,707 $ 20,392 $ 22,208 $ 24,014 46 %
    Operating income $ 186 $ 295 $ 290 $ 214 $ 144 (23 %)
    Operating margin — % of North America net sales 4.5 % 4.1 % 5.3 % 4.0 % 2.4 % N/A
    Operating income — TTM $ 937 $ 955 $ 972 $ 986 $ 943 1 %
    Operating income — TTM Y/Y growth, excluding F/X 67 % 35 % 17 % 9 % 1 % N/A
    Operating margin — TTM % of North America net sales 5.7 % 5.1 % 4.8 % 4.4 % 3.9 % N/A
    International Segment:
    Net sales $ 3,434 $ 5,737 $ 4,392 $ 4,507 $ 4,944 44 %
    Net sales — Y/Y growth, excluding F/X 35 % 29 % 27 % 36 % 33 % N/A
    Net sales — TTM $ 14,324 $ 15,497 $ 16,539 $ 18,070 $ 19,580 37 %
    Net sales — TTM % of WW net sales 47 % 45 % 45 % 45 % 45 % N/A
    Operating income $ 215 $ 327 $ 175 $ 172 $ 116 (46 %)
    Operating margin — % of International net sales 6.2 % 5.7 % 4.0 % 3.8 % 2.4 % N/A
    Operating income — TTM $ 973 $ 981 $ 922 $ 888 $ 790 (19 %)
    Operating income — TTM Y/Y growth, excluding F/X 23 % 20 % 4 % (7 %) (23 %) N/A
    Operating margin — TTM % of International net sales 6.8 % 6.3 % 5.6 % 4.9 % 4.0 % N/A
    Consolidated Segments:
    Operating expenses (3) $ 7,159 $ 12,326 $ 9,392 $ 9,527 $ 10,616 48 %
    Operating expenses — TTM (3) $ 28,866 $ 32,268 $ 35,037 $ 38,404 $ 41,860 45 %
    Operating income $ 401 $ 622 $ 465 $ 386 $ 260 (35 %)
    Operating margin — % of Consolidated sales 5.3 % 4.8 % 4.7 % 3.9 % 2.4 % N/A
    Operating income — TTM $ 1,910 $ 1,936 $ 1,894 $ 1,874 $ 1,734 (9 %)
    Operating income — TTM Y/Y growth, excluding F/X 42 % 25 % 10 % 1 % (11 %) N/A
    Operating margin — TTM % of Consolidated net sales 6.2 % 5.7 % 5.1 % 4.7 % 4.0 % N/A
    AMAZON.COM, INC.
    Supplemental Financial Information and Business Metrics
    (in millions, except inventory turnover, accounts payable days and employee data)
    (unaudited)
    Y/Y %
    Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Change
    Supplemental
    Supplemental North America Segment Net Sales:
    Media $ 1,591 $ 2,370 $ 1,885 $ 1,585 $ 1,927 21 %
    Media — Y/Y growth, excluding F/X 12 % 13 % 18 % 19 % 21 % N/A
    Media — TTM $ 6,610 $ 6,881 $ 7,170 $ 7,430 $ 7,767 17 %
    Electronics and other general merchandise $ 2,326 $ 4,558 $ 3,303 $ 3,496 $ 3,635 56 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 80 % 71 % 63 % 67 % 56 % N/A
    Electronics and other general merchandise — TTM $ 9,103 $ 10,998 $ 12,277 $ 13,683 $ 14,992 65 %
    Electronics and other general merchandise — TTM % of North America net sales 55 % 59 % 60 % 62 % 62 % N/A
    Other $ 209 $ 283 $ 277 $ 325 $ 370 77 %
    Other — TTM $ 739 $ 828 $ 945 $ 1,095 $ 1,255 70 %
    Supplemental International Segment Net Sales:
    Media $ 1,759 $ 2,865 $ 2,073 $ 2,075 $ 2,226 27 %
    Media — Y/Y growth, excluding F/X 18 % 13 % 9 % 20 % 17 % N/A
    Media — TTM $ 7,723 $ 8,007 $ 8,247 $ 8,772 $ 9,238 20 %
    Electronics and other general merchandise $ 1,644 $ 2,834 $ 2,285 $ 2,398 $ 2,681 63 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 60 % 50 % 49 % 53 % 51 % N/A
    Electronics and other general merchandise — TTM $ 6,478 $ 7,365 $ 8,162 $ 9,162 $ 10,199 57 %
    Electronics and other general merchandise — TTM % of International net sales 45 % 48 % 49 % 51 % 52 % N/A
    Other $ 31 $ 38 $ 34 $ 34 $ 37 21 %
    Other — TTM $ 123 $ 125 $ 130 $ 136 $ 143 16 %
    Supplemental Worldwide Net Sales:
    Media $ 3,350 $ 5,235 $ 3,958 $ 3,660 $ 4,153 24 %
    Media — Y/Y growth, excluding F/X 15 % 13 % 13 % 20 % 19 % N/A
    Media — TTM $ 14,333 $ 14,888 $ 15,417 $ 16,202 $ 17,005 19 %
    Electronics and other general merchandise $ 3,970 $ 7,392 $ 5,588 $ 5,894 $ 6,316 59 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 71 % 62 % 57 % 62 % 54 % N/A
    Electronics and other general merchandise — TTM $ 15,581 $ 18,363 $ 20,439 $ 22,845 $ 25,191 62 %
    Electronics and other general merchandise — TTM % of WW net sales 51 % 54 % 55 % 57 % 58 % N/A
    Other $ 240 $ 321 $ 311 $ 359 $ 407 70 %
    Other — TTM $ 862 $ 953 $ 1,075 $ 1,231 $ 1,398 62 %
    Balance Sheet
    Cash and marketable securities (4) $ 6,123 $ 8,919 $ 7,019 $ 6,503 $ 6,474 6 %
    Inventory, net — ending $ 2,515 $ 3,202 $ 2,888 $ 3,229 $ 3,770 50 %
    Inventory turnover, average — TTM 11.8 11.4 11.6 11.3 10.8 (8 %)
    Fixed assets, net $ 2,099 $ 2,414 $ 2,902 $ 3,470 $ 3,999 91 %
    Accounts payable — ending $ 4,614 $ 8,051 $ 5,540 $ 5,721 $ 6,552 42 %
    Accounts payable days — ending 73 72 66 69 72 (1 %)
    Other
    WW shipping revenue $ 270 $ 437 $ 330 $ 331 $ 360 33 %
    WW shipping costs $ 576 $ 999 $ 786 $ 820 $ 918 59 %
    WW net shipping costs $ 306 $ 562 $ 456 $ 489 $ 558 83 %
    WW net shipping costs — % of WW net sales 4.0 % 4.3 % 4.6 % 4.9 % 5.1 % N/A
    Employees (full-time and part-time; excludes contractors & temporary personnel) 31,200 33,700 37,900 43,200 51,300 64 %

