Category: Amazon

Amazon Announces an eBook Milestone

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Kindle - white vs graphic (vs a stack of books)

As the Olympics thrilled London, another small piece of history also happened online. Amazon announced that their U.K. web site was now selling more ebooks for the Kindle than they were selling printed books!

It marked just the two-year anniversary of the day Amazon released the Kindle in England – and there’s some even more impressive figures. Amazon added that Kindle owners in the U.K. purchase four times as many ebooks as they did printed books. For every 100 printed books Amazon sold there, they were now selling 114 ebooks. And the figures don’t even include the sales of Amazon-published ebooks in Apple’s iBookStore or through other online booksellers. “Customers in the UK are now choosing Kindle books more often than print books,” announced Amazon’s Vice President of Kindle for Europe, “even as our print business continues to grow. As a result of the success of Kindle, we’re selling more books than ever before…”

The news has generated some headlines – but it’s really just another milestone in a bigger ongoing story. Amazon had already revealed that ebooks were outselling printed books in America more than one year ago. Amazon’s CEO, Jeff Bezos, announced the news in a conference call with shareholders on June 7, 2011. And he’d shared the same surprising twist: an announcement that at the same time, Amazon was also selling more printed books than ever before.

I’m reminded of the schoolteacher who taught her 5th grade class with Kindles. One of the students said it had made reading cool. Instead of outdated old copies of old-fashioned books, the students could read digital texts, search them electronically, and even share their favorite highlights right on their Facebook pages. Maybe Amazon’s actually increased the world’s interest in reading itself. That could explain why Amazon’s also selling more printed books.

Jeff Bezos has a goal to create a “universal library, ” so they can always connect customers to the book they want — any book, any where. Amazon’s working that towards goal with “a team of missionaries,” Bezos told the investors, and maybe their enthusiasm is coming through the Kindles that they make. I love reading on my Kindle, and I like to think that Amazon understands that passion, and is just trying to keep sharing it with the rest of the world. I guess what I’m saying is that behind all the sales figures is a simple idea: that people will read more if you make it easy enough for them.

And that’s probably why Amazon is selling so many ebooks…

Amazon’s Missing American Classics

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Amazon flag

Last week I wrote about a list from the Library of Congress identifying “88 Books that Shaped America.” Yet nearly a third of the books aren’t even available in Amazon’s Kindle Store! Out of all the books ever written, these were the ones which had been selected as the most influential on the lives of Americans. So I created a list of the 29 “missing American classics,” and thought about what the list implies for the future of reading, and the way that we’ll relate to our past.

Some of the missing titles were just influential children’s picture books, like The Cat in the Hat, Goodnight Moon, The Snowy Day, and Where the Wild Things Are. (Though you could listen to these stories on your Kindle, as audiobooks!) But for some reason, the Kindle Store doesn’t seem to have a version of the longer children’s novel, Charlotte’s Web – either as an ebook or as an audiobook. And there’s even more influential “books for grown-ups” that seem to be missing from Amazon’s Kindle Store.

The two missing books that surprised me most were To Kill a Mockingbird and Catcher in the Rye. (Though some all-American entrepreneurs have apparently written ebooks about these books, just so that interested readers have something else to purchase.) When I went to high school, these books were both considered modern classics, yet you still can’t read them on your Kindle. I’ve heard theories that the aging authors of these two books are insisting that they’ll be made available only in printed form.

For some reason, Amazon’s Kindle Store only has a French-language version available for Benjamin Franklin’s influential 1751 study “Experiments and Observations on Electricity.” (And Streetcar Named Desire is available only as an audiobook, though you could also rent Marlon Brando’s famous movie version for your Kindle Fire tablet. ) But I also couldn’t find a complete copy of The Weary Blues, an influential collection of poetry by Langston Hughes. On the other hand, I’ve never heard of a few of the books on the list from the Library of Congress – like Peter Parley’s Universal History from 1836.

Some books may have had an influence in past centuries, while being almost completely forgotten by the 21st century. But does that mean that the books that we’re writing today will suffer the same obscurity. And is it possible that going forward, America will be shaped more by ebooks from amateur authors?

Maybe in the future, the Library of Congress will recognize 50 Shades of Gray as an influential ebook. Or The Mill River Recluse. Or at least John Locke’s How I Sold 1 Million eBooks in 5 Months…


29 “Books that Shaped America” That Aren’t in the Kindle Store

The American Woman’s Home by Catharine E. Beecher and Harriet Beecher Stowe (1869)

The Autobiography of Malcolm X Malcolm X and Alex Haley (1965)

The Cat in the Hat by Dr. Seuss (1957)

The Catcher in the Rye by J.D. Salinger (1951)

Charlotte’s Web by E.B. White (1952)

Experiments and Observations on Electricity by Benjamin Franklin (1751)

Goodnight Moon by Margaret Wise Brown (1947)

A Grammatical Institute of the English Language by Noah Webster (1783)

Howl by Allen Ginsberg (1956)

Idaho: A Guide in Word and Pictures by the Federal Writers’ Project (1937)

Joy of Cooking by Irma Rombauer (1931)

Mark, the Match Boy by Horatio Alger Jr. (1869)

McGuffey’s Newly Revised Eclectic Primer by William Holmes McGuffey (1836)

New Hampshire by Robert Frost (1923)

Our Town: A Play by Thornton Wilder (1938)

Peter Parley’s Universal History by Samuel Goodrich (1837)

Sexual Behavior in the Human Male by Alfred C. Kinsey (1948)

The Snowy Day by Ezra Jack Keats (1962)

Spring and All by William Carlos Williams (1923)

A Street in Bronzeville by Gwendolyn Brooks (1945)

A Streetcar Named Desire by Tennessee Williams (1947)

A Survey of the Roads of the United States of America by Christopher Colles (1789)

To Kill a Mockingbird by Harper Lee (1960)

A Treasury of American Folklore by Benjamin A. Botkin (1944)

Unsafe at Any Speed by Ralph Nader (1965)

The Weary Blues by Langston Hughes (1925)

Where the Wild Things Are by Maurice Sendak (1963)

The Words of Cesar Chavez by Cesar Chavez (2002)

Amazon Lands a Big $16.5 Million Government Kindle Contract!

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United_States_Department_of_state.svg

Amazon has a new customer: the U.S. government. According to an article in Information Week, “The State Department plans to award a contract to Amazon to purchase thousands of Kindle e-readers for use in its offices around the world.”

They’re spending $16.5 million for the Kindles, according to the article, and they’re spreading out the purchases over the next five years. But the terms of the deal allow them to acquire up to 7,000 Kindles, which by my math would come out to $2,357 for each Kindle. Apparently it’s not just the Kindles that the State Department is buying, but also the ability to deliver their content to other non-Kindle devices, including Blackberries, PCs, Android phones, and Apple devices. Plus, the contract also includes an Amazon-hosted repository of government documents (and statistics on how often the content is actually being accessed), and of course, all of the necessary software upgrades.

If I’m reading this correctly, the State Department had already bought 6,000 Kindles last year in a pilot program for less than one million dollars. (The $980,000 program means that each Kindle cost an average of $163.)But this new contract is an even bigger “win” for the Kindle, because they beat out a lot of other devices which were being considered for the contract, including the iPad, the Nook, and the Sony Reader. (In a statement, government official said they’d identified Amazon’s Kindle as “the only e-Reader on the market that meets the government’s needs…”) One of the features they cited was the extended battery life of Amazon’s Kindle, as well as the availability of international power adapters.

One of the state department’s requirements was a text-to-speech feature. The reason? They want to use it to help teach English in classes! But it seems like a big part of their plan is to offer Amazon’s digital readers in the department’s own libraries, cultural centers, and reading rooms, which a spokesperson described as their “American spaces”. (“These are kind of like little American information centers, where they can look at copies of magazines, U.S. reference books, books on the American political system, history…”)

It seems like quite a perk. That’s almost enough to make me want to get a job in the State Department!

Is Amazon Conquering the World?

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Little Shop of Horrors lost ending

I’m still impressed that Amazon’s stock shot up 16% on Friday. But when they’d announced their amazing results, Amazon also shared some other interesting information about the popularity of the Kindle. For example…

– Amazon’s quietly made the Kindle available in over 175 different countires around the world, and since those launches, it’s also become the best-selling item on Amazon’s web sites in England, Germany, France, Italy, and Spain

– Amazon also boasted that its Kindle app for the iPad “is the #5 free iPad app of all time” (and the #1 free ebooks app), adding that “millions” of iPad owners are already using it.

Whether we notice it or not, I think we’re in the middle of a revolution. Amazon is everywhere — in nearly every country, and on nearly every device. Everyone’s got books in their pocket — or more specifically, Amazon’s books, ebooks formatted specifically for the Kindle, and for Amazon’s Kindle apps. And soon, it won’t be just books. Amazon’s already selling everything from touchscreen apps to digital music, digital movies and digital TV shows — all through Amazon’s giant online store.

The big difference is that now you don’t have to be sitting at your computer in order to buy things from Amazon — and you’d be surprised at just how many different things Amazon is selling. Last Monday, Amazon announced a new web site which sells industrial parts and scientific supplies. There’s centrifuges, replacement tires, and even hydraulics, pneumatics, and even a special plumbing section with “hydraulics and pneumatics.” It’s all available at AmazonSupply.com, and it’s got me wondering if there’s anything that Amazon won’t sell. Or more importantly, if there’s anything that we customers wouldn’t be willing to buy from Amazon?

Will Amazon eventually dominate the supply chain for countless business? Last week, Amazon’s CEO Jeff Bezos bragged to investors that there’s now 130,000 new ebooks that are exclusive to the Kindle Store — “You won’t find then anywhere else” — and that 16% of Amazon’s 100 best-selling titles are available only in the Kindle store. And of course, he couldn’t get through the announcement without a plug for Amazon’s Prime shipping service. (“If you’re an Amazon Prime member, you don’t even need to buy these titles – you can borrow them for free – with no due dates – from our revolutionary Kindle Owners’ Lending Library.”) It’s all great if you’re already buying lots of products from Amazon. But what happens if you’re trying to compete with Amazon?

I don’t know if I should be worried about Amazon’s enormous marketing power — or if I should be celebrating. (After all, I do buy a lot of products from Amazon.) But either way, at least for the next three months, Amazon not expecting it to slow down. At the end of last week’s big announcement, Amazon predicted that their net sales will continue to grow this year, increasing between 20% and 34% over the next three months from where they were in last year. And the last thing Jeff Bezos said in Amazon’s statement was an enthusiastic commitment not only to finding new Kindle customers, but also to Amazon’s expanding selection of ebooks to keep them all happy!

“Kindle is the best-selling e-reader in the world by far, and I assure you we’ll keep working hard so that the Kindle Store remains yet another reason to buy a Kindle!”

Amazon’s Stock Jumps 16% !

