Guest author Derek Brown is a technology executive and analyst who blogs at One Blind Squirrel.

Jeff Jordan, a partner at Andreessen Horowitz with the Midas touch, recently opined that Amazon’s e-commerce capabilities and successes represent a meaningful threat to Google’s product-search-related advertising business.

I will take Jeff’s thesis — with which I fundamentally agree — one step (maybe even more) further by saying that I believe Amazon is one of the few companies that has the ambition, permission, structure, and, maybe most important, data, to actually beat Google at its own game.

What Makes Amazon Different

As an Internet equity research analyst from 1996-2009 — go ahead... throw your drink on your screen and curse me loudly enough that the barista hears you — I had a front seat to The Show. I covered Amazon from its days as “just” a bookseller and Google when it was still a private company, in addition to eBay, Yahoo!, Excite, About.com, Netflix, Omniture, aQuantive, CNET, E*TRADE, and many other industry-defining companies.

(See also: The Epic Battle Between Apple And Google Is Over)

From the earliest days, it was clear to me (and a few others, obviously) that Amazon was no ordinary company, at any level. However, three attributes set it (far) apart in my mind:

1. Vision and ambition that were orders of magnitude beyond those of others team that I encountered (until, that is, I met Google);
2. A cult-like dedication to customer experience/satisfaction that permeated every decision made by every person at the company; and,
3. A business model that not only valued long-term cash flow and absolute profit potential, but also deemed near-term profits and profit margin largely irrelevant.

Individually, these characteristics have been powerful; in combination, they have been revolutionary. Jeff Bezos’ worldview gave his entire team permission — in fact, it gave them the mandate — to think Big, with a capital “B.” Customers’ pure delight with every Amazon interaction gave the company permission to sell (almost) anything to (almost) anyone.

And, finally, management’s clarity of financial intent (i.e., to perpetually focus on long-term potential) has, from day one, conditioned shareholders and Wall Street to expect a business that will forever be amorphous and unpredictable, with razor-thin margins.

The Yin To Google's Yang, Sort Of

Liberated from more typical corporate constraints, Amazon has evolved like few other companies in history — from its humble origins as an online bookstore into: Amazon Elastic Cloud Compute, Amazon Marketplace, Amazon Flexible Payments Service, state-of-the-art warehouses (~70) everywhere, Amazon Cloud Player, AmazonFresh, Amazon Mechanical Turk, Amazon Prime, A9, Amazon Simple Storage Service, Diapers.com, Silk, Amazon Cloud Drive, Zappos, Amazon CloudFront, Kindle, and so on.

Sound familiar? It should, because this transformation mirrors that of Google, itself, which began as “just” a search engine company focused on “organizing the world’s information,” and has now become: Gmail, Maps, Apps, Drive, Chrome, Android, Motorola, YouTube, Wallet, Voice, Google Cloud Storage, Shopping, Chromebook, Google App Engine, Google+, and so on.

(See also: How Google Is Kicking Sand In Apple's Face)

While not perfectly matching each other solution-for-solution, Amazon and Google now find themselves overlapping across, and competing within, most major categories of Internet-fueled technology and business. SaaS. Hardware. e-Commerce. IaaS. Enterprise. Media. Consumer. Applications. Browsers. Storage. Payments. Consumer. Tablets. And so on.

Amazon's Trump Card: Data

Despite all these evolutions and comparisons and similarities and overlaps, I actually think there’s one final aspect to Amazon’s business with which Google cannot (yet) directly compete, and which may prove to be the difference-maker in this faux-ish battle: Data.

With 17+ years of history and hundreds of millions of transactions across almost every category of goods, Amazon now has massive quantities of data about the actual buying habits of tens, if not hundreds, of millions of consumers around the globe. Not just what people are searching for (Google, though Amazon.com actually has it too). Not just what people “like” (“like” that, Facebook).

(See also: Will Facebook Go Out With A Bang?)

Not just what people want (Pinterest, though Amazon.com actually has it too). Not just what people tweet about (Twitter). But the items that people actually pay for with their own hard-earned dollars!

Armed with this unique transaction- and SKU-specific data, at scale, Amazon.com has the potential to become one of, if not the most signficant advertising platforms in the world, in my view — matching, if not besting, Google.

Look at it this way: if advertisers pay Google $44 billion per year for connecting them with consumers that it oftentimes thinks have interest in their product(s), what might those same advertisers be willing to pay Amazon for connecting them with people they know are interested in their products (or those of their competitors, or those in which they will soon have interest)?

What That Data Might Be Worth

For instance, do you think Volvo, Toyota, Lexus, Ford, et al., might be willing to pay a small fortune to be introduced to an individual in Huntington Beach, CA, who suddenly begins buying newborn diapers by the pallet? What about Gymboree? Gerbers? Whole Foods? Safeway? Fab? Gap? Pottery Barn? Ross? Home Depot?

Similarly, how much interest might be generated among home decor vendors, local service providers (e.g., physicians, athletic clubs, veterinarians), home maintenance vendors, etc., by a change in shipping and billing information for one of Amazon.com’s long-time customers? Say, someone whose pattern of purchases are highly suggestive — remember, Amazon.com has developed one of the best predictive commerce models in the world for its own e-commerce franchise — of a home with at least one child and one dog, an avid athlete/runner/yogini, with a taste for gourmet cooking and a passion for gardening, among other attributes?

And these hypotheticals say absolutely nothing of the extraodinary value Amazon could (theoretically) deliver to its customers/partners by sharing with them relevant online transaction activity that might follow said advertisements, effectively offering a closed loop marketing environment unlike any other.

By some accounts, Amazon has (finally) started focusing on the business potential of advertising. For years, it has run ads on its own sites. Then, in late 2010, the company also began serving advertisements on others’ sites, introducing what is, in effect, a full-fledged online advertising network. But these are just warm-ups in my mind — Amazon methodically experimenting (as is its custom) and purposefully tiptoeing around the edges of its potential.

I’m convinced the day will come — sooner rather than later — when Amazon unleashes its data and announces itself as an advertising powerhouse. And, when it does, I think the gloves officially come off and the real battle with Google commences.

Lead image via Flickr user Jorge Lascar, CC 2.0

As cloud computing services become ever more popular, you might begin to wonder how much you can really trust them to perform when you need them? I decided to find out - by testing the top file-transfer/file-storage/file-backup services.

In many ways, getting a file from one computer to multiple computers is the most challenging task for the cloud. And because I like to use multiple computers running multiple operating systems, including Linux, Windows and the Mac, that function is particularly important to me.

Cloud Services Can Lag

I am pretty agnostic when it comes to cloud providers - as long as they are free or close to it. However, as I was moving files around while preparing my most recent book A Week at the Beach The 2013 Emerald Isle Travel Guide I was a little surprised at the lags I sometimes experienced using the big-name cloud-based file-transfer services.

More than once when I wanted to use a file from one computer to another, I was disappointed by my cloud services. There were a few times that I got so tired of waiting for a file to show up on my other computer’s cloud drive that I resorted to sneakernet using a USB thumb drive.