    Amazon.com, Inc.

    Certain Definitions

    Customer Accounts

     

    • References to customers mean customer accounts, which are unique e-mail addresses, established either when a customer places an order or when a customer orders from other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon Enterprise Solutions program customers, Amazon.com Payments customers, Amazon Web Services customers, and the customers of select companies with whom we have a technology alliance or marketing and promotional relationship. Customers are considered active when they have placed an order during the preceding twelve-month period.

    Seller Accounts

     

    • References to sellers means seller accounts, which are established when a seller receives an order from a customer account. Seller accounts exclude Amazon Enterprise Solutions sellers. Sellers are considered active when they have received an order from a customer during the preceding twelve-month period.

    Registered Developers

     

    • References to registered developers mean cumulative registered developer accounts, which are established when potential developers enroll with Amazon Web Services and receive a developer access key.

    Units

     

    SOURCE: Amazon.com, Inc.

    Amazon.com Investor Relations
    John Felton, 206-266-2171
    http://www.amazon.com/ir
    or
    Amazon.com Public Relations
    Mary Osako, 206/266-7180

     

  • iPhone 4S Camera Sample, Talking to Siri & A Broken iPad

    Today’s videos include some discussion about Amazon’s Silk browser, a discussion with Siri, a sample of the new iPhone 4S’s HD video, and plenty other goodies. Don’t miss the Pee-wee Herman PSA.

    View other daily video round-ups here.

    The magazine – an iPad that doesn’t work.

    Is Amazon’s Silk awesome or scary?

    Business Insider interviews Siri:

    Mitt Romney talks about how he tried to hire Steve Ballmer:

    A video sample from the new iPhone 4s’s HD camera (via MacRumors):

    Google Wallet in San Francisco and New York:

    An old Pee-Wee Herman PSA:

    Google Gets its Ice Cream Sandwich statue:

  • Google Music Store In The Works?

    It looks like Google might jump into the music sales business, as people familiar with the matter say that Google is planning on opening an online music store in the near future.

    Of course, this would put them in direct competition with Apple’s iTunes store as well as Amazon.

    According to the WSJ, Google might have to launch the service without having reached licensing agreements with the top three record labels. Apparently, the only label that Google is close to reaching a deal with to license their catalog in EMI, which is owned by CitiGroup. EMI is the 4th largest label and houses artists like Coldplay, Katy Perry, Pink Floyd and The Decemberists.

    A few months ago, Google launched Google Music Beta – a cloud storage platform for all of your music. You don’t purchase new music on Music Beta, instead you upload the music you already own to the service and it allows you to listen to it anywhere, from any enabled device. It has some pretty awesome features like caching, which allows you to play back songs you’ve recently listened to even when offline. It also feature a Pandora-like function that builds playlists based on certain starter tracks. Apple tried this type of thing with the “Genius” feature on iTunes.

    But Google had problems with gaining licensing agreements from the major record labels, which is why Music Beta launched without a music store.

    If Google launches a music store, it will no doubt work alongside Google Music.