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Cartoon stock market chart showing Sales are going up

The numbers are in! Thursday afternoon, Amazon finally released their sales figures for the first three months of 2012. And the stock market was absolutely thrilled by Amazon’s newest numbers, sending the price of Amazon’s stock up on Friday by more than 16%! This means that overnight, the portfolio of Amazon CEO Jeff Bezos increased by nearly $2.5 billion, and the value of Amazon’s shares increased by more than $10 billion!

Why was Wall Street so excited? After all, it turns out that Amazon increased its operating cash flow, but only by $20 million. (Unfortunately, their “free cash flow” actually dropped by $750 million — though it’s still at a hefty $1.15 billion.) But the big question was whether or not Amazon sold more books than they had the year before — and the answer is yes! In fact, Amazon’s net sales increased by a whopping 34%, to $13.18 billion, for the first three months of 2012. (Last year, Amazon only sold $9.86 billion worth of products during the same period…) Amazon’s gross margins experienced “the largest uptick in 10 years,” according to one stock analyst.

Just in North America, Amazon sales were $7.43 billion — more than 36% more than they were at the same time last year. Still, due to the higher expenses, Amazon’s total net income also dropped quite a bit, down $71 million (to just $130 million) for the first three months of 2012. But even professional stock-pickers were impressed, with at least 11 different firms raising their price-point for buying Amazon’s stock. And Amazon also announced some other very interesting statistics on Thursday.

Their Kindle Fire tablet is now the #1 best-selling item in the Kindle Store — and the #1 most-gifted item in the store! And while Amazon’s not saying how many ebooks, movies, and songs have been downloaded, they did acknowlege that in the first three months of 2012, “Nine out of ten of the top sellers on Amazon.com were digital products – Kindle, Kindle books, movies, music and apps.” Deep in their press release, Amazon also revealed that “worldwide media” sales grew 19% (compared to the first three months of last year), now representing sales of $4.71 billion. (The Christian Science Monitor noted that’s “more than twice as fast as the 8 percent year-over-year gain posted in the quarter through December.”) And “electronics and other general merchandise” sales grew 43%, to $7.97 billion.

It looks Amazon’s already starting to see a fantastic pay-off from the big bet they’d placed on Kindle Fire touchscreen tablets!

Are Fewer People Buying Kindles?

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Thursday is a big day. Amazon is going to announce their first earnings report for 2012 — and hopefully, some statistics about the popularity of their new Kindles. Obviously a lot of people received a Kindle Fire tablet for Christmas (or a new $79 Kindle, or a Kindle Touch) — but those sales were all counted as part of 2011. So it’s this report which could reveal not only whether Amazon’s selling a lot more digital movies and music downloads now — but also, whether even more people are still buying Kindles!

But at least one analyst thinks they’re not. “[W]e cut our 2012 Kindle e-reader unit sales forecasts to 12.3 million from 24.0 million due to weak demand,” Chad Bartley announced last week. He’s a senior research analyst at Pacific Crest Securities, an investment bank that focuses exclusively on technology. And he’s not just concerned about the Kindle Fire tablets, but even Amazon’s sales prospects for their black-and-white e-ink readers.

The firm conducted its quarterly “consumer technology” survey — and they noticed a big drop in the number of people who wanted a Kindle. “[O]nly 5% of respondents intend to purchase a Kindle e-reader in the next 12 months,” he explained in a note released last week, “which is well below the 10% reported in our last survey.” Of course, the problem could be that the Kindle is already very popular — and maybe there’s just fewer people left who don’t own a Kindle. “We attribute weakening demand to the large install base of Kindle e-readers…” writes Bartley, estimating that over 28 million people now have a Kindle! Digital readers have also “matured,” with lots of new competition.

But the Kindle is also facing competition from apps, which let people read ebooks without ever buying a Kindle. (Bartley’s note specifically cites a recent study by Pew Internet Research, which found that just 41% of e-book readers are actually using a Kindle-like device, “while 42% read them on a computer, 29% on a cell phone and 23% on a tablet!”) In an odd coindence, I found this article on a web site called Business Insider — just a few days after they ran another article proclaiming “The Death of the Printed Book”

That article cited a remarkable statistic: that 21% of Americans now say they’ve read an e-book within the last year — a big jump from the number two months earlier, when only 17% of Americans said they’d read an e-book. And when given a list of typical reading situations, a majority still said they preferred ebooks over printed books in nearly every one! (For example, reading in bed, or reading books while traveling…) So while the e-book is clearly gaining in popularity over the printed book — people may not be reading those e-books on a Kindle! Still, not everyone’s convinced that Amazon’s in trouble.

After all, Amazon sells books as well as Kindles — and in the comments on the article, there’s a least a few people who won’t blindly trust a business insider. “I think I’ll take what the ‘experts’ say with a grain of salt,” posted a user named Dan Delgado. “If I recall correctly (and I think I do), ‘Experts’ said Amazon and Kindle were ‘in trouble’ when Apple launched the iPad and colluded with book publishers. Apple (they said) would take over the ebook business.

“A couple years later, Apple has 10% of the ebook market and is being sued by the Justice Department for price fixing!”

A Kindle Store at Your Local Mall?

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Amazon office building in Seattle

Your local mall might be getting a new tenant — a Kindle Store, filled with Kindles, accessories and the most popular books in print (including books published exclusively by Amazon). At least, that’s the new rumor which found its way to Publisher’s Weekly.

On their Twitter feed, the industry magazine shared the juicy headline (from a story by the Financial Post). “Is Amazon bringing a bookstore to a mall near you?” it asks, citing a report from the blog “Good E-Reader.” Within the next few months, according to the story, Amazon will try opening a real-world store to sell books and Kindles in Seattle, as “a test to gauge the market and see if a chain of stores would be profitable”! They cite multiple sources at Amazon “close to the situation,” and predict the store will open before next Christmas, and maybe even towards the fall, when Amazon officially launches their own line of books, or when Amazon releases the next version of their Kindle Fire tablet.

My first thought was: Maybe it’s because of the Kindle. Maybe ebooks have become so popular that Amazon now needs a new way to get rid of all their printed books! But then I remembered a bitter fight that Amazon’s been having with Barnes and Noble. Amazon announced they’d start publishing their own line of printed books, and then Barnes and Noble announced that they wouldn’t sell them! And they’re not the only bookstore planning to freeze out Amazon’s books, according to a columnist at Publisher’s Weekly. “I asked a number of independent booksellers in my beat (the South) whether they’d be stocking Amazon-published books. Answers ranged from ‘No’ to ‘Hell, no.’ ”

It’s an interesting column, because it points out that Barnes and Noble acquired a publishing house of their own in 2003 — after which other big book-sellers (including Borders and Costco) announced they’d
they stop carrying books from that publisher. “It’s easy to forget, in the age of monolithic publishing houses and ubiquitous big-box retailers, that the bookstore-as-publisher tradition goes way back – as pointed out in a recent Salon article, Shakespeare & Company published Ulysses, and City Lights published Howl.” But it still feels like an aggressive move, with Amazon launching both a publishing house for print books and a line of stores for selling them.

Of course, their real target may be Apple. Maybe Amazon’s decided they need their own stores at the mall where people can buy a Kindle Fire tablet, to keep competing with Apple’s iPad. Maybe Amazon wants to be able to offer same-day customer support, where you can bring in a defective Kindle, and receive a replacement Kindle the same day! And in the long-run, Amazon can keep benefiting from any new customers that their stores would bring in. After all, once a customer buys a Kindle, they’ll start buying all of their ebooks from Amazon!

It’s stories like this convince me that our world is changing — and fast! Last year, we were debating whether Amazon would destroy local bookstores. Now instead, we’re wondering whether Amazon will become our local bookstore!

The Kindle Store vs the eBook Pirates

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Long John Silver vs. the Amazon logo

It’s an investigation that’s worthy of a crime novel — but it’s a crime against ebooks! (Or at least, the authors who write them.) Acting on a tip, the business magazine Fast Company researched Amazon’s Kindle Store, and discovered four authors who were hiding a secret. They’d plagiarized every single one of their ebooks from somebody else!

Like any good crime story, it begins on the seedy side of town. At midnight in Amazon’s erotica section, the magazines’ reporter discovered “a hotbed of masked merchants profiting from copyright infringement.” I’m always suspicious when a publication decides to do a “business” story about the business of pornography, mostly because I assume they’re just trying to get attention! But the site’s editor obviously had some fun riffing on that theme when they wrote the article’s headlines. “Even with anti-piracy legislation looming, Amazon doesn’t appear too eager to stop the forbidden author-on-author action…”

I think it’s worth investigating, and their reporter found a perfect way to illustrate the issue — with the story of an ebook author named Sharazade. She’s never plagiarized anything herself, but when she studied the Kindle Store, Sharazade “was dismayed that a number of books, a few with nonsensical titles, were beating hers, even though they were hamstrung by twisted grammar and perverse punctuation.” I’ve also seen some badly-formatted books in the Kindle Store, so it’s not hard to imagine what the offending titles looked like. “Some sported covers comprised of low-resolution images with no lettering,” reports Fast Company. “One author managed to misspell her own name…”

One of these knock-off ebooks, by Maria Cruz, had become the #1 best-selling erotica book one day in the Kindle Store for Amazon.UK. So Sharazade downloaded a free sample to her Kindle, and made a discovery that was even more shocking than the vampire story that the author had written. That author “had copy and pasted the text from Bram Stoker’s Dracula. Curious, Sharazade keyed in phrases from other Cruz ebooks and discovered that every book she checked was stolen.” (Emphasis mine.)

But that was only the beginning. Sharazade’s discovery prompted an investigation from Fast Company, which revealed that Cruz “isn’t the only self-published plagiarist. Amazon is rife with fake authors selling erotica ripped word-for-word from stories posted on Literotica, a popular and free erotic fiction site…” In fact, Maria Cruz “had 19 ebooks and two paperbacks, all of which were created by other authors and republished without their consent.” Another author had published 31 ebooks in the Kindle store — every single word of them plagiarized. A third author had plagiarized 11 ebooks, and a fourth author had plagiarized eight more. And “she had even thought to plagiarize some five-star reviews….”

Of course, it’s not just the Kindle store. (Fast Company also discovered the same author had also published five completely-plagiarized ebooks in Apple’s iBookStore.) And the real victim here isn’t Amazon — or even their readers — but the hard-working authors who discover that their creations have been stolen. A 52-year-old math teacher complained to the magazine that “What makes this kind of theft so insidious is how easy it is to get away with and avoid getting caught.” A Canadian novelist named S.K.S. Perry even discovered that, without his knowledge, someone was already selling his novel as a Kindle ebook. “All I can assume,” he wrote on his blog, “is that someone convinced Amazon that they were S.K.S. Perry, and submitted my book for sale.”