After my book was published, I decided to go back and run some simple tests to see just how long the four best-known file-transfer/backup services actually take to put the files where you want them.

To compare Dropbox, Google Drive, Amazon Cloud, and Microsoft’s SkyDrive I started by exporting a 500K JPEG test image from Lightroom on my Windows 8 computer directly to each of the four services.

Fighting The Randomization Factor

After running the tests a few times, I noticed what can only be described as random operating system differences. Sometimes the file would pop up first on my Mac and other times it showed up first on my Windows 7 laptop.

In order to eliminate the operating system differences, I restarted the tests and this time stopped the timer when the file showed up on either my Mac running Mountain Lion or my Windows 7 laptop. I also reran my tests with a variety of sizes and types of files. In all I ran twenty-five sets of tests.

The differences were significant, if not overwhelmingly huge. The fastest synchs took less than 3 seconds, while a few others took several minutes. The biggest chunk of tests clocked in between 10 seconds and one minute. A few synchs never completed. But which service recorded the best times with the fewest problems?

Dropbox FTW!

Dropbox ended up being fastest 56% of the time. Even more importantly, it was slowest only 4% of the time.

Skydrive brought up the rear. It was fastest on 12% of the tests, but but slowest on a whopping 80% of the tests. It also had two files that never showed up on the Mac and one that never showed on the Windows 7 laptop.

The Amazon Cloud slightly outpaced Google Drive - which had one file that never showed up on the Mac and another that took a very long time to complete.

If my tests convinced me of anything, it is that Skydrive is a work in progress and has a long way to go. I even had trouble setting up the tests on Skydrive.

My tests also revealed a number of odd results. When testing files saved from Word, strange extra files sometimes showed up on all the cloud drives except Dropbox. The file names always began with the characters “~$”. Sometimes the mystery files disappeared and sometimes they hung around.

Cloud Drive Recommendations

So here are some quick recommendations:

• First, do not treat your cloud drive as one huge dumping ground. Create folders and try to force a little organization on yourself.
• If you save a file to the cloud in order to work on it from another computer, quit the application or close the file on the first computer after you have saved the file to the cloud drive.
• Make sure you have a local copy of important files in your documents folder - not just the replicated cloud folder on your computer. Interesting things sometimes happen when cloud files get updated or deleted from another computer. When you come back to the computer where you first created a file, you could be in for a nasty surprise.
• If you cannot get a cloud folder on your computer to update, trying quitting the cloud application or rebooting your system.

Dropbox and Amazon appear to be the most reliable solutions with only occasional delays. Google isn't far behind, and I can't imagine that Microsoft won't work hard to improve Skydrive - the company's subscription model depends on it.

Even so, I have no plans to throw away my USB thumb drives.

Amazon's 1-Click arguably offers the best shopping experience on the Web—desktop and mobile.

But 1-Click has been slow to expand beyond Amazon's walls. While Amazon offers the convenient checkout service to retail-website builders, competitors are understandably loath to embrace the e-commerce giant's tools.

Now a wiser, bloodier Google has re-entered the fray, taking lessons learned from Amazon and applying them to its own "1-Click" solution for Google Wallet, Instant Buy.

But Google's road to riches won't lie through a button on a website. That's the route it took in traditional Web e-commerce, with its older Google Checkout service, which Wallet replaced after it failed to unseat PayPal and other, more traditional credit-card-processing services. Instead, Google's placing its bet on terrain where it has the upper ground: Android apps and Gmail.

Google announced Google Wallet Instant Buy on Wednesday at its annual I/O conference. Instant Buy, a set of tools for Android developers, is a complement to the Google Wallet API that the company announced last fall. Instant Buy should probably be thought of an evolution of the Wallet API - the older API filled in payment information, while the new version offers a button to "Buy with Google". Instant Buy serves to both authenticate the shopper and actually pay for the purchase, with an intermediary step to confirm. It's a two-click solution the first time a shopper logs in, but then it's down to one if they save their Google login information with the app.

Why is this important? Because buying products via a smartphone can be a brutal experience, requiring dozens of steps to enter payment and shipping information - and users aren't inclined to stick around if they get frustrated. More than 90 percent of mobile users leave a mobile site without buying anything, according to Mike Putnam, vice president of mobile at fashion site RueLala. 

For a merchant, a simple, painless buying experience is a virtual necessity, given the rising numbers of mobile shoppers. Last Cyber Monday, for example, about 11 percent of all purchases were made via smartphone, according to IBM, about 90 percent more than the year before. This year, about 15 percent of all online retail sales will take place via mobile, according to eMarketer. 

But payment buttons aren't exactly new. So how does Googl plan to get an edge? The familiarity and ubiquity of Gmail, for one. Google also added the ability Wednesday to pay by email, clicking a "$" sign to "attach" a few bucks, much like a document or picture. The funds simply go into the recipient's Google Wallet, where they can be redeemed for real money (via a connection with a bank account) or used to buy movies, games and apps from the Play Store.

PayPal and Dwolla, among others, have offered pay-by-email for years. But PayPal and Dwolla don't have one of the most popular email platforms in the world, tacitly encouraging users to send money at the push of a button. That's one of the more important hooks that the new Wallet offers, a Google spokeswoman said. Eventually, it's possible that Google could push Wallet back into the real world - where it first started out, of course. 

What Are The Secrets To Success? Lock-in And Context

In a horse race, a jockey's tools are the whip and blinders. So it is in mobile payments. The most effective way of retaining customers is to eliminate the possibility of going elsewhere. Within the mobile space, the most effective blinder is the app. If you click Amazon's mobile app to buy a router or garden hoe, chances are you're not going anywhere else. Amazon knows that you can shop elsewhere, pay a higher price, and enter your information across all of those dozens of fields - or you can simply stay and buy with one click.

Payments by Amazon, of course, is Amazon's one-click solution, ported to the Web. But check out Payments by Amazon's customer list: the biggest name is probably Ace Hardware. Payments by Amazon offers the same one-click payment that Amazon does, but for the consumer,  without the context of Amazon.com, it's just another provider. And for most merchants, Amazon is the enemy.

Google's hold over the customer is weaker. Within Gmail, users simply don't have the choice to send funds via any other provider, but they can simply use PayPal or Dwolla and send money to the same email address. But what Google offers is what Payments by Amazon can't: context. Within the Play Store, Google is building recommendations for movies, music, and apps, based on your own preferences and what your friends have recommended. 

Payment providers have a number of arrows in their quiver. PayPal offers the ability to pay via its service at retail locations. Dwolla users can pay via Facebook and Twitter. But attendees at Google I/O suspect that the next step is for Google to begin building profiles of real-world purchases, so that if the Gap adopts Google, visitors to its online store will know what their Google+ friends bought. Virtually every other payment provider lacks the social integration that Google includes. 

The idea behind products like Google Wallet—where you could leave your wallet at home and pay for everything by tapping your phone—never really took off. Why? Numerous technical reasons have been suggested—a lack of infrastructure, resistance from financial institutions—but the conversation so far has focused on the problem of paying for things. And paying for things isn't as important as the shopping experience itself, and providing the context for an informed decision that the customer is excited about.