    If this comes to fruition, Google will be entering a competitive area of cloud-centered music. Apple just launched iOS 5 with the iCloud, matching their ability to sell tracks from all the major labels with the ability to put it all in the cloud. Apple also offers a premium service, iTunes Match, that allows users to listen to all of their music, at any time, without having to manually upload each individual track to the cloud locker.

    And of course you have Amazon, which introduced their cloud player back in March.

    Do you think a Google Music Store could be successful? Let us know in the comments.

  • Googler Calls Google+ a “Knee-Jerk Reaction” and “A Study in Short-term Thinking”

    Consider this a lesson in how not to use Google+.

    And to think, the Circles feature was designed to give you more control over who sees what…

    A Google software engineer, Steve Yegge, had some less than favorable things to say about his employer’s social networking service Google+. You know, the one that Google says “is Google.

    Find this story interesting? We’d love to hear your thoughts in the comments, and as always, your +1’s, StumbleUpon shares, Facebook likes and retweets are appreciated.

    He crafted a lengthy and very critical post about Google+ to share within Google, but accidentally shared it publicly (hat tip to Frederic Lardinois). Of course, others were able to capture it before he deleted it.

    Here are some quotes from the rant.

    “I was at Amazon for about six and a half years, and now I’ve been at Google for that long. One thing that struck me immediately about the two companies — an impression that has been reinforced almost daily — is that Amazon does everything wrong, and Google does everything right.”

    That’s how it began. Good start, in Google’s eyes no doubt, considering the building rivalry between those two companies. In fact, much of post talks about how Google does most things better than Amazon, except for a few. Eventually, he talks about how Google’s “doesn’t get” platforms.

    Here are some of the Google+-specific quotes:

    Google+ is a prime example of our complete failure to understand platforms from the very highest levels of executive leadership (hi Larry, Sergey, Eric, Vic, howdy howdy) down to the very lowest leaf workers (hey yo). We all don’t get it. The Golden Rule of platforms is that you Eat Your Own Dogfood. The Google+ platform is a pathetic afterthought. We had no API at all at launch, and last I checked, we had one measly API call. One of the team members marched in and told me about it when they launched, and I asked: “So is it the Stalker API?” She got all glum and said “Yeah.” I mean, I was joking, but no… the only API call we offer is to get someone’s stream. So I guess the joke was on me.”

    Google+ is a knee-jerk reaction, a study in short-term thinking, predicated on the incorrect notion that Facebook is successful because they built a great product. But that’s not why they are successful. Facebook is successful because they built an entire constellation of products by allowing other people to do the work. So Facebook is different for everyone. Some people spend all their time on Mafia Wars. Some spend all their time on Farmville. There are hundreds or maybe thousands of different high-quality time sinks available, so there’s something there for everyone.”

    “Our Google+ team took a look at the aftermarket and said: “Gosh, it looks like we need some games. Let’s go contract someone to, um, write some games for us.” Do you begin to see how incredibly wrong that thinking is now? The problem is that we are trying to predict what people want and deliver it for them.”

    “You can’t do that. Not really. Not reliably. There have been precious few people in the world, over the entire history of computing, who have been able to do it reliably. Steve Jobs was one of them. We don’t have a Steve Jobs here. I’m sorry, but we don’t.”

    He also talks about how Microsoft “gets platforms” better. “So yeah, Microsoft gets it,” he says. “And you know as well as I do how surprising that is, because they don’t “get” much of anything, really. But they understand platforms as a purely accidental outgrowth of having started life in the business of providing platforms.”

    He also says Amazon gets it and that Facebook gets it.

    Google has said flat out that Microsoft is its “main competitor” (words of Eric Schmidt). And Amazon and Google are competing more and more. Obviously Facebook is a direct competitor to Google+ specifically. You wouldn’t think this is the kind of message Google would be happy about its employees putting out in public.

    Yegge put up a public follow-up post, saying, “Sadly, it was intended to be an internal post, visible to everybody at Google, but not externally. But as it was midnight and I am not what you might call an experienced Google+ user, by the time I figured out how to actually post something I had somehow switched accounts.”

    The post was taken down at his own discretion, he says. “I contacted our internal PR folks and asked what to do, and they were also nice and supportive. But they didn’t want me to think that they were even hinting at censoring me — they went out of their way to help me understand that we’re an opinionated company, and not one of the kinds of companies that censors their employees.”

    A couple of interesting comments in response to Yegge’s explanation:

    Pedram Keyani (Facebook engineer who has worked for Google and Microsoft): “I’m glad you are shaking things up and telling it how it is. I joined Google in 2005 but after a few years of I couldn’t take how little the company cared about connecting people. Fight the good fight.”

    Theodore Ts’O (Google engineer): “The bits about the pro’s and con’s of SOA (and what you have to do so you can use SOA sanely from an ops and development point of view) are definitely worth publishing in a cleaned up fashion. Definitely a well written rant, even if it was published in the wrong place. :-)”

    Liz Gannes interviewed Bradley Horowitz, VP of product at Google this week. While she notes that Yegge’s post was not a topic of discussion, she says, “First, Horowitz does think Google+ is a larger platform play rather than just a product, in that it will be a layer on top of all of Google’s products. And second, his team severely ‘underestimated the appetite for this product,’ and it is currently rushing to push out all sorts of things users are asking for, as well as other stuff they haven’t anticipated.”