It won’t be the first time. I remember when a friend of mine — also a technology reporter — convinced Amazon that he was the author of a book. The author he was claiming to be was Socrates, and he even ended up filling out an autobiography which was displayed on Amazon.com. This was back in the late 1990’s, so my memory of the details may be fuzzy. But I remember “Socrates” claiming that he’d had a lifelong friendship with another popular writer — Louis L’Amour. (The 20th-century author behind hundreds of cowboy western novels…)

“Self-publishing has become the latest vehicle for spammers and content farms,” writes Fast Company, “with the sheer volume of self-published books making it difficult, if not impossible, for e-stores like Amazon to vet works before they go on sale.” They note that six years ago, there were just 51,000 self-published titles, but last year, there were 133,036, “and that number is destined to climb.” That’s a good thing, and I’m always excited to see the walls crumbling between “professional” authors and the rest of us ordinary people who have a story to tell. Unfortunately, plagiarism looks like one of the unintended consequences. Some of those ordinary people just aren’t very honest.

“Writing a book is hard…” notes Fast Company. “It’s a whole lot easier to copy and paste someone else’s work, slap your name on top, and wait for the money to roll in.” But it gives me a special feeling to watch the real self-published authors taking so much pride in their work, and sharing protests from the heart about how it feels to find their words stolen. “I have no problem competing against legitimate writers and publishers,” Sharazade told Fast Company. “That’s all part of the deal.

“But I am irritated by competing with cheaters.”

Amazon Announces Big Kindle Sales Figures

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Kindle gift-wrapped as a Christmas gift

Amazon won’t release specific numbers about their Kindle sales — but they made a rare exception Thursday in their special year-end press release. “2011 is the Best Holiday Ever for Kindle,” Amazon announced, pointing to the fact that this year, they’d sold “millions of Kindle Fires and millions of Kindle e-readers.”

That’s still vague, but it reveals a big number if you parse it carefully. “Millions” has to mean at least two million, and Amazon’s apparently reporting two different numbers — one for the holiday sales of their color Kindle Fire tablets, and another one for holiday sales of their family of black-and-white e-ink Kindles. That means Amazon sold at least four million Kindles in December — a fact they confirm later in their press release. “Throughout December, customers purchased well over 1 million Kindle devices per week,” Amazon announced.

Unfortunately, there’s no telling what Amazon means by “well over one million”. And it’s fun to look at other clever tricks that Amazon’s used over the years to avoid giving out a specific number. For example, last year in December of 2010, Amazon made an announcement about sales for their newly-released Kindle 3. “[I]n the last 73 days, readers have purchased more Kindles than we sold during all of 2009,” the statement read — without providing an actual number!

“Amazon has a tradition of playing these stupid mind games with the press…” complained one columnist at PC World. “Amazon really took the cake for its silly numbers game last December [of 2009], when the company announced it had sold enough 8 gigabyte iPods during the holiday season to play 422 years of continuous music. The company also claimed it had sold enough Blu-ray disc players during the 2009 holiday sales blitz that if you lined up all the players side-by-side they would stretch for more than 27 miles. Huh?”

And this year, Amazon released a press release with some even stranger comparisons.

“Amazon’s third-party sellers sold enough cameras for every fan at the next 10 Super Bowls to snap their own shots of the winning touchdown.”

“Amazon’s third-party sellers sold enough toys in 2011 to give a toy to every resident of Chicago.”

“[Third-party sellers] sold as many Lalaloopsy Dolls as there are lights on the Rockefeller Center Christmas Tree in New York City.”

I love Amazon, and I love my Kindle — but it’s for that reason that I wish Amazon would tell us how many other people have actually bought a Kindle! “Reading Amazon’s press releases on Kindle’s greatness is like having a discussion with a kindergartner or a politician,” complained one analyst at The Motley Fool. “They all tell you what they think you want to hear in glowing superlatives, but lack the details you really need to know before drawing your own conclusion!”

But at least Amazon’s press release this morning also reported an interesting phenomenon that I’d also noticed earlier this month. “[T]he #1 and #4 best-selling Kindle books released in 2011 were both published independently,” they announced, and both ebooks came from authors using Amazon’s “Kindle Direct Publishing” program for self-publishing ebooks. Amazon’s CEO called it “a huge milestone for independent publishing,” congratulating the two authors, and delivering a message for anyone who got a Kindle for Christmas. “We are grateful to our customers worldwide for making this the best holiday ever for Kindle…”

Amazon Announces Strange Sales Milestones

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Steve Jobs biography is a rising sun over Mount Everest

If you bought a copy of the book Steve Jobs, you’re part of a very strange milestone. It was Amazon’s #1 best-selling book this holiday season, and today Amazon announced their customers “purchased enough copies…to create a stack taller than Mt. Everest!”

It’s an annual Amazon tradition — the fun (but nearly-meaningless) statistics about their massive holiday sales. For example, “The cumulative weight of the Bowflex 552 Adjustable Dumbbells purchased by Amazon customers would outweigh more than 70 adult elephants.” And “If you unfolded and stacked each pair of jeans purchased by Amazon customers this holiday, the height would be 2,500 times taller than the Statue of Liberty.”

But they’ve also included some real information in their annual press release. For example, Amazon’s announced their best-selling books for this year’s holiday season.

    “Steve Jobs” by Walter Isaacson
    “Diary of a Wimpy Kid: Cabin Fever”
    “11/22/63” by Stephen King

And they’re also releasing a separate set of figures for the holiday best-sellers in Kindle ebooks!

    “The Hunger Games” by Suzanne Collins
    Catching Fire” by Suzanne Collins
    The Litigators” by John Grisham

It’s also interesting to hear stories about Amazon’s luckiest customer, who placed an order at 2:35 on Saturday afternoon — the day before Christmas — and actually received their order on the same day, just 3 hours and 40 minutes later! They’d ordered a rechargeable pack of batteries, and they shipped it using Amazon’s “Local Express Delivery” service. It offers one-day shipping for $10 in ten different cities — or just $3.99 if you’re just purchasing a gift card. (And it’s just $3.99 to deliver any order if you’re a member of Amazon’s Prime shipping program.) Not every item is always available for one-day shipping — check its “product description” page on Amazon.com to make sure. But here’s a list of the 10 cities where Amazon’s now offering the one-day shipping option — grouped by the cut-off time for placing your orders (using their local time).

    1 p.m.
    Seattle

    11:00 a.m.
    Las Vegas:

    10:30
    Baltimore
    Boston
    Washington, D.C.

    10 a.m.
    New York City (and parts of New Jersey)
    Philadelphia

    9:30 a.m.
    Phoenix

    7:00 a.m.
    Chicago
    Indianapolis

Interestingly, the cut-off time for Seattle is supposed to be 1:00 p.m. But apparently the luckiest customer of the year placed their order more than 90 minutes later — and still received their batteries on the same day!

And if you look carefully, you can even extract some real numbers from the rest of Amazon’s descriptive statistics. For example, “Amazon customers purchased enough sweaters to outfit each of Santa’s reindeer during Christmas Eve deliveries for the next 14,000 years.” It’s like one of those “story problems” that high school students dread in their math class. (Eight reindeer — plus one more, if you count Rudolph — would need nine sweaters for Christmas Eve, so if Amazon outfitted them for the next 14,000 years, that’d be nine times 14,000 — or 126,000 sweaters….) That doesn’t seem like a lot of sweaters, until you remember that they were all purchased online at Amazon.com. Though there’s still no way of knowing which sweaters, or how much they cost.

It’s as though Amazon is sending reporters on a fun scavenger hunt for their actual sales figures. They’re reporting that “Amazon customers purchased enough HeatMax HotHands Handwarmers to give a pair to each resident of Iceland.” According to Wikipedia, the population of Iceland is about 320,000, so that’s also the number of handwarmers that were sold — 320,000. But they’re distributed in boxes of 10, boxes of 40, and also individually, so there’s still no way to calculate how many boxes were actually sold. And it could be as low as 8,000 boxes, representing sales of just $160,000…

Here’s two more “math puzzles” from Amazon — some interesting sales milestones from the great holiday shopping season of 2011.

“Amazon customers purchased enough copies of Just Dance 3 to give 15 copies to each person who participated in setting the world record for simultaneous dancing.”

“Amazon customers purchased enough Rory’s Story Cubes to give a cube to each person watching the New Year’s Eve ball drop live at Times Square.”

But there’s one question that even Amazon can’t answer. They announced’d their customers “purchased enough copies of Walter Isaacson’s Steve Jobs book to create a stack taller than Mt. Everest.”

So how many ebook versions would they have to sell to reach the top of Mt. Everest?

Which eBooks Were Amazon’s Best-Sellers for 2011?

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The Top 100 list

It’s really surprising. Amazon’s just announced which books (and which ebooks) were their best-sellers in 2011. And it turns out the two lists are entirely different!

To see Amazon’s lists, just point your computer’s web browser to tinyurl.com/2011Amazon – or browse both lists on a single page here. But just look at the the top ten ebooks of the year. Three of the 10 best-selling Kindle ebooks didn’t make into the top 100 bestselling printed books of the year — because they’ve never even been released in a printed edition! And that includes the #1 and #2 best-selling ebooks of the year…

      The Mill River Recluse (#1)
      The Abbey (#2)
      Caribbean Moon – A Manny Williams Thriller (#10)

And meanwhile, four of the top 10 best-selling printed books didn’t even make it into the top 100 best-selling ebooks of the year.

      Diary of a Wimpy Kid: Cabin Fever
      Go the **** to Sleep
      A Dance with Dragons by George R. R. Martin
      Bossypants by Tina Fey

The “Wimpy Kid” book is only available for the Kindle as an audiobook, and “Go the **** To Sleep” is a parody of children’s picture books, so it’s understandable that more people would want the print edition. But the other titles are available in both ebook and print editions — and they seem to prove that Kindle owners just buy different books than the people shopping for print editions!

Look again at the the top ten ebooks of the year. Only three of them also appeared on the list of the ten-bestselling printed books.


      Steve Jobs

      A Stolen Life by Jaycee Lee Dugard

      In the Garden of Beasts:
      Love, Terror, and an American Family in Hitler’s Berlin

And even if you look at the whole top 25, there’s still only four more printed books which also made it onto Amazon’s list of the 25 best-selling ebooks.


      The Paris Wife: A Novel
      The Litigators by John Grisham
      The Best of Me by Nicholas Sparks
      Dead Reckoning: A Sookie Stackhouse Novel

It couldn’t be more clear that Kindle owners are choosing their material from an entirely different universe of books. Stephen King’s new novel, 11/22/63 — is the #11 best-selling printed book. But it didn’t even make it into the top 25 on Amazon’s list of the best-selling ebooks. (Maybe because its $14.99 price tag made it less competitive against other ebooks.) On the ebook list, King’s new novel only ranked #32,and ironically, it placed lower than another Stephen King tale — Mile 81 — an 80-page short story about a haunted highway rest stop that King released exclusively as a Kindle Single for just $2.99. Now at the end of the year, it’s become the #26 best-selling Kindle ebook.

The signs are everywhere that it’s an entirely different set of books which are becoming popular in print. In fact, even if you look at the top fifty best-sellers, there’s still only eight more ebooks which have also made it onto both lists.

