#amazon

They did $16 million in sales and lost $5 million last year, so they’re more of a threat to their stockholders.

David Unowsky, owner of Hungry Mind Bookstore, who spoke to Jim Romenesko in 1997 for a profile on Amazon’s Jeff Bezos. 

Romensko dug up the entire article, entitled: THE HEIGHT OF ONLINE SUCCESS//TINY AMAZON.COM SQUARES OFF AGAINST INDUSTRY GIANT BARNES & NOBLE. (It wasn’t online, so Pioneer Press staffers had to pull it up from their own archives.)

It’s so full of win. Amazon had just gone public (in the thick of the dot-com bubble) and Barnes & Noble was just entering the web and everyone seemed sure they would crush Amazon. It’s something important for every entreprenuer to remember every time they hear “but what if XXXXX enters your business”?

Hungry Mind Bookstore, meanwhile, went out of business in 2004, as Romenesko notes. Yet the notion of Amazon as a “threat” to stockholders endures 16 years later. 

[via @carr2n]

David Streitfield:

Penguin and Random House were innovators who made paperbacks into a disruptive force in the 1940s and ’50s. They were the Amazons of their era, making the traditional book business deeply uneasy. No less an authority than George Orwell thought paperbacks were of so much better value than hardbacks that they spelled the ruination of publishing and bookselling. “The cheaper books become,” he wrote, “the less money is spent on books.”

Orwell was wrong, but the same arguments are being made against Amazon and e-books today. Amazon executives are not much for public debate, but they argue that all this disruption will ultimately give more money to more authors and make more books more widely available to more people at cheaper prices, and who could argue with any of that?

It will be interesting to look back on this in hindsight.

I’m not comfortable discussing the contents of that meeting.

Russell Grandinetti, Amazon’s vice president for Kindle content, in federal court when asked about a meeting that took place at Jeff Bezos’ Seattle boathouse on Sunday Jan. 24, 2010. 

That was a few days before the initial iPad announcement — where, of course, iBooks was also unveiled, kicking off the eBooks situation for which Apple is now on trial.

One important thing noted by Philip Elmer-DeWitt:

Several readers have asked how a witness under oath could get away with not answering a direct question. You’d be amazed at how much evidence in this case has been redacted because it contained trade secrets, business data, privileged conversations with attorneys etc.. Apparently Apple’s lawyer had been told in advance that there were Amazon lawyers present at the meeting in the boathouse, and he backed off as soon as Grandinetti declined to discuss what was said there.

If Grandinetti won’t talk about it because lawyers were present in the boathouse, that’s just about the worst way possible to phrase that.

smullllllllen asked:

I feel like your take on the Apple anti-trust situation misses the point. Having a monopoly is never itself a crime. Apple formed a collusive trust with the intent of disadvantaging consumers. Amazon may have a virtual monopoly, but it has only ever abused that position in a way that disadvantages itself (by selling books below cost) in order to benefit consumers (in the short run). Maybe predatory pricing like that should be illegal, but colluding to raise consumer prices is far, far worse.

All very fair points — if Apple is found to have colluded here.

And, just to be clear, I don’t disagree — I simply meant to point out what a strange antitrust trial this would be, given where the monopoly resides in this case.

A year in the making, one of the stranger antitrust cases you’re likely to see (because the defendant, Apple, doesn’t have anything close to a monopoly in the industry in question, eBooks — while the company that stands to gain the most from an Apple defeat, Amazon, basically does).

This all plays out starting tomorrow.

Update: For a little more clarity.

Todd Bishop on the new “Kindle Worlds”:

The company says it will license rights to popular books, games, movies and other content to let independent authors write their own stories based on those worlds, and receive royalties from sales of their fan fiction through the company’s Kindle Store.

Seems like a smart idea. Though I have to imagine the most popular worlds, like Star Wars, would never agree to this. 

Great profile of Reed Hastings by Ashlee Vance for Bloomberg Businessweek. Three standouts:

The master copies of all the shows and movies available to Netflix take up 3.14 petabytes of storage space. (In comparison, Facebook uses about 1.5 petabytes to store about 10 billion photos.) Hollywood studios used to send individual films and shows to Netflix on a disc or thumb drive; now they use a Netflix system called Backlot to send encrypted files via the Internet. Netflix then compresses the files and creates more than 100 different versions, each tuned for the varying bandwidth, device, and language needs of its customers. (An hour of video for the iPhone would be about 150 megabytes.) This compressed catalog comes to about 2.75 petabytes.

Wow — also, Pi.

And:

Netflix began to experiment with cloud services from Amazon and Microsoft, where Hastings served as a board member. In 2009 he bet his company’s future on Amazon. Up to that point, nothing the size of Netflix had placed so much of its crucial technology on Amazon’s systems. Hastings sent an e-mail to Amazon CEO Jeff Bezos, announcing his plans. “I asked him if he was comfortable with that idea,” Hastings says. “If not, there was no point going forward.” Bezos gave the go-ahead.

That seems like a pretty large diss of a company where he’s a board member — especially when you consider that Amazon is now a very direct rival.

And finally, the best for last:

Qwikster was a fiasco, but far less threatening than a debacle that preceded it. In August 2008, Netflix’s technology infrastructure melted down. This was when the company was still known for DVDs-by-mail, and for three days it could not send discs because a crucial Oracle database kept malfunctioning. Reporters and customers took notice. Netflix traced the problem to an expensive, third-party storage system that went haywire after a software update. The incident still annoys Hastings. When the subject comes up in the watchtower, Chief Product Officer Neil Hunt, who’s also gathered at the table, suggests they not mention the storage-system vendor by name. Hastings responds, “Let IBM have it, baby.” (An IBM spokesman declined to comment.)

Said another way.