    We haven’t heard what kind of consequences Yegge faces from the company, if any. Rip Rowan, who shared the post on Google+ before Yegge deleted it, says, “Hopefully Steve will not experience any negative repercussions from Google about this. On the contrary, he deserves a promotion.”

    Now Google Executive Chairman Eric Schmidt is using Google+. Maybe he’ll accidentally post an internal message publicly too. Keep your fingers crossed.

    What do you think? Do you agree with Yegge about Google+? Let us know in the comments.

    Read the original post in its entirety below:

    I was at Amazon for about six and a half years, and now I’ve been at Google for that long. One thing that struck me immediately about the two companies — an impression that has been reinforced almost daily — is that Amazon does everything wrong, and Google does everything right. Sure, it’s a sweeping generalization, but a surprisingly accurate one. It’s pretty crazy. There are probably a hundred or even two hundred different ways you can compare the two companies, and Google is superior in all but three of them, if I recall correctly. I actually did a spreadsheet at one point but Legal wouldn’t let me show it to anyone, even though recruiting loved it.

    I mean, just to give you a very brief taste: Amazon’s recruiting process is fundamentally flawed by having teams hire for themselves, so their hiring bar is incredibly inconsistent across teams, despite various efforts they’ve made to level it out. And their operations are a mess; they don’t really have SREs and they make engineers pretty much do everything, which leaves almost no time for coding – though again this varies by group, so it’s luck of the draw. They don’t give a single shit about charity or helping the needy or community contributions or anything like that. Never comes up there, except maybe to laugh about it. Their facilities are dirt-smeared cube farms without a dime spent on decor or common meeting areas. Their pay and benefits suck, although much less so lately due to local competition from Google and Facebook. But they don’t have any of our perks or extras — they just try to match the offer-letter numbers, and that’s the end of it. Their code base is a disaster, with no engineering standards whatsoever except what individual teams choose to put in place.

    To be fair, they do have a nice versioned-library system that we really ought to emulate, and a nice publish-subscribe system that we also have no equivalent for. But for the most part they just have a bunch of crappy tools that read and write state machine information into relational databases. We wouldn’t take most of it even if it were free.

    I think the pubsub system and their library-shelf system were two out of the grand total of three things Amazon does better than google.

    I guess you could make an argument that their bias for launching early and iterating like mad is also something they do well, but you can argue it either way. They prioritize launching early over everything else, including retention and engineering discipline and a bunch of other stuff that turns out to matter in the long run. So even though it’s given them some competitive advantages in the marketplace, it’s created enough other problems to make it something less than a slam-dunk.

    But there’s one thing they do really really well that pretty much makes up for ALL of their political, philosophical and technical screw-ups.

    Jeff Bezos is an infamous micro-manager. He micro-manages every single pixel of Amazon’s retail site. He hired Larry Tesler, Apple’s Chief Scientist and probably the very most famous and respected human-computer interaction expert in the entire world, and then ignored every goddamn thing Larry said for three years until Larry finally — wisely — left the company. Larry would do these big usability studies and demonstrate beyond any shred of doubt that nobody can understand that frigging website, but Bezos just couldn’t let go of those pixels, all those millions of semantics-packed pixels on the landing page. They were like millions of his own precious children. So they’re all still there, and Larry is not.

    Micro-managing isn’t that third thing that Amazon does better than us, by the way. I mean, yeah, they micro-manage really well, but I wouldn’t list it as a strength or anything. I’m just trying to set the context here, to help you understand what happened. We’re talking about a guy who in all seriousness has said on many public occasions that people should be paying him to work at Amazon. He hands out little yellow stickies with his name on them, reminding people “who runs the company” when they disagree with him. The guy is a regular… well, Steve Jobs, I guess. Except without the fashion or design sense. Bezos is super smart; don’t get me wrong. He just makes ordinary control freaks look like stoned hippies.

    So one day Jeff Bezos issued a mandate. He’s doing that all the time, of course, and people scramble like ants being pounded with a rubber mallet whenever it happens. But on one occasion — back around 2002 I think, plus or minus a year — he issued a mandate that was so out there, so huge and eye-bulgingly ponderous, that it made all of his other mandates look like unsolicited peer bonuses.

    His Big Mandate went something along these lines:

    1) All teams will henceforth expose their data and functionality through service interfaces.

    2) Teams must communicate with each other through these interfaces.

    3) There will be no other form of interprocess communication allowed: no direct linking, no direct reads of another team’s data store, no shared-memory model, no back-doors whatsoever. The only communication allowed is via service interface calls over the network.

    4) It doesn’t matter what technology they use. HTTP, Corba, Pubsub, custom protocols — doesn’t matter. Bezos doesn’t care.