      Explosive Eighteen: A Stephanie Plum Novel

      The Son of Neptune (The Heroes of Olympus Book 2)

      Inheritance (Inheritance Cycle, Book 4)

      The Throne of Fire (the Kane Chronicles, Book Two)

      Killing Lincoln: The Shocking Assassination that
      Changed America Forever (co-authored by Bill O’Reilly)

      State of Wonder

      Smokin’ Seventeen: A Stephanie Plum Novel

      The Affair: A Reacher Novel

And nothing changes if you expand your focus to the top 100 best-selling books of the entire year. Even then, there’s just 24 more books that both lists have in common.


      Full Black: A Thriller (Scot Harvath)
      V is for Vengeance (Kinsey Millhone Mystery) by Sue Grafton
      The Land of Painted Caves: a Novel by Jean M. Auel
      The Tiger’s Wife: A Novel
      SEAL Team Six: Memoirs of an Elite Navy SEAL Sniper
      The Night Circus
      Stories I Only Tell My Friends: An Autobiography by Rob Lowe
      Against All Enemies by Tom Clancy
      The Marriage Plot: A Novel
      Caleb’s Crossing: A Novel
      Miss Peregrine’s Home for Peculiar Children
      The Greater Journey: Americans in Paris
      Now You See Her by James Patterson
      The Drop (Harry Bosch) by Michael Connelly
      A Discovery of Witches: A Novel
      Kill Alex Cross by James Patterson
      Before I Go To Sleep: A Novel
      The Fifth Witness by Michael Connelly
      Zero Day
      Buried Prey
      The Next Always: Book One of the Inn BoonsBoro Trilogy
      Portrait of a Spy (Gabriel Allon)
      Tick Tock by James Patterson
      Shock Wave (Virgil Flowers)

That means that of the 100 best-selling ebooks of the year — 60 of them didn’t even appear among the top 100 best-selling printed books. And the same is true in reverse. Just 40 of the top 100 best-selling printed books even made it onto Amazon’s list of the top 100 best-selling ebooks.

What’s going on? Five of the best-selling ebooks were “Kindle Singles”, short “idea-sized” ebooks between 5,000 and 30,000 words, which aren’t available in print editions.

      Second Son (Kindle Single)

      Mile 81 (Kindle Single) by Stephen King

      No Time Left (Kindle Single)

      Leaving Home: Short Pieces (Kindle Single) by Jodi Picoult

      Three Cups of Deceit: How Greg Mortenson,
      Humanitarian Hero, Lost His Way (Kindle Single)

And at least five of the best-selling ebooks are by authors who earned their popularity in ebooks, like Amanda Hocking and John Locke. (Both authors sold over one million ebooks in Amazon’s Kindle Store before they received publishing deals this year to release their novels as printed books.) Amanda Hocking’s Ascend (A Trylle Novel) was the #14 best-selling ebook of the entire year, but it still won’t be released in a print edition until late April of 2012. And Locke’s Vegas Moon — the Kindle’s #25 best-selling ebook of the year — won’t even be available in print until the end of next July.

The #24 best-selling ebook is also another book in Locke’s “Donovan Creed” series — A Girl Like You — but there’s not even a release date listed on Amazon for an upcoming print edition. Two other Locke ebooks were also among the top 100 best-selling ebooks this year — The Love You Crave (another Donovan Creed novel) and Follow the Stone (an Emmett Love Western). But while those two books are also available in print editions, neither print edition reached the top 100 on Amazon’s year-end best-seller list.

Heather Killough-Walden also landed two ebooks in the top 100 from her “Big Bad Wolf” paranormal series — The Spell and The Strip. The first one is only available as an ebook, and second one isn’t even available as a printed book or an ebook. (Though Amazon shows plans for an audiobook to be released at the end of December.) And I was surprised to see a familiar name among the best-selling authors of the year. Kindle Blogger Michael Gallagher wrote one of the 100 best-selling ebooks of 2011 — titled Free Kindle Books and How to Find Them.

So what print books are readers buying that didn’t become also become Kindle best-sellers? There’s celebrity memoirs by Ellen Degeneres, Steven Tyler, and Chelsea Handler, plus a backstage look at ESPN — and several political books, including Dick Cheney’s autobiography, Ann Coulter’s Demonic: How the Liberal Mob is Endangering America and After America: Get Ready for Armageddon. But print buyers also made a best-seller out of Neal Stephenson’s new novel Reamde, a techno-thriller about a multiplayer gaming universe which surprisingly didn’t appear among the 100 best-selling ebooks (though it’s been available since this September).

Amazon’s 2011 lists are sending us a very clear message: the world of publishing is changing. People who own Kindles are just reading different books than the people who buy printed books. But what’s really interesting is those books are being written by different authors.

2011 may be remembered as the year that hundreds of new voices finally found their audiences…

Is Amazon Building a Kindle Smartphone?

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Will Amazon build a Kindle smartphone instead of an app

It was almost a year ago that we listened to all those rumors about an upcoming color Kindle from Amazon. When Amazon finally announced the Kindle Fire this September, everyone already knew what to expect — an iPad-style tablet with a touchscreen that could also play videos. Now a few months later, there’s a brand new rumor in town. The next Kindle-riffic device coming from Amazon may be a smartphone!

“Amazon will try to compete on price, like it does with the Fire,” reports one business analyst, suggesting Amazon could reduce the smartphone’s price until they’re just breaking even. Amazon would produce smartphones for around $170 — and then try to earn money by selling “media” (like music files, videos, apps, and of course, ebooks). The device would be cheaper than “high-end” phones, but Amazon still faces a lot of competition.

“This seems totally crazy,” responds a technology reporter in San Francisco. “Amazon doesn’t do anything significantly better than other smartphone vendors…” But Amazon’s mastered the art of selling, and they’ve fine-tuned it over more than a decade. So the reporter also identifies what may be Amazon’s secret weapon: they know all about your shopping habits.

“If you’re an Amazon customer, it knows what you buy, when you bought it, who you bought it for, and how often you return. It also has a bunch of other customer buying habits which it could use to predict what you might be interested in.” Instead of just selling media files from Amazon’s web site, Amazon could sell you real-world items from the stores in your neighborhood. And because they know your purchasing patterns, Amazon could tie the “special offers” to your known interests – and, to your location!

The phones could include a “digital wallet” that’s tied to your Amazon account, the reporter speculates, which might communicate with a special Amazon kiosk that retailers could install, taking e-commerce off the web, and creating “mobile commerce”. (Like the Kindle Fire tablet, it’s not just a handheld device – it’s also a shopping platform!) And the reporter also points out that Amazon has already invested in “Living Social”, a service which offers Daily Deals to share among your digital friends. Could Amazon tie this all together into a new way to shop?

I’m excited about the possibility, but for an entirely different reason. I’ve always wanted a Kindle “Mini” — an iPod-sized screen that just displays ebooks, so the cost still stays nice and low. I like using the Kindle app on my smartphone, because then there’s always something for me to read waiting in my pocket. It almost feels like a “cute” technology – reading ebooks on an adorable miniature screen.

Amazon’s probably realized that a lot of people are already reading their Kindle books with a smartphone app. The only question now may be what to call Amazon’s new Kindle phone. The KPhone? The Phindle?

The Kindle Spark?

Could Amazon Add a New Sales Tax?

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sales_tax

Amazon always enjoys a blizzard of online sales during “Black Friday” — but they don’t collect any state sales tax. And yet surprisingly, Amazon’s just issued a press release saying they support a new law which creates a national system allowing states to collect their usual taxes from purchases made online. “It’s a win-win resolution,” an Amazon vice president said in the press release, promising that Amazon “will work with Congress, retailers, and the states to get this bi-partisan legislation passed.”

Five Republican Senators and five Democrats have co-sponsored the “Marketplace Fairness Act,” and even anti-tax conservative groups are supporting the legislation, reports the Los Angeles Times, because it includes a state-by-state implementation rather than a single national solution. (“The law would allow states to become part of a group of 24 states that have adopted a streamlined system to reduce the complications for retailers in figuring out a customer’s exact sales tax.”) And states could even impose their own unique taxes if they meet some basic requirements about simplicity. “I think we’ve finally found the sweet spot,” said one Senator from Illinois.

Small businesses are exempt if their annual sales are less than $500,000, and the Senators seem confident that the new legislation will be passed. “If I were president of an online retailer…I would look at this week in Washington, D.C.,” said a Senator for Tennesse, “and I’d make my plans to start collecting sales taxes wherever I sold things in the United States.” It’s good news for state governments, which could receive a total of $23 billion in new tax revenue, according to one Senator. “It’s about closing a tax loophole,” said another lawmaker. “It’s about stopping the subsidization of some businesses over others.”

So why is Amazon excited about paying state sales taxes? If you ask Amazon’s Vice President of Global Public Policy, he’d tell you that they’ll still remain competitive on price. (“As analysts have noted, Amazon offers customers the best prices with or without sales tax,” he said in a statement.) But that hints at a larger loophole that Amazon may be able to exploit. The reason they offer the best prices is their massive size, which allows them to pressure book publishers (and other retailers) for the cheapest possible discounts — and they may be able to exert the same pressure on the individual states who want to tax them.

I think it’s the Kindle that may actually have been responsible for Amazon’s change of heart. Amazon says they’re now building “millions more” of the new Kindle Fire tablets than they’d expected, and they’ll presumably end up offering unlimited two-day shipping (and cheaper one-day shipping) to hundreds of thousands of new customers. And the best way to reduce those shipping costs is to have fulfillment centers in lots of different states. But this obviously makes it harder for Amazon to avoid state sales taxes by then claiming, as they have in the past, that Amazon doesn’t have a “physical presence” in a state. Maybe Amazon’s just going to rely on a new tactic: the ability to pressure those states individually. Instead of a national sales tax, these new taxes will only be imposed at the individual discretion of each separate state legislature.

And that’s an area where multi-billion dollar companies like Amazon can still exert a lot of pressure…

The Wise Guy Who Predicted the Future

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Evan Prodromou sends a funny letter to Jeff Bezos about books for dogs and the Kindle

My friend Evan Prodromou’s a funny guy. Nearly ten years ago, Amazon sent him a promotional e-mail that was written in the voice of Jeff Bezos, Amazon’s CEO. (“We’re doing an important test at Amazon.com that we wanted you to know about. Starting today, as a long-term test, you can get Free Super Saver Shipping on orders over $49…”) They even sent it from an e-mail address that made it look like a personal e-mail — JeffB@Amazon.com

So Evan took it on himself to write back!

“Cool! I appreciate your time and effort in personally overseeing this project and making sure I’m kept abreast of the situation. Others may say you’re getting too big for your britches, Jeff, but us here on the ground, where the action is, we know you’re Amazon.com, heart and soul. True blue, baby!”

Today I went back and re-read that e-mail, and I had to laugh, because part of Evan’s e-mail seemed to foreshadow the invention of the Kindle! One of Evan’s suggestions — all the way back in 2002 — was for Amazon to develop “a way to teleport books directly into customers’ laps!” It was his way of teasing Amazon that they should be thinking bigger than just “free super saver shipping”.

    JB> It may be the most important experiment
    JB> we’ve done to date.