"I’m not saying that there are no advantages to mobile payments," Nick Holland, a former Yankee Group payments analyst, recently wrote. "However, the opportunity for consumer/merchant value addition seems to be less around the transaction and far more around augmenting the retail experience. The mobile payments obsession is missing the point."

And that happy coincidence may well benefit Google.

Photo by Nick Statt for ReadWrite

The Amazon smartphone is a rumor that just will not die. Citing unnamed sources, the Wall Street Journal reports that Amazon is working on building two smartphones — one of which would be a high-end device with 3D visual capabilities where images would appear to float above the screen without the need of 3D glasses. Users could reportedly control the smartphone via eye movements, perhaps similar to the facial-tracking features of the Samsung Galaxy S4. 

[See Also: Where Does Amazon Fit in the Game of Phones?]

An Amazon lab in Cupertino, Calif. (where Apple is also headquartered), is reportedly working on a variety of devices for the e-commerce giant. These could include additions to its Kindle Fire lineup of tablets and Kindle e-readers, set-top boxes for streaming television shows and movies and the long-rumored Amazon smartphones. Various efforts at the lab has names like Project A, Project B and so forth and are supposedly known as the "Alphabet Projects." 

[See Also: What The Kindle Fire Says About Amazon's Whispered Phone]

The WSJ notes that, "some or all of the devices could be shelved because of performance, financial or other concerns." So there is no guarantee we'll see an Amazon smartphone this year, if ever. 

[See Also: Is Amazon Jumping Into The Smartphone Game?]

A bill that would allow states to collect sales tax from Internet companies like Amazon and eBay passed the Senate on Monday by a wide margin of 69-27, in a largely bipartisan push to help level the playing field for brick and mortar stores vis-a-vis their online competitors.

The Marketplace Fairness Act, sponsored by Democratic Senator Richard Durbin of Illinois and Republican Senator Mike Enzi of Wyoming, would, for the first time, force Internet retailers to collect state and local sales tax. (Many states already force some retailers to collect sales taxes, though their rules don't apply equally to all online merchants.) It would also create a streamlined way for those companies to collect sales tax across 9,600 state and local jurisdictions.

Companies like eBay and anti-tax activists like Grover Norquist of Americans for Tax Reform complain that the bill is just too complicated, although both have other reasons for opposing the measure — chief among them being the way it would formally end the Internet's (admittedly somewhat frayed) status as a tax haven.

The bill's detractors claim it will create massive confusion. The bill exempts online retailers who earn less than $1 million in annual out-of-state sales, although retailers like eBay are pushing to raise that cap to $10 million. EBay also complains that the bill's collection mechanism — which would require states to provide companies with software to help them calculate taxes in various jurisdictions — will significantly injure its many retailers and, by extension, eBay itself.

Amazon, by contrast, has thrown its support behind the bill. Since it already collects sales tax in many of the states where it maintains warehouses, the e-commerce giant would benefit if its competitors had to do likewise. The measure would also reduce any competitive disadvantage Amazon might face as it builds out its distribution network in pursuit of same-day delivery to major urban centers.

The bill now moves to the Republican-dominated House for an inevitable battle. But as the New York Times' Jonathan Weisman notes, "...the bill would now go to the House Judiciary Committee, not the tax-writing House Ways and Means Committee. That itself could ease the bill’s passage."

Is an Internet sales tax an idea whose time has come, or just more government overreach? Take our poll above, and let us know your thoughts in comments.

Enterprise IT keeps trying to shove the public cloud genie back into a private cloud bottle, but the majority of developers are having none of that, according to Forrester principal analyst James Staten (@staten7), speaking at the Open Business Conference (OSBC) on Tuesday in San Francisco. Interestingly, these cloud-savvy developers aren't newbie troublemakers just getting started in enterprise IT, but instead skew older and more experienced. Perhaps with Twisted Sister cranking on their Walkmans, this rising breed of middle-aged cloud developer isn't "gonna take it anymore."

Which, of course, is exactly how open source made its way in the enterprise.

Open Source: Not So Young But Very Restless

Back in 2002, Boston Consulting Group surveyed (PDF) the open-source developer community to get a feel for the demographics of the movement. While early open-source development was thought to be marshalled by anarchists and free code-loving hippies, BCG's study revealed that the open-source community was actually comprised of experience IT professionals with an average of 11 years of programming experience.

And while the open source ranks weren't filled with Baby Boomers, they also weren't being pushed by Generation Y. The average age was 30 years old. While not exactly middle aged, it skewed much older than expected.

This shouldn't have been surprising. Often, those who have the most value to contribute are more experienced programmers. In addition, such programmers have also been working in enterprise IT long enough to recognize a better, more efficient way of developing software, and to have the job security needed to take a risk on coloring outside the lines of enterprise IT policies.

Cloud As An Antidote To Corporate Bureaucracy

It's therefore not surprising to see cloud computing also driven by experienced developers, rather than newly minted graduates. According to Forrester's Forrsights Developer Survey, Q1 2013, 71% of cloud developers have at least six years of programming experience, and some 11% have been writing code for over 20 years. These aren't novices trying the cloud because it's "cool."

Indeed, delving deeper into Forrester's data, the primary reason developers turn to the cloud is speed of development:

In other words, as with open source, these developers can't be bothered with corporate bureaucracy. In an earlier Forrester survey, developers said the primary benefit of the cloud is that it's the "Fastest way for me to get my project done and deployed." This calls to mind Redmonk analyst Stephen O'Grady's assertion that "Convenience trumps just about everything" when it comes to cloud adoption.

A Race To Capture Middle-Aged Hearts And Minds

Amazon was the first to spot this market, and is now the preferred  Infrastructure-as-a-Service (IaaS) offering for 71% of developers, according to Forrester, with Microsoft Azure (25%) and Google (23%) playing catch-up. Cloud developers overwhelmingly want IaaS because they want "deep platform access" to things like app servers, web servers, and databases, as Staten noted in his OSBC presentation.

Again, cloud developers are not neophytes. They're serious developers who understand core IT infrastructure but want the freedom to get work done without waiting on corporate procurement or legal policies to catch up.

As such, the IaaS platform that best serves this need will win.

Image courtesy of Jørund F Pedersen, licensed under Creative Commons Attribution-Share Alike 3.0 Unported license.

Over time, great cities tend to inspire their own iconic comedies: New York's Seinfeld. Boston's Cheers. It's Always Sunny in Philadelphia. Now Betas is the show that could put Silicon Valley on the comedy map - but only if you help.

Betas is one of the eight comedy pilots that Amazon has been featuring on its Instant Video page. If enough voters back Betas - or any of the other comedies - then Amazon will greenlight its development into a full-fledged original series, taking on shows like House of Cards and Lilyhammer on Netflix.

Betas = Heart, Surrealism And Desperation

To its credit, Betas integrates much of what made 1980s comedies great - heart, a touch of implausibility that borders on surrealism - and swirls it all together with the desperation and ambition of the Silicon Valley feeding frenzy. For many entrepreneurs, the right handshake seems to be all that separates them from poverty or untold riches, a cruelty that can instantly reduce months of work to ashes. Chasing that dream is frustrating. And funny.