    5) All service interfaces, without exception, must be designed from the ground up to be externalizable. That is to say, the team must plan and design to be able to expose the interface to developers in the outside world. No exceptions.

    6) Anyone who doesn’t do this will be fired.

    7) Thank you; have a nice day!

    Ha, ha! You 150-odd ex-Amazon folks here will of course realize immediately that #7 was a little joke I threw in, because Bezos most definitely does not give a shit about your day.

    #6, however, was quite real, so people went to work. Bezos assigned a couple of Chief Bulldogs to oversee the effort and ensure forward progress, headed up by Uber-Chief Bear Bulldog Rick Dalzell. Rick is an ex-Armgy Ranger, West Point Academy graduate, ex-boxer, ex-Chief Torturer slash CIO at Wal*Mart, and is a big genial scary man who used the word “hardened interface” a lot. Rick was a walking, talking hardened interface himself, so needless to say, everyone made LOTS of forward progress and made sure Rick knew about it.

    Over the next couple of years, Amazon transformed internally into a service-oriented architecture. They learned a tremendous amount while effecting this transformation. There was lots of existing documentation and lore about SOAs, but at Amazon’s vast scale it was about as useful as telling Indiana Jones to look both ways before crossing the street. Amazon’s dev staff made a lot of discoveries along the way. A teeny tiny sampling of these discoveries included:

    – pager escalation gets way harder, because a ticket might bounce through 20 service calls before the real owner is identified. If each bounce goes through a team with a 15-minute response time, it can be hours before the right team finally finds out, unless you build a lot of scaffolding and metrics and reporting.

    – every single one of your peer teams suddenly becomes a potential DOS attacker. Nobody can make any real forward progress until very serious quotas and throttling are put in place in every single service.

    – monitoring and QA are the same thing. You’d never think so until you try doing a big SOA. But when your service says “oh yes, I’m fine”, it may well be the case that the only thing still functioning in the server is the little component that knows how to say “I’m fine, roger roger, over and out” in a cheery droid voice. In order to tell whether the service is actually responding, you have to make individual calls. The problem continues recursively until your monitoring is doing comprehensive semantics checking of your entire range of services and data, at which point it’s indistinguishable from automated QA. So they’re a continuum.

    – if you have hundreds of services, and your code MUST communicate with other groups’ code via these services, then you won’t be able to find any of them without a service-discovery mechanism. And you can’t have that without a service registration mechanism, which itself is another service. So Amazon has a universal service registry where you can find out reflectively (programmatically) about every service, what its APIs are, and also whether it is currently up, and where.

    – debugging problems with someone else’s code gets a LOT harder, and is basically impossible unless there is a universal standard way to run every service in a debuggable sandbox.

    That’s just a very small sample. There are dozens, maybe hundreds of individual learnings like these that Amazon had to discover organically. There were a lot of wacky ones around externalizing services, but not as many as you might think. Organizing into services taught teams not to trust each other in most of the same ways they’re not supposed to trust external developers.

    This effort was still underway when I left to join Google in mid-2005, but it was pretty far advanced. From the time Bezos issued his edict through the time I left, Amazon had transformed culturally into a company that thinks about everything in a services-first fashion. It is now fundamental to how they approach all designs, including internal designs for stuff that might never see the light of day externally.

    At this point they don’t even do it out of fear of being fired. I mean, they’re still afraid of that; it’s pretty much part of daily life there, working for the Dread Pirate Bezos and all. But they do services because they’ve come to understand that it’s the Right Thing. There are without question pros and cons to the SOA approach, and some of the cons are pretty long. But overall it’s the right thing because SOA-driven design enables Platforms.

    That’s what Bezos was up to with his edict, of course. He didn’t (and doesn’t) care even a tiny bit about the well-being of the teams, nor about what technologies they use, nor in fact any detail whatsoever about how they go about their business unless they happen to be screwing up. But Bezos realized long before the vast majority of Amazonians that Amazon needs to be a platform.

    You wouldn’t really think that an online bookstore needs to be an extensible, programmable platform. Would you?

    Well, the first big thing Bezos realized is that the infrastructure they’d built for selling and shipping books and sundry could be transformed an excellent repurposable computing platform. So now they have the Amazon Elastic Compute Cloud, and the Amazon Elastic MapReduce, and the Amazon Relational Database Service, and a whole passel’ o’ other services browsable at aws.amazon.com. These services host the backends for some pretty successful companies, reddit being my personal favorite of the bunch.

    The other big realization he had was that he can’t always build the right thing. I think Larry Tesler might have struck some kind of chord in Bezos when he said his mom couldn’t use the goddamn website. It’s not even super clear whose mom he was talking about, and doesn’t really matter, because nobody’s mom can use the goddamn website. In fact I myself find the website disturbingly daunting, and I worked there for over half a decade. I’ve just learned to kinda defocus my eyes and concentrate on the million or so pixels near the center of the page above the fold.