Holy crap! The most important experiment to date!!!! Perhaps it’s anti-gravity books? Or CD-in-a-pill? Personal Amazon moon-car?

    JB> Starting today, as a long-term test, you can
    JB> get Free Super Saver Shipping on orders
    JB> over $49. Previously, only orders over $99
    JB> qualified.

WHA…?! That’s the MOST IMPORTANT EXPERIMENT TO DATE? A $50 drop in the qualifying price for free shipping?

I dunno what the hell’s going on there at Amazon.com Laboratories, Jeff, but, DUDE, you’re paying those eggheads TOO MUCH. From any angle you look at it, this is a STUPID experiment…

That’s not how you get to be Time’s Man of the Year two years running, Jeff. C’mon.

I guess I’m just trying to give you some friendly advice, Jeff, since you took the time to write me this personal email. Let me be blunt, Jeff: you are betting on the WRONG HORSE. I can think of like 50 experiments that are better than this experiment. 500! EASY! What about…

* TELEPORTING books directly to customers’ laps?


Okay, there were also some other suggestions (at least a few of which involved pornography). But I feel like this e-mail really preserved a moment in time. It was June of 2002, and just six months after the day Amazon announced their very first profits. Now they were making a big push to expand their sales — starting with lower shipping costs.

But meanwhile, geeks like Evan had just lived the “dotcom boom,” and all the excitement — not just of a sudden explosion in e-commerce, but also of self-publishing personal web sites. If nothing else, this made it easier than ever to tease the CEO of a major corporation. Especially when he sent you his e-mail address!


I mean, the list goes on and on. These are EXPERIMENTS, Jeff. I think what you’re describing is more like a “trial balloon.” And you know what? NO DOT-COM has ever won the Nobel Prize for TRIAL BALLOONS. Look it up, you’ll see I’m right.

    JB> This past January, we launched everyday,
    JB> 365-days-a-year, Free Super Saver Shipping
    JB> on orders over $99, and it’s been
    JB> successful. Customers have adopted it
    JB> in large numbers (it takes 3-5 days longer
    JB> than our standard shipping, but it’s
    JB> free), and its proven economically
    JB> sustainable for us as well.

Blah blah blah. Jeff, it looks like you bought this load of baloney hook, line and sinker. LISTEN TO YOURSELF. Just stop for a second and listen to yourself. Do you believe ANY of this…?

Dude, I know it was with personal feelings that you sent me this email and stuff, and I’m trying to slog through it, but I have to tell you that you’re boring me to tears. You sound like a marketing wonk! You do! Really!

And that’s not the Jeff Bezos I know! That’s not the Jeff Bezos who solicits my personal opinion on things. The Jeff Bezos *I* know is a VISIONARY. He’s the ONE-EYED MAN, baby! He doesn’t get caught up in this mincy-prancy N-months M-dollars hoohaw. That’s for the LITTLE PEOPLE. That’s for the functionaries and the sawdust people.

I mean, the Jeff Bezos I know, he’d be in a meeting with some balding weirdo beancounters with green visors and arm-bands, who are droning on and on to him about the niggling details of this so-called experiment, and he’d be pretending to listen to them, and then he’d stand up and say,

“BOOKS FOR DOGS!”

And the little people, they’d get all agitated and confused, because they don’t understand VISION, Jeff, you have to show it to them, but Jeff Bezos, he’d continue,

“Books for dogs! There are what, 380 million dogs in America today? Maybe 8-9 billion worldwide? North American pet-product sales — what is it, $4 trillion per annum? We need a piece of that pie! And what better way than to sell BOOKS for DOGS to READ! YOU, STANLEY! Yes, you! Run with this idea! You’ve got my full authority to make it happen — community canine literacy programs, drool-proof paper, get some celebrity dog writers like Rin Tin Tin and Benji. THE WORKS. Report to me in three weeks! And I want an Amazon.com product next to every dog bowl in this country when you get back!”


“See, that’s the kind of thing Jeff Bezos does,” Evan concluded. And it’s fun to imagine whether the real Jeff Bezos ever actually read Evan’s reply. If he did, he was probably laughing hysterically. But I also wonder if that’s the reason Amazon eventually stopped sending out e-mails that seemed “personally” written by Jeff Bezos. To avoid the earnestly mocking responses from people like Evan who actually wrote back….


Dude, listen: I’m here for you. I’ll continue to buy books from Amazon.com, and if this “experiment” doesn’t work out, you’re welcome to come stay at my place for a few weeks till you get back on your feet.

Also, listen: it was a good idea for you to run this concept past me before announcing it to the general public. I hope I’ve convinced you to really give it long hard look-over. At the very least, consider some way to work in lasers to the equation. Some science stuff, you know…?

    JB> Sincerely,

    JB> Jeff Bezos Founder & CEO Amazon.com

Hey, so, I hope you don’t mind if I just call you “Jeff”, OK? You can call me “Evan” or even “Ev” or “The Evster” or whatever. Just feel free…

Stick with me, man! We’ll go far.

Sincerely,

~ESP


It’s been almost ten years, and I had to find out what happened. Evan was always equal parts enterpreneur and computer programmer, and he eventually co-founded a popular travel web site called WikiTravel. Later he founded identi.ca, an open-source site for status updates (like Twitter), and became the lead developer at StatusNet, which promotes open and standardized status updates which can be easily distributed across different microblogging communities.

But all these years later, I still felt like I had to ask Evan about his crazy 2002 e-mail — because after all, Amazon did implement one of his suggestions. With a Kindle, it now really is possible to teleport an e-book directly into customers’ laps. So what does he think now about the visionary thinking of Jeff Bezos? I asked Evan, and he answered with a single sentence.

“I’m still waiting for Books for Dogs.”

Is the Kindle Hurting Amazon’s Profits?

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Amazon stock dropping chart

Tuesday night, Amazon told the world what they’d earned over the summer — and the news sent a shock to their investors on Wall Street. At one point overnight, Amazon’s stock lost 19% of its value, according to Bloomberg News. And analysts seem to be placing part of the blame on the Kindle.

“We’re not seeing the investment pay off yet,” an analyst at Evercore Partners told Reuters, adding “I think investors are impatient as to how long will it take…” Though he didn’t directly mention the Kindle, it’s clearly been one of Amazon’s biggest investments in 2011 — and another executive at a sales software company specifically pointed to its impact on Amazon’s profit margins. “The revenue is a little light, but margin is where the biggest variance is from Wall Street’s expectations,” Scot Wingo explained to Reuters on Tuesday.

“This is largely due to Amazon’s investment in the Kindle Fire.”

According to Bloomberg News, Amazon “reported a plunge in third-quarter profit after it ramped up spending on new products such as the Kindle Fire tablet.” They reported that analysts were expecting much more from Amazon — though the article was also quick to identify what may turn out to be the silver lining. “Even as profit shrinks, revenue is benefiting from surging Kindle orders, propelled by customers ditching paper books in favor of electronic versions.”

In fact, Amazon’s net sales increased a whopping 44% from where they were a year ago, to $10.88 billion dollars for just the three months between July and September! And Amazon has a long history of seeking more customers rather than more profits in order to expand the company. I remember the day in 1999 at a dotcom where I worked, when a co-worker scoffed that Amazon had never — ever — actually reported a profit. Two months later, our own dotcom failed. (In fact, the man who’d told me that went to work for another dotcom — which then also failed within five months.) But exactly two years later, Amazon reported their first profit in 2001. And of course, Amazon.com is still there a decade later — and it’s now the world’s largest online retailer.

So instead of adopting a short-term focus, I look at how Amazon’s positioning themselves for the future – and today, Amazon dropped some interesting clues. CEO Jeff Bezos revealed that the day they announced the new Kindles in September “was the biggest order day ever for Kindle. Even bigger than previous holiday peak days!” Plus, they’re selling more of them than they did past versions of the Kindle. “In the three weeks since launch, orders for electronic ink Kindles are double the previous launch,” Bezos said in a statement.

“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.”

I wondered if that’s why Amazon scheduled their press conference for the last days of September — so they could count those pre-orders as part of Amazon’s profits for the summer quarter. (And it gives Amazon a way to show investors they were offseting all the costs of building them!) But Bezos’s statement also seems to imply that Amazon’s now expecting to sell at least two million more Kindles than they’ve already sold. It’s a guess that’s echoed by an analyst at Barclays Plc, who’s predicting that Amazon will sell 4.5 million in just the last three months of 2011. That’ll add up to nearly a billion dollars in Kindle sales for just 92 days!

Tuesday’s drop in Amazon’s stock price meant that at one point poor Jeff Bezos had seen his portfolio drop $4.67 billion within just a few hours, according to Bloomberg. And buried in their article was another small piece of bad news. Over the summer Amazon also lost more than half a billion dollars in shipping costs, spending $918 million in shipping expenses while taking in just $360 million to cover it. Bloomberg attributes that partly to Amazon’s “Prime” shipping service, which grants unlimited two-day shipping for a flat once-a-year fee of just $79. Fortunately, Amazon’s added new warehouses in over a dozen states to keep shipping costs lower — but of course, that’s also cost them some extra money just to get them set up!

It’s fun to go back and look at what Bezos was telling investors before Amazon revealed their Kindle Fire tablet. At a time when it seemed like Amazon was simply spending money on research, Bezos told the audience that “We are planting more seeds right now.” Historically Amazon has endured some scorn for their strategy of growing their customer base rather than grabbing easy profits. But Amazon’s response has always been that once people became regular Amazon customers, they also generate regular profits for Amazon — month after month.

I think Amazon’s making some of the right moves — which may be absolutely necessary if they’re going to survive in a digital age which has already sent Borders’ printed-book stores into bankruptcy. After all, Amazon built their business selling printed books, and they’re trying to ensure that they don’t get left behind when a new book-reading technology comes along. In just the month of July, seventeen publishers reported a total of $82.6 million in ebook sales, according to Publisher’s Weekly, which also noted that this sales figure was 105.3% higher than in July of 2010. In fact, that was the smallest year-to-year increase seen so far in 2011, and for the year, total ebook sales increased by 152.8% — to $560.5 million. Amazon’s trying to position their book-selling business so sales can continue long into the 21st century. This means if you wanted to bet on Amazon’s future prospects, Tuesday’s stock market turmoil was actually good news.

Because if you’ve ever wanted to buy Amazon’s stock — now it’s a lot cheaper!

What’s Changed in Amazon’s 4 New Kindles?

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Amazon's new touchscreen Kindle Touch

UPDATE: For Black Friday weekend, Amazon’s also offering a 32% discount on their old tablet-sized Kindle DX!

Wow! Amazon announced four new Kindles yesterday, including a cheap $79 Kindle. (I’ve spent the last 24 hours studying all the cool new features!) As expected, Amazon announced a color, iPad-style tablet, and they also announced three new versions of their beloved black-and-white, e-ink Kindles. All but one of the new devices come with a touchscreen keyboard (instead of having a keyboard built into the plastic frame), and Amazon will start shipping them to customers on November 21!

