Lots of electronic ink is being spilled this week over the question of whether Amazon is a monopoly and/or a monopsony. Many of the (now) smaller publishers are currently whining about that, and would like you to think so.
I don’t think Amazon has met the 90% criteria that Justice Learned Hand used to define the term “monopoly.” And, as pointed out in this article by David Gaughran, Amazon does not act like a monopoly. The important distinguishing point in Amazon’s approach (at least in book sales, around which most of the whining is centered) is that the traditional publisher is trying to tell the potential customer what they should buy — and Amazon is playing an entirely different game, which the traditional publishers seem unable to comprehend, much less compete with. Amazon is going to significant effort to figure out what the potential customer is most likely to buy next — and pushing that product directly to the consumer, even if it is from a direct Amazon competitor. Note that you can buy Nooks, iPads, and Surface tablets on Amazon.
The fact that traditional publishers are being blindsided by this strategy is the main reason for all of the wailing and moaning.
Amazon, of course, is not just a publisher. It is getting into just about any business it thinks will make boatloads of money. Such as streaming media, other electronic content, and services. Thanks to leadership that is almost monomaniacal about growth, business expansion is where most of that money is going.
In addition to selling an amazing variety of physical goods, Amazon is in the “infrastructure” business with its S3 and AWS services. In S3 and AWS, Amazon is not even the dominant player, but it has done well enough that Microsoft and Google (and others) have had to sit up and pay attention. This business is so fiercely competitive (there are staggering amounts of money to be made there) that the company with the best deal in that arena changes about once a week. So it’s clear that Amazon does not hold anything like a monopoly in that sector. I may be using AWS and S3 myself in the fairly near future, choosing that over the offerings of MS or Google, simply because it doesn’t matter much which of the Big Three I choose (they all offer really good deals, which are constantly getting even better), and I’m more familiar with Amazon.
Is Amazon a monopoly (or monopsony)? Not quite. Is there a limit to the growth of Amazon? Definitely, but they aren’t there yet.
The political/financial blogger with the ugly outdated WP theme is back again, predicting the stock price crash of Amazon. So naturally, shares of AMZN have gone… well, up and down a little. He’s still predicting an AMZN crash, and he might even be right. Or not. Could it be that Amazon is just plowing its earnings back into growth? Or investors expect all those new Amazon initiatives to pay off handsomely someday. If I really understood all that, I’d probably be rich. Like Jeff Bezos.
Meanwhile, over at Digital Reader, they are claiming to know the code names for the new Amazon tablets: Soho, Thor, and Apollo. Those were supposedly deliberately “leaked” by Amazon.
In the non-story of the week, GigaOm hints that it might be illegal to take your rented digital textbooks across state lines. Really? GigaOm author Ki Mae Heussner must have stayed up really late coming up with that one.
If you need a good laugh, Amazon has published a list of the funniest fake reviews. My favorite entry in that list is AutoExec 13000 Automobile Steering Wheel Attachable Work Surface. I had to quit reading after about 10 of them because my sides hurt too bad to continue.
Well, Apple lost big-time, convicted of being the ring-leader in a conspiracy with several other publishing companies to support lagging e-book prices by making it harder for Amazon to get access to the market. Or something like that. They got a fine, and some fairly onerous restrictions on the way they can do e-book marketing, which they really don’t like. And, in response to all that, Apple’s stock price went… up?
Amazon announced the creation of 5,000 new jobs (and invited President Obama to help them advertise it in a jobs speech at Amazon’s Chattanooga warehouse), but it seems that there are two groups who aren’t impressed. One Libertarian pundit claims that the Amazon job creation is actually negative, and that Amazon destroyed 5 jobs for every one they created. The other group that isn’t impressed is the American Booksellers Association, who are especially unhappy about Obama giving that speech at Amazon. Which is now available as a free (as of today, anyway) Kindle e-book.
Meanwhile, a fairly obscure political/financial blogger with a grossly outdated WordPress theme (the original one, I think) claimed over a year ago that Amazon stock was way overpriced. So, naturally, since that time, Amazon stock has gone… up? Maybe it’s that fantastically profitable cloud computing business (AWS) they are in.
If I really understood all that, I’d probably be filthy stinkin’ rich. If you understand all that, please feel free to enlighten me in the comments below.
Got Coins, Amazon? Oh, no, that’s Amazon Coins – to be released in May. What is Amazon Coins? It’s a type of virtual currency to pay for apps, and, I suppose to get people hooked, Amazon will be spreading them around quite a bit at first, for free. So, that brings on the question: what about the “free” apps of the day as they currently stand? Will they be paid for with “free” Amazon Coin? And then eventually will the “free” part disappear once we all get accustomed to the newness of it all? I guess only time will tell. In the meantime, get the details at the LA Times website.
You may have heard that Amazon is looking at ways to resell “used digital content,” aka e-books, and have even been awarded a patent to get going on this. Although not patented, ReDigi has already launched a similar marketplace with “advanced technology” that verifies as legal all goods listed for resale. (UPDATE: Thanks to commentary by Bob, who is more familiar with the situation, ReDigi has indeed been issued a patent for their approach.) At least one person, Nate Hoffelder, is pretty sure enough can go wrong that he wants no part of it! Mosey on over to The Digital Reader and see his rationale. My opinion is that, like with all things new, it will be awkward and inconvenient at first, and then people will get used to it, the technology will settle in, and eventually everyone will wonder what all the fuss was about. Kind of like vacuuming robots.
Cloudyn says if you use AWS database services, you (and your company) are probably using way more storage than you think you are (and paying for much more than you need to). Cloudyn’s business is helping customers minimize and optimize their use of AWS, so they do have a dog in this fight. See what the fuss is about at GigaOM.com.
And for the soft-hearted, as opposed, I suppose, to the hard-headed (did I hear someone call my name?) Amazon.ca reveals a list of the top 20 most romantic cities in Canada. I suppose that would make a wonderful trip for you and your sweetie, to wish each other a Happy Valentine’s Day! See what cities top the list!
According to Reuters, Amazon is going to have to fight a little harder for holiday dollars, due to Walmart, Toys ‘R’us and Target’s decision to compete more strongly for dollars this year. I mentioned this a day or two ago, and I think the competition between the online and the physical is going to get worse (for them) and better for shoppers! Read about it at Reuters.com, and then check my comments again a couple of paragraphs down on this post. It’s getting interesting!
Amazon is now linking its S3 storage service to Glacier – a data archival service from Amazon Web Services. ZDNet explains the situation.
Again getting a jump on Black Friday TV deals, Amazon is rolling out some additional name-brand specials. For myself I don’t care about TV’s but I’m looking for something to replace my 28” behemoth of a monitor that is starting to get flaky. They are hard to find! Anyway, if you are in the market for a television, read about Amazon’s deals on Consumer Reports. And if all this makes you wonder whether Amazon’s planning to have a physical presence…you are right! Good E-Reader gives us the heads-up on that, but please, Good E-Reader: check your spelling when you are citing your sources. There’s no “p” in Thomson Reuters. 🙂
Wow, the fight over streaming video is, um, expensive. Netflix CEO says that Amazon is losing money hand-over fist, trying to grab the market. Mashable Business Tells the story.
And finally, Jeff Bezos was named Fortune’s Businessperson of the year, according to VentureBeat. Read about his accomplishments in their post.
Well, I know I said “finally,” but I just want to give you a heads-up that we are going to be posting the next video sometime this weekend. Hope you enjoy. This will be a second look at the $20 Pandigital e-ink reader.