    I’m not really sure how Bezos came to this realization — the insight that he can’t build one product and have it be right for everyone. But it doesn’t matter, because he gets it. There’s actually a formal name for this phenomenon. It’s called Accessibility, and it’s the most important thing in the computing world.

    The. Most. Important. Thing.

    If you’re sorta thinking, “huh? You mean like, blind and deaf people Accessibility?” then you’re not alone, because I’ve come to understand that there are lots and LOTS of people just like you: people for whom this idea does not have the right Accessibility, so it hasn’t been able to get through to you yet. It’s not your fault for not understanding, any more than it would be your fault for being blind or deaf or motion-restricted or living with any other disability. When software — or idea-ware for that matter — fails to be accessible to anyone for any reason, it is the fault of the software or of the messaging of the idea. It is an Accessibility failure.

    Like anything else big and important in life, Accessibility has an evil twin who, jilted by the unbalanced affection displayed by their parents in their youth, has grown into an equally powerful Arch-Nemesis (yes, there’s more than one nemesis to accessibility) named Security. And boy howdy are the two ever at odds.

    But I’ll argue that Accessibility is actually more important than Security because dialing Accessibility to zero means you have no product at all, whereas dialing Security to zero can still get you a reasonably successful product such as the Playstation Network.

    So yeah. In case you hadn’t noticed, I could actually write a book on this topic. A fat one, filled with amusing anecdotes about ants and rubber mallets at companies I’ve worked at. But I will never get this little rant published, and you’ll never get it read, unless I start to wrap up.

    That one last thing that Google doesn’t do well is Platforms. We don’t understand platforms. We don’t “get” platforms. Some of you do, but you are the minority. This has become painfully clear to me over the past six years. I was kind of hoping that competitive pressure from Microsoft and Amazon and more recently Facebook would make us wake up collectively and start doing universal services. Not in some sort of ad-hoc, half-assed way, but in more or less the same way Amazon did it: all at once, for real, no cheating, and treating it as our top priority from now on.

    But no. No, it’s like our tenth or eleventh priority. Or fifteenth, I don’t know. It’s pretty low. There are a few teams who treat the idea very seriously, but most teams either don’t think about it all, ever, or only a small percentage of them think about it in a very small way.

    It’s a big stretch even to get most teams to offer a stubby service to get programmatic access to their data and computations. Most of them think they’re building products. And a stubby service is a pretty pathetic service. Go back and look at that partial list of learnings from Amazon, and tell me which ones Stubby gives you out of the box. As far as I’m concerned, it’s none of them. Stubby’s great, but it’s like parts when you need a car.

    A product is useless without a platform, or more precisely and accurately, a platform-less product will always be replaced by an equivalent platform-ized product.

    Google+ is a prime example of our complete failure to understand platforms from the very highest levels of executive leadership (hi Larry, Sergey, Eric, Vic, howdy howdy) down to the very lowest leaf workers (hey yo). We all don’t get it. The Golden Rule of platforms is that you Eat Your Own Dogfood. The Google+ platform is a pathetic afterthought. We had no API at all at launch, and last I checked, we had one measly API call. One of the team members marched in and told me about it when they launched, and I asked: “So is it the Stalker API?” She got all glum and said “Yeah.” I mean, I was joking, but no… the only API call we offer is to get someone’s stream. So I guess the joke was on me.

    Microsoft has known about the Dogfood rule for at least twenty years. It’s been part of their culture for a whole generation now. You don’t eat People Food and give your developers Dog Food. Doing that is simply robbing your long-term platform value for short-term successes. Platforms are all about long-term thinking.

    Google+ is a knee-jerk reaction, a study in short-term thinking, predicated on the incorrect notion that Facebook is successful because they built a great product. But that’s not why they are successful. Facebook is successful because they built an entire constellation of products by allowing other people to do the work. So Facebook is different for everyone. Some people spend all their time on Mafia Wars. Some spend all their time on Farmville. There are hundreds or maybe thousands of different high-quality time sinks available, so there’s something there for everyone.

    Our Google+ team took a look at the aftermarket and said: “Gosh, it looks like we need some games. Let’s go contract someone to, um, write some games for us.” Do you begin to see how incredibly wrong that thinking is now? The problem is that we are trying to predict what people want and deliver it for them.

    You can’t do that. Not really. Not reliably. There have been precious few people in the world, over the entire history of computing, who have been able to do it reliably. Steve Jobs was one of them. We don’t have a Steve Jobs here. I’m sorry, but we don’t.

    Larry Tesler may have convinced Bezos that he was no Steve Jobs, but Bezos realized that he didn’t need to be a Steve Jobs in order to provide everyone with the right products: interfaces and workflows that they liked and felt at ease with. He just needed to enable third-party developers to do it, and it would happen automatically.

    I apologize to those (many) of you for whom all this stuff I’m saying is incredibly obvious, because yeah. It’s incredibly frigging obvious. Except we’re not doing it. We don’t get Platforms, and we don’t get Accessibility. The two are basically the same thing, because platforms solve accessibility. A platform is accessibility.