The most interesting surprise was that cheap $79 Kindle. It’s a new version of Amazon’s “Special Offers” Kindle, which uses slick advertising images for screensavers (and offers other deals at the bottom of its Home page). The earlier version became Amazon’s best-selling Kindle, due to its low price of just $114. Now the new version is $35 cheaper, though for $30 more, you can get another version without the special offers.

They’re calling this $79 one simply “Kindle” — a plain, bare-bones name for the simplest edition of their expanded “line” of Kindle products. And the older Kindle 3s are now referred to as the “Kindle Keyboard,” to distinguish them from the newer Kindles (which all have only a virtual on-screen keyboard.)

The screen on the new $79 “Kindle” is still six inches (diagonally), though the device is now 18% smaller — just 6.5 inches tall — because Amazon’s replaced the built-in keyboard with a virtual keypad “that appears just when you need it.” It’s also 30% lighter than previous Kindles, weighing less than 6 ounces. (Previously the lightest Kindles were 8.5 ounces – and even the smallest Nook weighs 7.48 ounces!) But the biggest difference is its low price. Remember how exciting it was when refurbished “Special Offers” Kindles appeared for $84? Now the everyday price is even cheaper!

It’s a WiFi-only Kindle — but there’s some things to watch out for. For example, its battery life is half that of the Kindle 3. It’ll still last a long time — one month with the wireless turned off, versus two months for the Kindle 3. The $79 Kindle also got half as much storage space as the other Kindles, with just 2 gigabytes (instead of the 4 that you’d find on the other new e-ink Kindles or even a Kindle 3). And it also doesn’t have any audio capabilities, as far as I can tell. But there’s another new version of the Kindle which sells for $99 called “Kindle Touch.” Amazon describes it as “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.”

It also ships with the “Special Offers”, and it seems to be very similar to the new $79 Kindle, except its battery life is twice as long. Like the $79 Kindle, the $99 version can also only connect to the Kindle Store and the web through a local WiFi connection, though there’s also a 3G version for just $50 more (which also ships with the “Special Offers”). Ad-free versions of both the 3G and WiFi Kindle Touch are also available for $40 more.

“The new, latest-generation Kindle is for readers who want the lightest, most compact Kindle at an incredible price,” Amazon’s announcement explained yesterday. So what else is new in the Kindle Touch? There’s a special feature called X-Ray which Amazon says will let customers “explore the ‘bones of the book.'” With one tap, it’ll display all the passages in a book which mention characters, places, or historical figures and important ideas (and other topics of interest). “The vision is to have every important phrase in every book,” Amazon explained in their press release. “Amazon built X-Ray using its expertise in language processing and machine learning…and a deep library of book and character information.”

X-Ray will include pointers to each book’s Wikipedia page — and it also displays information from Shelfari, an online book community that Amazon acquired in 2008. (It’s a kind of social networking service for book lovers.) On Shelfari’s web site, users create virtual bookshelves, where they can review and rate books they’ve read, and even tag and discuss them. But on the new Kindle Touch, users can access a book’s plot summaries, quotes, character descriptions and other “fun book factoids”.

I was hoping Amazon was going to announce a big upgrade for the web browsers, but it looks like they saved that for their fourth new Kindle — the color, 7-inch tablet, “Kindle Fire” tablet. Amazon called it “a new class of Kindle that brings the same ease-of-use and deep integration of content that helped Kindle re-invent reading – to movies, TV shows, music, magazines, apps, books, games, and more.” Translation: it can play video, and it makes it easier to shop in the Kindle store.

It lets you shop for over 100,000 movies and TV shows to watch in Amazon’s online video store, and over 17 million songs from Amazon MP3. (And if you’re a member of Amazon’s “Prime” shipping service, over 11,000 movies and TV shows are free!) Amazon will always remember your position in a video if you need to finish watching it later — just like they do for Kindle ebooks. And obviously, the Kindle Fire can also display ebooks, many of which are now in full-color, including “thousands” of bestsellers, children’s books, comic books and cookbooks.

To showcase its color screen, Amazon’s landed the exclusive rights to 100 different graphic novels from D.C. Comics, including Alan Moore’s Watchmen, “which has never before been available in digital format.” Other graphic novels available exclusively on the new Kindle Fire include Batman: Arkham City, Superman: Earth One, and Green Lantern: Secret Origin. And of course, you’ll also be able to read newspapers and magazines in a new full-color layout on the Kindle, including USA Today, Wired, and The New Yorker. And in addition, Amazon has announced that Kindle Fire owners “will enjoy an exclusive free three-month trial to 17 Condé Nast magazines, including Vanity Fair, GQ and Glamour.”

And naturally, the device will run apps from Amazon’s app store, including popular games like Angry Birds and Plants vs. Zombies. (To draw customers, Amazon is still continuing their tradition of giving away a new paid app every day for free.) “Amazon designed the Kindle Fire user interface from the ground up to make it easier than ever to purchase, manage, and enjoy your digital content,” Amazon said in a press release Wednesday. “Just like with Kindle e-readers, Kindle Fire comes automatically pre-registered to your Amazon.com account so you can immediately start enjoying your digital content…”

Its screen is one-inch larger than a regular Kindle’s screen, and “the Kindle Fire display is chemically strengthened to be 20 times stiffer and 30 times harder than plastic,” according to Amazon, “which means it is incredibly durable and will stand up to accidental bumps and scrapes.” It displays 16 million colors in high resolution, and will weigh in at 14.6 ounces.

But putting all the technical specifications aside, Amazon’s CEO Jeff Bezos offered a much simpler description, calling it “a beautiful, full-color Kindle for movies, TV shows, music, books, magazines, apps, games, web browsing, and more, for only $199.”

Let the new era of Kindles begin!

Click here to see all of Amazon’s new Kindles

Is Amazon buying Netflix?

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Image of Amazon tablet Press Conference announcement September 28th

People were baffled when Netflix created a separate service for customers who wanted to watch “streaming” movies online. (This week Netflix shifted its core business — where DVDs are mailed to your home in a red Netflix envelope — into a separate subsidiary.) But at least one analyst thinks it’s a smart move that could pay off for the company’s investors — because it makes it easier for Netflix to merge with Amazon!

“If Amazon were to acquire only Netflix’s streaming business, it could triple the size of its content library, and gain traction as an industry leader…” argues Michael Pachter at Wedbush Securities. Originally he’d assigned an “underperform” rating to shares of Netflix, but this week he’s switched that to an “outperform” rating. “Netflix’s financial flexibility is quite limited, while Amazon’s is virtually unlimited,” Pachter argues. With billions of dollars in new money, the Amazon/Netflix hybrid could acquire the rights to stream even more movies and video content online.

But of course, that’s just the beginning. Amazon really wants to stream movies to your Kindle — or at least, to a next-generation Kindle with a color screen that’s been optimized for video. Any day now, Amazon’s expected to announce a fancy iPad-style “tablet” computer, a touchscreen device which displays ebooks (like the original Kindle), but which can also handle movies. A blogger at TechCrunch claims to have seen a prototype, which offers a slick “carousel” interface where you rotate a circle of (color) thumbnail images that represent your movies, apps, mp3s , or books.

It’s a brilliant marketing move, because they’d all be purchased through Amazon.com. And Amazon already has a vast library of “content” available for purchase, including ebooks, music downloads, and online movies. They’d basically create a slick new device for delivering all that content to their customers — and all that content would also help them to first sell the device! (Apple’s iPod was successful because of all the songs available in the iTune store, while the iPad’s received complaints because there aren’t enough ebooks in its iBookstore.)

I think the Kindle convinced Amazon that a great device can create a big wave of new loyal customers, plus a lot of new sales. Amazon has billions of dollars to spend, plus a payroll filled with clever engineers, so they’ve got everything they need to create the next big and exciting gadget. Not everyone’s convinced that they’ll stock their content libraries with Netflix’s streaming movies. (In the comments at ZDNet, someone suggested NetFlix might form a super-company instead with Hulu.com, teaming up to offer an even bigger library of online video!)

But there’s one last piece of information that suggests that Amazon’s planning something big, and that it’s going to happen this Wednesday. “Press invites just went out for an Amazon press conference next Wednesday in New York,” reported a blog about technology at MSNBC.

It could be an announcement that Amazon has acquired Netflix, but the blogger speculates that “doesn’t go to New York for anything but the biggest of product launches anyhow. So we’re going to assume that the long-awaited tablet is finally here.

“And if the rumors are true, boy, will it be an earthshaker.”

Kindle eBooks from Your Public Library! The 8 Biggest Advantages

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Carnegie Public Library

It’s happening! Today Amazon announced that all across America, they’re making Kindle ebooks available for free through local public libraries! (“Libraries are a critical part of our communities,” Amazon said in today’s statement, “and we’re excited to be making Kindle books available at more than 11,000 local libraries around the country!”) Amazon also posted the news on the Kindle’s page on Facebook — and within one hour, nearly 2,000 people had clicked on its “like” icon.

Here’s eight reasons why this is very exciting news.

– You can even read them if you don’t own a Kindle!
The library ebooks are also compatible with Amazon’s free Kindle apps. This means that even people who don’t own a Kindle can still read Kindle ebooks that they’ve checked out from the public library on their iPhone or iPad, and on Windows and Android smartphones, tablets, and desktop computers (as well as on Blackberry devices).

– You can read them in a web browser
Last month Amazon released the Kindle Cloud reader for the Safari and Chrome browsers. It’s a full-color application for reading Kindle ebooks on a desktop computer — or on a tablet (like the iPad). Amazon originally just wanted to create a way for their customers shop in the Kindle store on Apple devices. But now those same customers can also check out Kindle ebooks for free from their public library.

– You can highlight passages in the library’s ebooks
I’d never use a highlighting pen on the library’s only print copy of a book. But when you check out a virtual ebook, you’ll be able to fill it with your own virtual highlights and notes. Amazon will sync
them to your account, so whenever you check out that ebook from the library, you’ll still be able to see your original highlights and notes. And you’ll always be able to access them through Amazon’s special web page for highlights, at kindle.amazon.com.

– 24 Hour Access, From Home
My local library keeps reducing their operating hours — but fortunately, their Kindle ebooks can be checked out using the library’s web site! (After selecting your book, just sign into your Amazon account, which is linked to your Kindle or your Amazon reading apps.) You don’t have to make a trip to the library just to get new ebooks — and you don’t ever have to drive back there again later to return them!

– It Even Works with a WiFi-only Kindle
The ebooks aren’t delivered using Amazon’s WhisperSync technology, so you’ll receive them by making a local WiFi connection. (And they can even be transferred to your Kindle using its USB cord!) Obviously Amazon’s not earning any money when customers check out a Kindle ebook from their public library…but they’d otherwise still have to pay for the cost of every download (since Amazon buys its wireless “bandwidth” from AT&T).