Betas reminds us that Silicon Valley has become high school writ large: geeks may be the new jocks, but the popular kids still have all the money and dweebs are still dweebs. And owning all the toys is still the high score.

Betas begins in the sort of community workspace many techies could imagine working in, if they weren't, you know, working: Employees chase each other around with Nerf guns, others grind Cheetos into their keyboards. "Nash," the neurotic, socially inhibited engineer played by Karan Soni, can't take it. He freaks out and hides in one of the telephone booths the workspace has put against the wall, a quasi-ironic homage to older technology. Nash, despondent, tells his company's founder, Trey (Joe Dinicol), that the latest build of their Highlight-like social discovery app, BRB, bricked the phone.

"Who cares? Investors are making investments from napkin sketches made by high school dropouts!" Trey responds.

"I don't make napkin sketches!" Nash wails. 

The plot of the pilot revolves around a meeting that Trey is convinced BRB needs with George Murchison (Ed Begley, Jr.), who plays electric flute with Moby and slices his own "Ferrari of trout" with an Asian shortsword. Part of the reason is one-upping the team behind "Valet Me," a parking app whose sudden success makes the douche bag developers instant stars. Trey is convinced that the when Murchison hears BRB's pitch, he'll invest - and talks his way into Murchison's home using "Larry Page" as an alias.

The other members of the BRB team include Hobbes (Jonathan C. Daly), a bearded, jaded developer whose idea of relaxing is watching Webcam porn at a local laundromat, and Mitchell (Charlie Saxton) a pudgy dweeb whose biggest goal is to talk to Mikki (Maya Erskine), the cool Asian chick who's looking for just about anything to spark her empty life. "I would never say damp," Mikki muses. "It makes my vaj seem like the Dagobah system." 

Betas Brings Silicon Valley To Life

Betas may be a scripted comedy, but it feels a hell of a lot more real than Randi Zuckerberg's reality TV fiasco, Startups: Silicon Valley that debuted last year. Then, a cast of pretty wannabes partied their way from meetup to meeting to hangout to loft party, leaving everyone in Silicon Valley muttering, "What the hell is this?" Startups' worst crime, however, wasn't that it was vapid; it was just boring, and we'd seen all the tricks that reality series could throw at us before. It's hard to fathom how anyone got beyond an episode or two.

(See also Startups Silicon Valley: The Painful Truth Behind A Caricature Of Excess.)

The Big Bang Theory may hold the crown of TV's geekiest show. But BBT mocks geeky science culture - Star Trek, Iron Man and the ins and outs of academic life - without really touching on what makes a life in technology so great. Betas tosses you in the deep end; it assumes you know what "Series A" funding is, and who Mark Zuckerberg and Page are. Little touches - bumping phones to swap digits, for example - lend the series the "oh yeah, people really do do that" feeling. Silicon Valley will hit the big screen this summer, when The Internship looks inside life at Google - but do you really think a sanctioned look inside the Googleplex is going to end up all that funny?

(See also Geek Movies: The Top 10 Most Inspirational Films For Techies.)

Think Scrubs: Silicon Valley

Think of Betas as Scrubs Silicon Valley: the four members of BRB are starting at the bottom, hoping to climb to the top. In Scrubs, there's a natural progression: the young residents must earn their way up the medical ladder to become full-fledged doctors. What makes Betas so compelling is that Silicon Valley isn't like that. Instead, it's a roller-coaster ride: This week it's a funding deal, next week it's a show-stopping bug. What happens if Trey and the team accidentally leak their user information? What if they're hacked? Do they attract the attention of Anonymous? Does Microsoft make a pitch to buy them? Does IBM?

Look, crazy stuff happens in Silicon Valley every day. But there's no reason why we can't watch it on our TVs at night, too. So watch Betas. Vote for it. Let's make this happen, people.

Most people would agree that Amazon has turned itself into a pretty amazing company. It has turned itself from an e-commerce bookseller into one of the most dynamic companies in the world, providing content for the masses, infrastructure for the Internet and a manufacturer of an array of tablets and e-readers that have helped change the way we read books.

Yet, there is one battle where Amazon has little chance of winning. The battle for App Supremacy.

The Amazon Appstore for Android expanded its global footprint this week, spreading its reach to 200 countries. One might think that Amazon, considering its acumen at selling content like books, movies and music, would be a perfect fit to dominate the app space. But, if Amazon is going to climb to king of App Mountain, it has a long, hard way to go.

(See also Do We Really Need Amazon TV? No, But Amazon Does.)

Appstore Gaining Traction

Amazon's value proposition for its Appstore is pretty clear: if you own a Kindle Fire, you get a curated set of apps that work specifically with your tablet. It is when Amazon tries to extend beyond its own gadgets is where potential is stifled. Amazon Appstore for Android can be downloaded to just about any Android device, but as we have seen with other secondary app stores (Samsung or Verizon), being the second app store is not a recipe for success. 

Despite not being readily available on most Android devices, Appstore continues to gain traction. A new report from app analytics firm Distmo reveals that in the U.S., at least, the "Amazon Appstore is rapidly becoming more and more competitive with Google Play" especially for paid apps.

For raw numbers, Google Play has about 800,000 apps. Apple's' App Store is about the same. The Amazon Appstore? 75,000. Yet, app volume is a bit of an inconsequential argument. Downloads are what matter. In that area, Amazon is not fairing poorly. For example, Distmo found that Google Play is "ten times" bigger than Amazon's Appstore in terms of total app downloads. The graph below shows the large gap in free downloads between Play and Appstore:

In paid downloads, however, Google Play is only twice as big as the Appstore. 

The gap is even narrower when comparing revenues. "The top 200 paid applications in Google Play in the U.S. made $5.2 million in March 2013. This makes Google Play 1.7 times bigger Amazon Appstore."

Amazon is also continuing to expand the Appstore's reach. In 2012, Amazon launched Appstore in the UK, France, Germany, Spain, Italy and Japan. Earlier in April, Amazon announced it was expanding Appstore to 200 countries.  

Does that mean Amazon's Appstore could someday unseat Google Play? Not likely.

Amazon's Reality Check

Apps and developer relations are not a core competency for Amazon. The first year of the Appstore was marred by controversy and setbacks with developers, especially concerning the "free app of the day" promotion that gives the Appstore its biggest value bet for consumers.

Update: Amazon refutes the claim that developer relations are not a core competency. Through Amazon Web Services, the company does have significant developer relations in its corporate blood.  Yet, when it comes to developer relations in regards to the Appstore, that has not always been the case. 

From Amazon communications, Rena Lunak: "Amazon has very deep experience and success with developers via Amazon Web Services, specifically.  In fact, the web scale computing services that Amazon Web Services offers today are based on Amazon’s own back-end technology infrastructure which we’ve spent over a decade building into one of the world’s most reliable, scalable, and cost-efficient web infrastructures.  TinyCo, EA, Halfbrick (makers of Fruit Ninja), Red 5 Studios (makers of FireFall), are just a few well-known app and game developers using AWS to ensure they can scale quickly and cost-effectively to meet customer demand."