    So yeah, Microsoft gets it. And you know as well as I do how surprising that is, because they don’t “get” much of anything, really. But they understand platforms as a purely accidental outgrowth of having started life in the business of providing platforms. So they have thirty-plus years of learning in this space. And if you go to msdn.com, and spend some time browsing, and you’ve never seen it before, prepare to be amazed. Because it’s staggeringly huge. They have thousands, and thousands, and THOUSANDS of API calls. They have a HUGE platform. Too big in fact, because they can’t design for squat, but at least they’re doing it.

    Amazon gets it. Amazon’s AWS (aws.amazon.com) is incredible. Just go look at it. Click around. It’s embarrassing. We don’t have any of that stuff.

    Apple gets it, obviously. They’ve made some fundamentally non-open choices, particularly around their mobile platform. But they understand accessibility and they understand the power of third-party development and they eat their dogfood. And you know what? They make pretty good dogfood. Their APIs are a hell of a lot cleaner than Microsoft’s, and have been since time immemorial.

    Facebook gets it. That’s what really worries me. That’s what got me off my lazy butt to write this thing. I hate blogging. I hate… plussing, or whatever it’s called when you do a massive rant in Google+ even though it’s a terrible venue for it but you do it anyway because in the end you really do want Google to be successful. And I do! I mean, Facebook wants me there, and it’d be pretty easy to just go. But Google is home, so I’m insisting that we have this little family intervention, uncomfortable as it might be.

    After you’ve marveled at the platform offerings of Microsoft and Amazon, and Facebook I guess (I didn’t look because I didn’t want to get too depressed), head over to developers.google.com and browse a little. Pretty big difference, eh? It’s like what your fifth-grade nephew might mock up if he were doing an assignment to demonstrate what a big powerful platform company might be building if all they had, resource-wise, was one fifth grader.

    Please don’t get me wrong here — I know for a fact that the dev-rel team has had to FIGHT to get even this much available externally. They’re kicking ass as far as I’m concerned, because they DO get platforms, and they are struggling heroically to try to create one in an environment that is at best platform-apathetic, and at worst often openly hostile to the idea.

    I’m just frankly describing what developers.google.com looks like to an outsider. It looks childish. Where’s the Maps APIs in there for Christ’s sake? Some of the things in there are labs projects. And the APIs for everything I clicked were… they were paltry. They were obviously dog food. Not even good organic stuff. Compared to our internal APIs it’s all snouts and horse hooves.

    And also don’t get me wrong about Google+. They’re far from the only offenders. This is a cultural thing. What we have going on internally is basically a war, with the underdog minority Platformers fighting a more or less losing battle against the Mighty Funded Confident Producters.

    Any teams that have successfully internalized the notion that they should be externally programmable platforms from the ground up are underdogs — Maps and Docs come to mind, and I know GMail is making overtures in that direction. But it’s hard for them to get funding for it because it’s not part of our culture. Maestro’s funding is a feeble thing compared to the gargantuan Microsoft Office programming platform: it’s a fluffy rabbit versus a T-Rex. The Docs team knows they’ll never be competitive with Office until they can match its scripting facilities, but they’re not getting any resource love. I mean, I assume they’re not, given that Apps Script only works in Spreadsheet right now, and it doesn’t even have keyboard shortcuts as part of its API. That team looks pretty unloved to me.

    Ironically enough, Wave was a great platform, may they rest in peace. But making something a platform is not going to make you an instant success. A platform needs a killer app. Facebook — that is, the stock service they offer with walls and friends and such — is the killer app for the Facebook Platform. And it is a very serious mistake to conclude that the Facebook App could have been anywhere near as successful without the Facebook Platform.

    You know how people are always saying Google is arrogant? I’m a Googler, so I get as irritated as you do when people say that. We’re not arrogant, by and large. We’re, like, 99% Arrogance-Free. I did start this post — if you’ll reach back into distant memory — by describing Google as “doing everything right”. We do mean well, and for the most part when people say we’re arrogant it’s because we didn’t hire them, or they’re unhappy with our policies, or something along those lines. They’re inferring arrogance because it makes them feel better.

    But when we take the stance that we know how to design the perfect product for everyone, and believe you me, I hear that a lot, then we’re being fools. You can attribute it to arrogance, or naivete, or whatever — it doesn’t matter in the end, because it’s foolishness. There IS no perfect product for everyone.

    And so we wind up with a browser that doesn’t let you set the default font size. Talk about an affront to Accessibility. I mean, as I get older I’m actually going blind. For real. I’ve been nearsighted all my life, and once you hit 40 years old you stop being able to see things up close. So font selection becomes this life-or-death thing: it can lock you out of the product completely. But the Chrome team is flat-out arrogant here: they want to build a zero-configuration product, and they’re quite brazen about it, and Fuck You if you’re blind or deaf or whatever. Hit Ctrl-+ on every single page visit for the rest of your life.

    It’s not just them. It’s everyone. The problem is that we’re a Product Company through and through. We built a successful product with broad appeal — our search, that is — and that wild success has biased us.