– Long Check-Out Periods
Amazon didn’t put any restrictions on how long the ebooks can be checked out. (On their help page, they stress that you should contact your local library for the length of the check-out period and the availability of specific ebooks.) But Amazon still lets you know when you’re getting close to the end of the library’s check-out period. “Three days before the end of the loan period, we’ll send a courtesy reminder e-mail about the loan expiration,” Amazon explains on their web page. (Adding that “Once the loan period has ended, an additional e-mail notification will be sent.”) Again, the length of the check-out period is set by your local public library. (And thankfully, it looks like there won’t be overdue fines for ebooks!)

– Good Technical Support
Amazon’s created a special web page offering answers to the most frequently-asked questions, and there’s also a dedicated e-mail address just for feedback about the Kindle Library Books (at kindle-publiclibraries-feedback@amazon.com ).
Users can also see how many days are left in their check-out period just by visiting the library’s web page, or on their “Manage Your Kindle” page at amazon.com/myk .

– They’re Everywhere!
Amazon’s offering Kindle ebook check-outs through the OverDrive system, which has already been set up in over 11,000 American public libraries. “We’re thrilled that Amazon is offering such a new approach to library ebooks…” said the librarian at Seattle’s public library, adding that it “enhances the reader experience.”

“This is a welcome day for Kindle users in libraries everywhere and especially our Kindle users here at The Seattle Public Library.”

Amazon Considers a NetFlix for Books

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NetFlix envelope

For the last few days I’ve been fighting a bad cold — and mulling an article that appeared recently in The Wall Street Journal. “Amazon.com Inc. is talking with book publishers about launching a Netflix Inc.-like service for digital books,” the Journal reported, “in which customers would pay an annual fee to access a library of content…”

The newspaper cites “people familiar with the matter” — though I have to cringe every time I read that. In July, the Journal used the same words to describe the informants who’d said Amazon would release two new versions of the Kindle — one cheaper, and one with a touchscreen — before the end of September. There’s just 10 days left in September, and we still haven’t seen any new Kindles yet. But it’s frustrating because I do trust the Journal’s sources. I think they’re correct about Amazon’s general plans, and just can’t pinpoint every detail with 100% accuracy.

And even if Amazon wants to offer a “NetFlix for books,” it’s not clear that book publishers would agree to the same model. “Several publishing executives said they aren’t enthusiastic about the idea, the Journal reports, “because they believe it could lower the value of books and because it could strain their relationships with other retailers that sell their books.” Amazon’s tried to sweeten the deal by offering publishers a hefty fee for participating. And at least some of the paper’s sources said that Amazon’s program would include a cap on the number of books available for free each month. (It’d be similar to the way NetFlix sends some members a specific number of DVDs each month from the top of their “upcoming” queue.)

It’s an interesting idea – and it’s fun to imagine all the ebooks that I’d read if I didn’t have to pay for them individually. Amazon told publishers they were considering “older titles” for the program, so it
wouldn’t necessarily cannibalize any sales from the publishers’ new releases. In fact, if done properly, a program like this could increase interest in new releases. For example, the newest book in an ongoing
series could only benefit if a NetFlix-like program introduced new readers to the series’ first books.

But of course, this idea will make much more sense if Amazon releases an iPad-style tablet. Obviously Amazon plans to send movies and music to the multimedia tablets — purchased from Amazon’s online store.
(And of course, Amazon has already built another store that sells apps for Android devices.) To make it even more appealing, Amazon’s also created some phone applications, so if you buy your Kindle an audiobook from Audible.com, you can even listen to it on your Android smartphone too. Amazon’s delivering on a trendy new concept — offering an easy-access “cloud” where any kind of content can be easily stored for later retrieval using any device. But I think ultimately Amazon wants people to see them as a one-stop shop for everything — movies, music, audiobooks and, yes, ebooks!

I think their whole long-range plan is to make it easy to buy things from Amazon — and their new tablet would be basically a portable “Amazon shopping device.”

And to sweeten the deal, I’m sure Amazon would love to be able to offer subscribers an all-you-can-eat deal on ebooks!

The Great Sales Tax War

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Amazon referendum vs California state sales tax

Amazon’s come up a with a clever way to avoid a new sales tax enacted by California’s governor. If Amazon can collect 504,759 signatures, that law instantly goes away.

At least for a while. If Amazon can gather enough signatures to simply qualify for a “referendum” vote in California’s next election, “the new sales tax law would be suspended,” one of Amazon’s lawyers told a Sacramento newspaper. The next election probably won’t be held until June of 2012, the newspaper reports, giving Amazon almost a year before they’d have to pay the state’s sales tax. One pro-tax group argued it’s proof that Amazon “will say and do anything to maintain an unfair competitive advantage over brick-and-mortar businesses in California.”

Of course when Californians file their state tax returns each year, they’re supposed to calculate how much sales tax they owe for all their online purchases during the last year – and then add that amount in to their total tax due. But California apparently feels this “honor system” isn’t bringing in that money — and neither does a columnist at Slate.com. “Technically, then, if I buy a $1,000 laptop from Amazon, I’m supposed to pay a $90 use tax when I file my taxes to my home state of California at the end of the year,” writes Farhad Manjoo. “I’ve never done this, and I bet you haven’t either – almost nobody does, because states have no good way to enforce use tax collection.”

“The customers need to keep it honest and quit looking at shopping online as a way of avoiding sales tax,” complained one comment at Slate.com. But maybe it’s Amazon’s secret weapon. In a recent yearly report to the Securities Exchange Commission, Amazon implied that their customers simply think they’re getting a better deal than they would at offline stores. “A successful assertion by one or more states . . . that we should collect sales or other taxes on the sale of merchandise or services could . . . decrease our ability to compete with traditional retailers and otherwise harm our business.”

Amazon’s surprising admission was unearthed by the Center on Budget and Policy Priorities, a non-profit think tank which also took a close look at some comments from Amazon’s CEO. In 2008, Jeff Bezos told Amazon’s shareholders “The problem is that there are . . . tens of thousands of separate sales tax jurisdictions, it’s not just 50 – one for each state. It’s horrendously complicated. . . The rules to obey in all jurisdictions are overly complex, and as a result, we have an undue burden on us.” There’s just one problem with that argument, according to the Center on Budget and Policy Priorities: “the company already calculates and collects sales tax in at least 44 of the 45 states that levy them for independent companies that sell their merchandise on Amazon’s website!”

Two weeks ago I wrote that Amazon’s stated their preferred solution is a uniform tax for all 50 states — but blogger Ezra Klein sent me an e-mail arguing that that’s a common delaying tactic. “[M]aybe they would prefer that. But it’s not a reason they shouldn’t have to pay the taxes assessed on all other businesses in that state. Saying you’d like to improve the income tax doesn’t mean you don’t have to pay it in the meantime.”

The state sales tax is supported by a group called “the Alliance for Main Street Fairness,” and Tuesday their spokesperson argued Californians should be worried by “The lengths Amazon will go to evade collecting sales taxes – even spending tens of millions of dollars on a ballot referendum.” Their web site argues the group only wants to eliminate a massive “anti-small business online sales tax loophole…that puts small brick-and-mortar businesses at a significant disadvantage…” And over in Berkeley California, Congresswoman Nancy Skinner tried to offer her best analogy to a reporter at Bloomberg News. “If I purchase from Nordstrom online, I pay a sales tax.

“Why should Amazon operate under a different set of rules?”

Amazon’s Response to the State of California

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Amazon vs the state of California's bear from flag


Amazon’s just closed the “Affiliates” accounts of everyone in California. (These accounts allow bloggers to link to items in Amazon’s store and receive a commission when someone purchases them.) California passed a new bill requiring more online retailers to pay sales tax, and within 24 hours Amazon closed every associates account in the state of California.

“We oppose this bill because it is unconstitutional and counterproductive,” Amazon wrote in their termination notice. “It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors.” Amazon clearly intends to stir political pressure against California’s lawmakers, going so far as to argue that “Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue.” They add that they “deeply regret” the closures, and end with a reminder that Californians can still purchase things from Amazon web sites (“to avoid confusion”).

Blogger Ezra Klein argues that Amazon opposes the bill because “it wipes out a price advantage they currently have against their competitors” — but I feel like Amazon’s position is more nuanced. Amazon says they’re already paying sales tax in a number of U.S. states, according to ZDNet — in Kansas, Kentucky, New York, North Dakota and Washington. Plus, Amazon recently expanded their physical presence into Arizona, Delaware, Pennsylvania, and Nevada, so they’ll presumably start paying sales taxes there as well.

“Look closer,” writes ZDNet columnist Violet Blue, “and you’ll see that Amazon is fighting state-by-state battles against increasingly irrational legislation.” In fact, earlier this month Jeff Bezos, the CEO of Amazon, specifically addressed the sales tax question during Amazon’s annual shareholder’s meeting. He was asked how he sees retail changing over the next decade, and how he’d resolve this online sales tax issue. Here’s how he answered the question.

“The right solution to sales tax in my view, and certainly this is Amazon’s position, and it’s been consistent. We’ve had this position for 10 years — is that the right place to solve this is federal legislation. There is an initiative called the simplified sales tax initiative. 22 states have already signed on. That legislation needs to get passed. I believe that that will happen in the time frame that you laid out. I hope it might happen much sooner than that. I think it’s the right thing to do, and I think it’d be great for Amazon.

“By the way…on the sales tax issue, keep in mind that in more than half of the geographies where we do business — certain states, as well as Europe and Asia — all together, more than half of our business is in jurisdictions where we already collect sales tax or its equivalent, like the value-added tax. So, you know, we’re very — this issue is — our position on this hasn’t changed. We think our position is a good one.

“And we’ll stick with that.”

Amazon Announces Their Favorite New Kindle E-Books

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Amazon's best e-books of 2011 list

Amazon obviously knows a lot about e-books, and they’ve just released their list of the best Kindle e-books of 2011… “so far”.

“This midyear retrospective highlights the best books released in 2011 between January and June,” Amazon explained in a press release. “Customers looking for great books to read this summer will find an eclectic list, from a faux memoir conceived as an introduction to a long-lost Shakespeare play to one of the most fantastic survival stories of World War II.”

I like the way they’ve filled their “best of 2011” page with several different lists — nearly a dozen — where Amazon’s selected the best books in different categories. There’s the best novels, the best biographies and memories, the best mystery and thriller e-books, and even the best books on business and investing. And they’ve also selected the best romance e-books of 2011 (so far) — and the best science fiction. Here’s links to all the different categories where Amazon’s chosen this year’s best e-books.

Fiction
Non-Fiction
Biographies and Memoirs
Business and Investing
Mysteries and Thrillers
Romance
Science Fiction
Teens

So what books made the list? #1 is “Lost in Shangri-La,” a non-fiction best-seller which Amazon picked as their favorite e-book for May. (In 1945, 24 airline passengers crashed in a New Guinea jungle, and the three survivors are “caught between man-eating headhunters and enemy Japanese” as they seek sanctuary in tribe of superstitious natives.) And Tina Fey’s humorous autobiography “Bossypants” has also reached the #6 spot on Amazon’s “best of 2011” list. (Amazon called the memoir it “Short, messy, and impossibly funny.”) Here’s the complete top 10.