Developers are still wary of the Amazon Appstore. Greg Raiz, founder of Raizlabs, an independent app studio in Boston, said that his firm has "experimented with the Amazon store and found minimal traction with apps that are deployed there. 

Consumers don't feel they need an alternate store so they don't actively install it. Amazon did get some consumers to install their store experience by offering a "free app a day" promotion. This had some novelty but hasn't impacted developer mindshare in any significant way.

Only Amazon's Kindle Fire tablet line comes pre-loaded with Appstore. For everyone else, Amazon's Appstore requires users follow the company's "detailed instructions" to determine if their specific Android device can even support Appstore, then to download and install it.

Just as important, mainstream Android apps require additional coding to ensure compatibility with Amazon's forked version of the Android operating system for Kindle Fire, and integration with Amazon's store and payments services. It shouldn't come as surprise that a recent survey of 1,500 app developers by app analytics firm App Annie, found that only 22.5% of respondents were publishing to the Appstore. 

Google's Android Strategy Works

Amazon has done well to create a market for its Kindle Fire tablets and, by extension, its own Appstore. Yet, a limited market share makes for limited potential. At the same time, Amazon faces stiff competition from the likes of Samsung and other Android manufacturers for consumer mindshare. The most used Android tablets are not made by Amazon. They are made by Samsung.

Amazon is a digital content powerhouse, particularly in the U.S. In its official earnings statement this week, the company noted its extensive content creation and distribution prowess - in theory, apps shouldn't be any different - it's all just digital content to be packaged, sold and delivered. But Google's Android strategy - giving away the operating system pre-packaged with Google services like Search, Maps - and Play - gives the search giant a level of scalability and device compatibility that Amazon simply cannot match.

Lead image courtesy App Annie 

Whether we want one or not, Amazon is building a connected TV set top box for us, according to BusinessWeek. The so-called Amazon TV device will stream Internet video to our televisions, presumably with a bias towards the company's own Instant Video selections. It may not be something consumers are clamoring for, but then again, neither was Amazon's Kindle Fire. 

Indeed, Amazon's tablets offer a useful analogy for what we should expect from Amazon TV: an affordable device that mimics  existing offerings with direct connections into Amazons products and services. The idea is to provide just enough value to carve out a respectable slice of the market. In the process, Amazon sets up another entryway into its universe of content and goods. As The Verge smartly put it, it's all about the ecosystem. 

See Also: What The New Kindle Means To Amazon

The Kindle Fire didn't turn out to be the "iPad killer" some predicted, but it appears to be selling fairly well. The class of 7-inch tablets it helped popularize were popular enough to induce Apple to release the iPad Mini. For Amazon, the Kindle Fire isn't a huge money maker, but it plugs millions of people (and their credit cards) into Amazon's storefront. Expect the Amazon TV to do the same. 

Another Streaming TV Box? Really? 

This makes total sense for Amazon as a business, but why do we, the buyers, need another set top box?

Each of the devices on the market has its own benefits, but none of them are a slam dunk. Boxee's buzz has given way to an identity crisis, while Google has yet to apply the proper amount of polish to Google TV. The Roku has tons of content, but Apple TV's AirPlay feature offers even more, letting iPhone and iPad users stream anything from their devices onto the big screen. It's really the Apple TV that Amazon is taking aim at here. And the Apple TV, it's worth noting, has not generated iPad levels of popularity or excitement. 

Maybe that's the point. This could be a preemptive strike on Amazon's part. Whether Apple launches an HDTV set or not, the company is widely expected to make a splash in the Internet TV market sometime this year. By launching something with a TV app store, or at least an AirPlay equivalent, Amazon could beat Apple to the punch. That sounds a lot better than launching an inferior (albeit still good and, crucially, cheaper) competitor after the fact, as Amazon did with the Kindle Fire. 

How Amazon Can Nail This - And Apple 

In that sense, this is a huge opportunity for Amazon. A super-cheap device with a bulletproof user experience (this is TV, after all) that taps into a rich app development ecosystem could blow away the Rokus, Boxees and Apple TVs of the world. For consumers, the goal is to get as much content as possible on the new device, including a Web browser. If Aereo survives, Amazon should have an app for that, right alongside Hulu, Netflix and all the little guys building innovative video apps with awesome user interfaces.

See Also: The Internet Assault On Traditional TV Is Working

Whatever shows it plays, the Amazon TV box has to be absolutely painless to operate. Television has been dead-simple to use for decades, a fact that the makers of many Internet TV products seem to forget. None of these boxes will truly take off TV watchers find them the slightest bit confusing or intimidating.

Don't Mess This Up, Amazon

Here's what we don't want: A half-decent piece of hardware that pushes you toward Amazon's content but doesn't let you stream Hulu Plus or YouTube videos. The things most people want to watch are fractured across these devices as it is. The reason Apple's AirPlay is so promising is that I can get almost everything I want to see on my iPad - and then beam it to my TV. 

You know what doesn't work with AirPlay though? The Amazon Prime iPad app. There's no good reason for that other than the fact that Apple and Amazon are rivals. We consumers shouldn't get caught in the middle of a corporate spitting match and get stuck with a crappier experience as a result (I'm talking to you, Apple Maps). 

It's clear why Amazon is working on a device like this. It makes total sense from the company's perspective. As long as Amazon also takes the consumer's perspective into account ours, this could be huge.  

Compared to the music and news industries, the television business has so far managed to avoid being upended by the disruptive forces of the Internet. That's about to change.

Despite the industry's furious efforts to starve or shut down its online rivals, the Internet is starting to carve out a respectable slice of TV's future. The good news is that while the coming transistion is likely to be rough on many established networks and providers, it's going to be great for consumers and developers. Here's how.

Netflix Bounces Back, Surpasses HBO 

Case in point: Netflix. The video subscription service has bounced back from its 2011 faux pas to not only regain members, but surpass HBO in U.S. subscribers for the first time ever. As Quartz's Zach Seward points out, Netflix now commands more daily attention than any cable channel in the United States. 

See Also: Do We Really Need Amazon TV? No, But Amazon Does

Netflix's dominance over HBO in particular makes for some pretty symbolic future-of-TV discussion fodder. It is, after all, HBO that refuses to offer its programming as a stand alone subscription service, despite growing demand for such a option. It is precisely its old media business relationships and norms that are holding HBO back from letting non-cable subscribers use its HBO Go app, a fact that seems worth recalling at this particular moment in history. It's no wonder that the company's CEO is publicly rethinking that strategy and admitting to reporters that cable-free access to HBO Go may be an inevitability.

It's also interesting to note, as Seward does, that HBO started out much like Netflix did, by first making out-of-theater movies available to subscribers, and then moving into original programming. 

The Internet Masters What Matters: Programming

For the last few years, it was the hardware, distribution and overall experience of watching TV that started to change at the hands of the Internet and mobile tech. Now, crucially, we're getting down to what matters most: the stuff that actually draws viewers. 