    Amazon was a product company too, so it took an out-of-band force to make Bezos understand the need for a platform. That force was their evaporating margins; he was cornered and had to think of a way out. But all he had was a bunch of engineers and all these computers… if only they could be monetized somehow… you can see how he arrived at AWS, in hindsight.

    Microsoft started out as a platform, so they’ve just had lots of practice at it.

    Facebook, though: they worry me. I’m no expert, but I’m pretty sure they started off as a Product and they rode that success pretty far. So I’m not sure exactly how they made the transition to a platform. It was a relatively long time ago, since they had to be a platform before (now very old) things like Mafia Wars could come along.

    Maybe they just looked at us and asked: “How can we beat Google? What are they missing?”

    The problem we face is pretty huge, because it will take a dramatic cultural change in order for us to start catching up. We don’t do internal service-oriented platforms, and we just as equally don’t do external ones. This means that the “not getting it” is endemic across the company: the PMs don’t get it, the engineers don’t get it, the product teams don’t get it, nobody gets it. Even if individuals do, even if YOU do, it doesn’t matter one bit unless we’re treating it as an all-hands-on-deck emergency. We can’t keep launching products and pretending we’ll turn them into magical beautiful extensible platforms later. We’ve tried that and it’s not working.

    The Golden Rule of Platforms, “Eat Your Own Dogfood”, can be rephrased as “Start with a Platform, and Then Use it for Everything.” You can’t just bolt it on later. Certainly not easily at any rate — ask anyone who worked on platformizing MS Office. Or anyone who worked on platformizing Amazon. If you delay it, it’ll be ten times as much work as just doing it correctly up front. You can’t cheat. You can’t have secret back doors for internal apps to get special priority access, not for ANY reason. You need to solve the hard problems up front.

    I’m not saying it’s too late for us, but the longer we wait, the closer we get to being Too Late.

    I honestly don’t know how to wrap this up. I’ve said pretty much everything I came here to say today. This post has been six years in the making. I’m sorry if I wasn’t gentle enough, or if I misrepresented some product or team or person, or if we’re actually doing LOTS of platform stuff and it just so happens that I and everyone I ever talk to has just never heard about it. I’m sorry.

    But we’ve gotta start doing this right.

  • Google and Amazon: The Next Great Tech Rivalry?

    Google and Amazon: The Next Great Tech Rivalry?

    Microsoft and Yahoo have been Google’s main rivals for years. As Google has expanded into more and more product areas, it has taken on plenty of competition in a wide variety of industries. Apple and Facebook are two of its biggest rivals now, but the Amazon/Google competition is emerging as the next great rivalry.

    The companies compete in eBooks. They compete in online retail. Google product search has the ability to send consumers to a lot of sellers of products that Amazon no doubt would rather have people searching for on Amazon.com.

    Google has Google Offers, Amazon has Amazon Local deals, and apparently that’s doing quite well.

    Amazon is now in the tablet market. It runs Android, but Amazon’s version of Android. Amazon even has its own version of the Android Market. In terms of operating systems, the competition might soon even get more fierce as it’s rumored that Amazon wants to buy WebOS from HP.

    With the Amazon Kindle Fire, the company’s tablet, Amazon appears to be going straight for Google’s Chrome jugular. Google has always touted Chrome’s speed, perhaps more than any other feature, but Amazon’s Silk browser, could give it a big run for its money, as it taps into Amazon’s EC2 Elastic Compute Cloud) to optimize the page loading experience. Amazon talks about this here:

    Silk is only for the Kindle Fire for now, but how long do you think that will last? It’s not hard to envision this becoming a straight up competitor to Chrome, Firefox, IE, Safari, etc.

    This week, Google announced some new storage and App Engine offerings that will help it compete with Amazon Web Services. Specifically, Google’s bundle of announcements includes: new enterprise level services and support option for Google App Engine, Google Cloud SQL, Google Cloud Storage with new features and a lower price, and new features for the Google Prediction API.

    Google gives more details about each of these in a post on the Google Enterprise blog. “We are enabling our enterprise customers to build business solutions that take advantage of the computing power and scalability of Google’s cloud services without all the hassles of deployment of applications,” says Group Product Manager Jessie Jiang. “We have been making great progress on Google App Engine, Cloud Storage, and Prediction API. There is more to come, stay tuned.”

    Suffice it to say, that while Google seemingly takes on every major tech and Internet company in one way or another (there may be a few exceptions….so far), it appears that Amazon and Google are well on their way to becoming bigger rivals than ever. It’s going to be fun to watch the different ways in which this competition manifests itself.

    Hopefully businesses and consumers will ultimately be the biggest winners.

    Update: Even as I was writing this, Google announced the Google Commerce Search Partner Program. It’s offering a reseller program to enable tech partners to roll Google Commerce Search into their solutions easily. Resellers will be expected to seek out opportunities to bring Google Commerce Search to existing or new retail clients, Google says. More on this here.

    Update 2: Also some very interesting comments on Amazon vs. Google from a guy who used to work at Amazon and currently works at Google.