Lost in Shangri-La by Mitchell Zuckoff
The Tiger’s Wife by Téa Obreht
In the Garden of Beasts by Erik Larson
Blood, Bones & Butter by Gabrielle Hamilton
The Tragedy of Arthur by Arthur Phillips
Bossypants by Tina Fey
22 Britannia Road by Amanda Hodgkinson
Before I Go to Sleep by S. J. Watson
Moonwalking with Einstein by Joshua Foer
Please Look After Mom by Kyung-Sook Shin

But Amazon also noted that Fey’s book was part of surprising trend. “Perhaps surprisingly, half of our favorite books so far this year were written by debut authors.” There’s even a first novel by comedy writer/actor Albert Brooks (who wrote and directed the movie “Defending Your Life” and supplied the voice of the father in Pixar’s “Finding Nemo”). Surprisingly, it turns up on Amazon’s science fiction list — though there’s also a few political jabs about the way America approaches social security, healthcare, and preparedness for natural disasters. Its title? “2030: The Real Story of What Happens to America.”

This list-making is one of Amazon’s favorite activities, according to their Managing Editor of Books. “Our goal with Best of the Year So Far is to go beyond our personal favorites and identify books that transcend genre,” he said in a statement Monday. “The books on our Top 10 list are engrossing reads that you could give to anyone, no matter what their taste.”

Did Amazon get it right? Click here to explore their “best of” lists yourself!

Is the Kindle Good for the Environment?

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Is the Amazon Kindle good for the environment

Last week in Seattle, Amazon held their annual shareholder’s meeting, and since it was also being web-cast I decided to sneak a listen. One of the very first things on the agenda was a shareholder’s request that Amazon report on how it’s handling climate change — how Amazon assesses its own impact through the release of greenhouse-gas emissions. And specifically: the environmental impact of the Kindle…

The measure was voted down — the same shareholders have apparently made the same request every year for the last five years — but I was surprised by one of the statistics they cited. “70% of S&P 500 companies and over 80% of Global 500 companies disclose this type of information through the Carbon Disclosure Project, including companies such as Google, eBay, Apple, and Target.” But it turns out Amazon’s CEO had already included some environmental information in his prepared remarks.

Jeff Bezos took the podium, and proudly talked about how Amazon had launched their “frustration-free packaging initiative” just a few years ago, “designed to eliminate wire twist ties, blister packs, and
those clear hard plastic packages that you need a small nuclear device to open. And usually they result in bleeding.” I was surprised, but it turns out he wasn’t kidding about the bleeding. “I use to know the statistic of how many emergency room visits there are per year from people trying to open blister packs.”

But more to the point: “It’s very frustrating as a consumer.”

And then Jeff Bezos schooled the audience, revealing the dirty secrets behind blister packs and elaborate four-color cardboard packaging. “They’re both designed for the traditional physical retail environment. The blister packs are important because you can see the product and seeing the product is part of on-shelf merchandising. And you often see small items in big blister packs. The reason that that’s done is to make shoplifting more difficult.”

“At Amazon we don’t need either of those. We don’t have either of those reasons. We get to separate the physical packaging of the item from the merchandising of the item. And we also don’t have to worry about shoplifting!”

The funny thing is that according to Bezos, it’s actually more expensive for manufacturers to add blister packs — so Amazon is working with manufacturers to create a different set of packaging for online shoppers. (Otherwise, as Bezos points out, “It’s expensive for the manufacturer, it’s inconvenient for the consumer, and it’s also very wasteful from an environmental point of view.”) Since Amazon launched this program in 2008, they’ve gone from just 250,000 items in frustration-free packaging to over 4 million, Bezos told his shareholders. “And this, by the way, does not include Amazon-branded items like the Kindle or our Amazon Basics line, which are also in frustration-free packaging,” he pointed out. “These numbers only represent our efforts working together with third-party manufacturers to get them to adopt our frustration-free packaging standards.”

Of course, Kindle owners probably care more about the answer to a more direct question: How many e-books do I have to read before I’ve saved a tree? Last year it was the subject of an article by Geoffrey Lean, a newspaper reporter identified by the Daily Telegraph as Britain’s longest-serving environmental correspondent. (He’s been reporting on the environment for almost 40 years). Lean reported there’s two theories about whether the Kindle (and other digital readers) are environmentally-friendly.


Gadget-lovers point out that the US printed word causes 125 million trees to be felled every year. The bookish retort that the e-readers take more energy to make, consume electricity, contain more chemicals, and create a greater waste problem when thrown away.

The real answer appears to hinge on how many books you read each year, Lean concludes, with different studies arriving at different answers. “One reckoned that you would have to get through 40 electronically each year to come out ahead, another made that 23, while a third concluded that the carbon produced in making each e-reader would be recovered by the trees it left standing in just 12 months.” His final answer was a little dissatisfying — that the greenest way to read “turns out to be old-fashioned. Get books – from a public library.”

And I’d argue it still remains an open question — since it still depends on how far you’ll drive to get to your public library!

More Secrets from Amazon’s Shareholder’s Meeting

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Amazon.com shipping boxes

I really enjoyed listening to Amazon’s shareholder’s meeting last week — mainly because Jeff Bezos, the founder of Amazon, fielded questions from the shareholders. He had an interesting perspective on the Kindle, but I also got a big surprise when one of the shareholders asked Bezos for an update on a new service called Amazon Fresh. “You didn’t mention that,” she said, adding “I see more trucks and more deliveries around town.”

“Amazon Fresh is a test,” Bezos replied. “It’s only in Seattle. And if the customer experience is good, the economics — we’re still tinkering… It’s an expensive service to provide.” My ears perked up as Bezos explained that it’s a similar service to what HomeGrocer and WebVan tried 10 years ago. (If I remember correctly, both those businesses offered home-delivery of fresh groceries!) HomeGrocer was eventually bought by WebVan, and then WebVan was eventually bought…by Amazon. “It’s an expensive service to provide,” Bezos told the shareholders. “So we are — you know, we’re basically working on it here in Seattle, seeing if we can get it to work.”

“We like the idea of it, but we have very — you know, we have a high bar of what we expect in terms of the business economics for something like Amazon Fresh in terms of profitability and return on invested capital. So we continue to think about that.”

I had no idea Amazon was quietly working on a grocery-delivery business – but it proved that behind the scenes, Amazon is always quietly planning more big things. My favorite question came from the shareholder who noted that early in Amazon’s history, “there were several notable missteps, either partnerships or initiatives that just didn’t work out. But lately it seems like Amazon has been executing really well. And so my question is really about risk. Is it still Amazon’s philosophy to make bold bets?

“I would expect that maybe some of them wouldn’t work out, but I just, I’m not seeing that. So my question is where are the losers of the bold bets?”

“In a way,” answered Jeff Bezos, “that’s like the nicest compliment I’ve ever gotten!” Bezos acknowledged that the Kindle (and Amazon Web Services) have both worked out very well, saying some of Amazon’s success was luck, but that Amazon also has a lot of experience and knowledge. “Go back in time. We started working on Kindle almost seven years ago. And that is a very difficult — you know, there you’re just — you have to place a bet. Now these are not — if you place enough of those bets, and if you place them early enough, none of them are ever betting the company. By the time you’re betting the company, it means you haven’t invented for too long.

“If you invent frequently and fail — and are willing to fail, then you never get to that point where you need to bet the whole company.”

He told the audience that “We are planting more seeds right now. And I can guarantee you that everything we do will not work.” But he pointed out that when you stop investing in an idea that isn’t working, the company’s operating margins actually go up. So “My mindset never lets me get in a place where I think we can’t afford to take these bets, because the bad case never seems that bad to me.”

He was really on a roll now, and I found it very inspiring.


I think to have that point of view requires a corporate culture that does a few things. I don’t think every company can take that point of view… A big piece of what the story is we tell ourselves about who we are is that we are willing to invent. We are willing to think long-term. We start with the customer and work backwards. And very importantly, we’re willing to be misunderstood for long periods of time.

And I believe if you don’t have that set of things in your corporate culture, then you can’t do large-scale invention. You can do incremental invention, which is critically important for any company. But I think it’s very difficult if you’re not willing to be misunderstood. People will misunderstand — any time you do something big that’s disruptive – Kindle, Amazon Web Services – there will be critics.

And there will be at least two kinds of critics. There will be well-meaning critics, who genuinely misunderstand what you’re doing, or genuinely have a different opinion. And there will be self-interested critics who have a vested interest in not liking what you’re doing, and they will have reason to misunderstand. And you have to be willing to ignore both types of critics. You listen to them, because you want to see — always testing. Is it possible they’re right? But if you pull back and you say, “No, we believe in this vision.” Then you just stay heads-down, focused, and you build out your vision.

The Name “Kindle” — and Other Grammar Games

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Amazon's Jeff Bezos on the Kindle

Jeff Bezos doesn’t talk about “the Kindle.” Instead, he seems to say just “Kindle.” I spent an hour listening to the Amazon CEO speaking to shareholders, and I noticed this subtle difference. (“We started working on Kindle almost 7 years ago… When we launched Kindle less than four years ago, we launched Kindle with only 90,000 titles…”) So I went to the Kindle Boards — an online discussion forum about the Kindle — and asked the regulars if it sounded strange to them.

Someone offered a good explanation, that Bezos was referring not just to the device — the Kindle itself — but to Amazon’s entire project. (Like establishing the wireless connections, and creating an Amazon store filled with e-books.) Kindle is a brand — like Volkswagen or Pepsi — so while a single instance could be “my Kindle” (or “my Volkswagen” or “my Pepsi” ), you’re still talking about a larger concept — Volkswagen, Pepsi, and Kindle.

And of course, there were also some other funny responses in the forum.


it’s a great gadget, but it’s not some sort of celestial artifact that can be referred to only as “The Kindle.”

I always refer to it as “My Kindle”. -Just in case anyone gets any ideas about wanting to share

Honestly, around here it’s referred to as “that thing…you know…I read on it…THE THING…”

My Kindle is “Eleanor.”

It’s a question that may come up again. Amazon’s rumored to be building a new tablet-sized color Kindle — and if they do, they’ll have to come up with a good name for it. Today on a blog about Android devices, someone left a comment suggesting that they call it “The KPad.” And that’s probably catchier than if Amazon called it the A-Pad.

Maybe that just illustrates the problems you have trying to make names out of abbreviations. Even the word “blog” is an contraction that’s leftover from the early days of the internet, when online link aggregators were referred to as web logs. I heard that when the word was first coined, someone had joked that if you moved the space, it’d spell “we blog” — and the name stuck! (So does that mean that a Kindle blog is a…..Klog?)

It’s possible to think too much about where names might have come from, and someone once even argued that the name of this blog — “Me and My Kindle” — was terribly ungrammatical. (They posted “My Kindle and I, dummy,” as a comment on this blog’s page at Amazon.com). It took four months, but in April someone finally posted the perfect comeback.

“That depends if he is saying ‘My Kindle and I went shopping together,’ or ‘This blog is about Me and My Kindle!'”

Smiling Kindle with a smile on its face