The trend toward original, Internet-only, TV-style programming is something we tech blogs have watched and opined about for the better part of a year. In the first half of 2013, the theoretical promise of original Internet TV has morphed into a confirmation that it is, in fact, something normal, non-techie people care about.

Netflix's Lilyhammer may not have changed the landscape, but it was an important precursor to House of Cards, which appears to be doing exactly that. Meanwhile, Hulu, Amazon and YouTube continue to make their own investments in original programming to compete with cable and network TV. 

The success of House of Cards has led to a great deal of discussion about the rise of data-driven TV programming and what it means for TV's future. Unlike the people who have traditionally made TV programming decisions, Netflix is sitting on a mountain of data about its users. That includes 30 million plays and 4 million ratings per day, in addition to details about when people watch, from which devices, which parts they rewind and more.

By looking at this trove of data, Netflix was able to place a pretty safe bet on the notion that a remake of this particular BBC show starring Kevin Spacey and directed by David Fincher would do well. 

Netflix isn't the only company tapping its users to help with video programming decisions. This weekend, Amazon asked viewers to rate the pilot episodes of 14 different Web series, which apparently resulted in quite a few views for the original programs. The company hasn't launched a stand-alone Netflix competitor, but Amazon Prime appears poised to evolve into such an offering. There's even an Amazon TV set top box rumor, hot off of the presses.

Aereo: Please Excuse This Interruption

Next month, people living in and around Boston will be able to join New York's early adopters in subscribing to Aereo, an innovative and controversial Internet TV service. Since its launch, Aereo has under assault by much of the TV industry, which claims its antenna-renting and re-broadcasting model of mobile and Web TV amounts to copyright infringement. That may or may not be true, but it's certainly threatening their business model, which is why they wasted no time in trying to sue Aereo out of existence. 

So far, Aereo has prevailed. That is, early court rulings have sided with the startup's claims of fair use and thus declined to shut it down before the lawsuit goes to trial, which will undoubtedly be an interesting affair to follow. 

If Aereo survives this litigious onslaught, it's poised to be one of the most disruptive forces the industry has seen in awhile. And while that would be bad news for network executives, it's actually pretty great for consumers, who will be able to tune into broadcast TV online without dealing with rabbit ears or a cable provider. It would also be a huge win for the Internet in the battle for TV's future.

The Original Web Programming Revolution Continues

The next big test for Internet-only TV will be the return of cult classic Arrested Development, a new season of which will land on Netflix next month, eight years after Fox dropped the original. If the show's enduring popularity and House of Cards' recent success are any indication, May will be a good month for Netflix. 

We won't actually know how well Arrested Development does, though. That's because like House of Cards and everything else on Netflix, it isn't tracked by the same TV ratings system that has measured TV viewership in the U.S. for six decades. The only numbers we get from Netflix are the ones it chooses to share. The company isn't typically generous with that data, which is somewhat ironic considering how much its users willingly hand over.

That all might be about to change, as Nielsen gets ready to update its TV audience measuring methodology to include Internet sources. It's not clear whether the long-overdue update will track views on Netflix when it gets rolled out this fall, but the normalization of TV measurement should help paint a clearer picture of what's getting watched, regardless of the distribution channel. 

If nothing else, the Nielsen update further illustrates the extent to which TV is changing in the age of streaming services and mobile devices. 

Legacy enterprise IT vendors may be scrambling to spread the blame in the wake of earnings misses, but one mega-vendor is not, and it's the one open-source advocates have argued for years was doomed to imminent oblivion: Microsoft. For all its stumbles in mobile and online, Microsoft continues to soar in core enterprise infrastructure sales.

The reason? Microsoft pressures the Oracles and HPs of the world in much the same ways that open source and cloud do.

Low Cost, High Value

By most measures, Microsoft's Server and Tools business is booming:

• Product revenue up 11% (Multi-year licensing revenue up 20%)
• Enterprise Services revenue up 11%
• System Center revenue grew 22%
• SQL Server revenue grew 16%, outpacing the market

And while growth has slowed a bit in fiscal year 2013 compared to fiscal year 2012, it's still impressive growth, especially in light of the struggles other enterprise IT vendors have had recently.

Why is Microsoft different? Most obviously, because Microsoft tends to make complex infrastructure affordable and easy to use, while appealing to developers. This has long been Microsoft's recipe for success: lowering the bar to use complex software while also lowering costs.

In other words, Microsoft keeps chugging along in the enterprise because makes life easier for enterprise IT, similar to what cloud and open source do. Or as Apprenda vice president Rakesh Malhotra puts it, "it's less about licensing and more about the complexity/cost/value."

And while Microsoft persists with its proprietary license model, a model out-of-favor in a market trending toward open source and cloud, it still tends to be much cheaper than alternatives like Oracle in the database market. As BMO Capital Markets analyst  Karl Keirstead recently opined in a client note, "Countless customers have told us that the cost advantage of SQL Server is so compelling that their deployment of Microsoft SQL Server databases is ramping."

In short, Microsoft improves enterprise value and lower costs, relative to the other legacy IT vendors.

But What About Mobile?

Ironically, Microsoft has thus far failed in mobile precisely because it has taken the opposite strategy: while Apple and Google (Android) have essentially lowered the cost of mobile operating system licenses to $0.00, Microsoft has continued to try to impose license fees. When that hasn't worked, it has sued Android licensees to try to raise costs to match Microsoft's.

It hasn't worked.

Microsoft has a lot of work to do to catch up in mobile. But in core enterprise infrastructure? Microsoft may be the vendor to beat. 

Not Shrinking From The Cloud Fight

Not that Microsoft rests easily. After all, with trends shifting IT spending to mobile and cloud, Microsoft's traditional Server and Tools division stands to take a beating. According to a new Baird Equity Research Technology study, Amazon, in particular, is siphoning off dollars from the legacy IT pie:

We estimate that for every dollar spent on [Amazon Web Services], there is at least $3 to $4 not spent on traditional IT, and this ratio will likely expand further. In other words, AWS reaching $10 billion in revenues by 2016 translates into at least $30 to $40 billion lost from the traditional IT market. 

In this, however, Microsoft is playing a solid offense, and stands a good chance of succeeding. Among both enterprise developers and CIOs, Microsoft remains their go-to vendor, according to both Piper Jaffray and Evans Data surveys. More pertinently to Amazon, these same enterprises plan to expand their Microsoft Azure adoption significantly, according to Forrester:

Breathing Room...For Now

Amazon stands clear as the 800-pound cloud gorilla, but Microsoft is no slouch. By embracing the cloud early and by continuing to pressure its proprietary peers with low-cost, high-value infrastructure software like SQL Server, Microsoft has kept itself top of mind with CIOs. These same CIOs are therefore willing to give Microsoft breathing room as it transitions its business to the cloud.

This could get interesting.

The infrastructure rich keep getting richer, and that's just fine, according to Amazon CTO Werner Vogel. As he declared at AWS Summit NYC last week, "infrastructure... is not a differentiator" for the enterprises and startups that keep buying servers to fill their own data centers. Given that Amazon has better scale and operational efficiency, Vogel's argument goes, there's no reason to continue trying to reinvent a wheel better built and operated by Amazon.

Self-serving? Sure. But true? Very likely, yes.

Amazon To Enterprise IT: Fall In Line

As much as enterprise IT may like to pat itself on the back for operational excellence, and naysayers like to point to Amazon Web Services' occasional outages, the reality is that AWS uptime is at least as good as that of enterprise IT, and arguably better. Even more pertinently, regardless of enterprise IT's claims, whether valid or not, developers and others are going to consider using public clouds like AWS. It's too convenient for them to ignore.

As Vogels argues:

"You have to stop wasting time and effort for things that do not matter for your customer. One of those things is your infrastructure. It is not a differentiator... [Our quest for efficiencies] helps you with economies of scale and drives our costs down. We've made the decision to pass those benefits back to you [in reduced costs]... If we are able to drive the cost of this compute and storage down to a point where you no longer have to think about it, tremendous products are going to be built. You will no longer be constrained by your infrastructure."

It's a compelling vision. But is it correct for all companies, all of the time?

The Infrastructure Rich Get Richer

Google doesn't seem to think so. As GigaOm's Derrick Harris points out, Google spent $1.2 billion on infrastructure in the last quarter, which represents a 20% jump over its infrastructure spend ($1.02 billion) in the previous quarter. Google clearly feels that infrastructure helps to differentiate it.

Or ask Microsoft, which has spent $15 billion on its data centers.

The same holds true for Zynga, which used to run 80% of its business on AWS but announced in 2011 that it would be moving to its own private cloud for most of its operations. By 2012 80% of its game activity was running on its private zCloud, with only 20% still hosted on AWS.

While there are some companies - Netflix stands out among them - that continue to run on AWS at large scale, it seems that many enterprises feel that infrastructure does matter. At least, at a certain scale.

However, my guess is that most of these don't truly appreciate why their infrastructure matters. While Zynga argued it could save money by going to a private cloud given its scale, the real value of running one's own data center isn't a cost advantage. It's a competitive advantage, but only when infrastructure is considered a profit center, not a cost center.

Making Data An Essential Aspect Of One's Business

Tim O'Reilly honed in on this point back in 2010, arguing that back-end infrastructure becomes critical to controlling front-end user experiences:

"We are once again approaching the point at which the Faustian bargain will be made: simply use our facilities, and the complexity will go away... We’re entering a modern version of 'the Great Game,' the rivalry to control the narrow passes to the promised future of computing... This rivalry is seen most acutely in mobile applications that rely on internet services as back-ends."

We're already see data, and its underlying data centers, become an advantage for Google, Facebook and other new-breed tech companies, while the legacy tech vendors have become a "rust belt" of sorts, to use The Wall Street Journal's phrase. But data isn't merely an advantage for so-called tech companies. 

Data powers the rise of more effective trading strategies for Financial Services firms. It enables better patient care in Healthcare. It wrings efficiencies from supply chains in Retail. Indeed, data is finally taking shape as the driving force for business in the Twenty-first Century.

So Do You Need A Data Center?

Which brings us back to Amazon. Most enterprises - even large ones - aren't running at a scale where their data-driven applications can't be managed in the cloud, be it Amazon's, Google's, Rackspace's or someone else's. Indeed, I suspect that many, if not most, applications currently running behind an enterprise firewall could conceivably be run in the public cloud.

But as we've seen with Zynga, at a certain size many companies are going to see advantages to running their own infrastructure. Not to lower costs, though they may well find that they can operate their data centers more efficiently than Amazon. But, rather, to increase control of how the manage their data centers to capture, manage, process and put to use data.

Yes, even stodgy old insurance, manufacturing and other "old world" companies. Facebook, after all, is a social media company. Google is a search and advertising company. Zynga helps people play games. And Amazon? It sells books. And yet each of these non-tech tech companies feels that infrastructure is critical. At least, at scale.

Image courtesy of Shutterstock.

As much as we don't like markets being dominated by a single vendor, it's almost as bad to try to choose between a chaotic mix of vendors. That's the current state of the cloud market, and it's giving some prospective buyers fits. For public cloud, Amazon is the early leader, but within the enterprise...? It's not so clear.

The major cloud vendors admit as much. In a recent Quora thread, executives from Eucalyptus, VMware and more debate who leads the Infrastructure-as-a-Service (IaaS) cloud market. Answer? 

It depends.

AWS vs. VMware vs. OpenStack?

Eucalyptus CEO Marten Mickos starts it off, answering the question of "In the IaaS cloud market, who will win between AWS, VMware and OpenStack?" with:

All three camps have their respective strengths. VMware is the undisputed leader in virtualization and more broadly in on-premise infrastructure software. So far they have little to show when it comes to public clouds. OpenStack has huge popularity and the backing of legacy IT vendors. They are fighting the public cloud and the private cloud battle at the same time. Amazon Web Services are overwhelming leaders in public cloud, an industry that is growing fast. AWS hasn’t done much with large enterprises or on-premise environments. They do have Virtual Private Cloud (VPC), Direct Connect (DC), and the partnership with Eucalyptus.

But it's not as if these vendors are operating in a vacuum. As VMware cloud executive Matthew Lodge notes, both AWS and VMware bring existing fan bases (he calls them "power bases") to the cloud party. VMware has an enviable foothold with enterprise IT and AWS owns developers. OpenStack, as Lodge points out, has "undoubted enthusiasm around the project from vendors and early users" but "no strong power base" and still lacks many public clouds built on its technology, and has been particularly slow to gain traction in Europe. 

Cloud Apples vs. Cloud Oranges

Which, of course, is a reminder that at times we're comparing cloud apples and cloud oranges here.

IaaS architect Jason Heiss hones in on this, posing a mock rhetorical question - "In the housing market, who will win between Century 21, Home Depot and a lumber mill?" - and then stressing that each of these cloud providers is "selling different things to different people," concluding "They'll likely all 'win,' in the sense that cloud adoption is still nascent in many companies."

I'm not sure that I agree that all will win, even in Heiss' sense. While the cloud a growing market with lots of room for "winners," enterprises are going to settle on a few vendors, not many. VMware has the "power base" with enterprises, and AWS has the same with developers. Eucalyptus ties the enterprise into the power of AWS through its API, and OpenStack has a great deal of momentum from vendors who want it to succeed against incumbent power bases.

In other words, this game is nowhere near over, and it may be too soon to pick a winner.

Can Any One Vendor Win The Cloud?

And even when we do pick a winner, are we picking a winner in enterprise cloud deployments, public cloud deployments, hybrid cloud deployments, deployments of public clouds built on one's cloud technology, or something else altogether? Defining the market matters, and at present it's not clear that there's any useful way to describe the overall "cloud market" as a coherent thing that any one vendor could possibly win.

So when you read that OpenStack has upended the private cloud market, or read a blow-by-blow account of who's winning between CloudStack or OpenStack, a healthy dose of skepticism may be in order. Not of the analyses, which are often quite good, but rather of the very idea that any particular vendor could win this amorphous market we call "cloud."

Image courtesy of Shutterstock.

Microsoft may be a distant runner-up to iOS and Android in the smartphone race, and still lags Amazon EC2 in the cloud wars, but executives from the Windows Phone and Azure divisions aren't hurting for respect. In the past week, senior Microsoft executives have joined disruptive challengers in the mobile and cloud markets, suggesting that Microsoft's brainpower isn't lacking, even if its market share is.

The first executive departure was Charlie Kindel, the former Microsoft executive who managed developer outreach for Windows Phone, who actually left Microsoft nearly two years ago but just now found his way to Amazon. While it's still anyone's guess as to what Kindel will be doing at Amazon - given his past role with Windows Phone, some are mooting the possibility that he will be helping build out an Amazon phone - this is becoming a bit of a habit for Windows Phone executives to leave for Amazon.

After all, just last year Brandon Watson, also from the Windows Phone developer outreach team, left for Amazon. In his case, Watson joined Amazon to help on the Kindle cross-platform team.

Nor is it just the Windows Phone team that has been leaking.

Today Red Hat announced that it had snagged Radhesh Balakrishnan, Microsoft's Azure chief for Asia-Pacific, to run its virtualization efforts, including OpenShift, Red Hat's open-source PaaS offering. If Red Hat were to borrow from any competitor to steal a march on VMware in the virtualization market, or Amazon in the cloud market, Microsoft was a great place to look.

After all, Microsoft has been cutting into VMware's virtualization market share for years, and Azure has become a solid #2 to Amazon, as a recent Forrester survey indicates:

One way to look at this is that Microsoft is hemorrhaging talent and must be a sinking ship. But I think this would be an incorrect reading. After all, though Microsoft is late to both the cloud and mobile parties, it's making progress in both, and continues to own the affections of CIOs. 

No, I think the better interpretation is that for all Microsoft's execution issues, it continues to have a bevy of super-smart employees. Amazon and Red Hat certainly seem to think so. 

And for every Microsoft executive that leaves, there are many more who are choosing to stay. If anything, these departures say little about Microsoft's fortunes and instead simply indicate that Amazon and Red Hat may offer exciting options of their own. While it's tempting to assume that executive departures are a clear sign of a company's struggles, reading the tea leaves in this way would put Apple, Facebook and Google, among others, in serious jeopardy.

Most people would love to have that kind of "jeopardy."

Image courtesy of Shutterstock.

It's been five months since Timothy Ferriss launched his bold experiment in modern publishing. The best-selling author bypassed the "big six" publishers, signed with Amazon and, as if that weren't unconventional enough, partnered with BitTorrent to help promote his new book, The 4-Hour Chef. 

The whole thing seemed almost designed to generate press, which it did. But now for the important part: Did the experiment work?

It sure looks that way. Despite being boycotted by Barnes and Noble and other bricks and mortar retailers, Ferriss's book has sold over 250,000 copies and landed on all the major bestseller lists. 

Of course, Ferriss is a well-known and established author, which helps. So does signing with Amazon, which is powerful enough to send the U.S.'s biggest brick-and-mortar book retailer into a book-banning fury. 

But as mighty as Amazon is, being banned from big-box retailers is a serious handicap. To compensate, Ferriss had to forge some unexpected partnerships, such as with smaller retailers and Panera Bread, the sandwich shop chain. He also teamed up with BitTorrent, through which he published a 680-megabyte bundle of bonus content, including behind-the-scenes videos, a sample chapter and author notes. 

Can BitTorrent Actually Drive Sales? 

"To be honest, I was initially skeptical about how many sales would result from BitTorrent," says Ferriss.  "After all, that's where people go to get stuff for free, right?"

Indeed, most people associate the P2P filesharing protocol with pirating movies, music, software and yes, books. BitTorrent, Inc has been busy trying to shed that reputation, in part by partnering with well-known content creators like Ferriss, even if they're somewhat nervous about the idea. 

"It turns out that I couldn't have been more wrong," he says. "The click-through rates from BitTorrent to Amazon were higher than anything I've ever seen through paid advertising.  Orders of magnitude higher."

More than 880,000 people have clicked through to The 4-Hour Chef's Amazon landing page. Amazon doesn't offer its authors conversion metrics, so it's hard to say how many of those people actually purchased the book. But it's an impressive amount of exposure. BitTorrent also sent nearly 300,000 people to the book's video trailer on YouTube and over 327,000 to Ferriss' website. Not bad. 

The Piracy Question 

But there's an elephant in the room: piracy. Just as easily as they can grab Ferriss' 4-Hour Chef promotional bundle on BitTorrent, users can find pirated copies of all three of his books. 

"If someone is willing to spend time finding a legit bootleg source and reading a DRM-broken hard-to-read copy of my book on a computer screen not intended for reading, just to avoid spending $12 or so, they weren't ever my core audience to begin with," Ferriss says. "If I get them, it's nothing but bonus points."

So, the Amazon/BitTorrent publishing hack seems to be working, for Ferriss at least. There are lessons to be learned here, but with the usual dose of caution. In the same way that Radiohead didn't single-handedly make "pay what you want" a viable model for all musicians, Ferriss's example is going to be of limited value to new authors. 

Still, it demonstrates the potential of today's platforms and protocols when it comes to one-upping long-entrenched players and leveling the playing field a bit. We all can't be Tim Ferriss, just like we all can't be Justin Timberlake. But just as the Internet has opened a new potential path to success for YouTube pop singers, platforms like Amazon and BitTorrent could be where tomorrow's authors find their audiences. 

Last week, Amazon bought the social book-discussion site Goodreads for an undisclosed sum. My immediate Twitter reaction was, well, cynical:

Basically, all of your book related social activity on Goodreads just became advertising fodder for Amazon. Congrats and good luck!

— Brian Ford (@brianericford) March 28, 2013

My second tweet was still snarky, but more on the money:

"Our goal is to be an open place for all readers to discover and buy books from all retailers..." - Goodreads 2012 paidcontent.org/2012/01/27/419…

— Brian Ford (@brianericford) March 28, 2013

Basically, those two tweets — about which more in a moment — are the two best reasons to think the Goodreads acquisition will be bad for the company and bad for readers... but very, very good for Amazon.

Your Diversity Will Be Assimilated Into Our Own

First and foremost, one has to question whether Goodreads' commitment "to be an open place for all readers to discover and buy books from all retailers, both online and offline" remains in place.

I contacted Goodreads, and Suzanne Skyvara, its global consumer communications executive, offered encouraging words: "Re: the links to other retailers, we have no immediate plans to change the Goodreads experience."

Let's be real, though. No one in Goodreads' position has ever responded to buyout concerns with "we totally expect [buyer] to subvert our pre-buyout goals" and it's simply not in Amazon's best interests (or DNA) to promote the content of other booksellers.

Jeff Bezos has been very open in saying that Amazon will make its money on content. Goodreads provides Big Book nothing if not a resource to promote and sell content.

To be clear, I'm not being critical of or calling anyone at Goodreads a sellout. When I was running Lendle, a Kindle lending startup I co-founded, it was always our goal to run a fair lending site on our own terms. If Amazon had offered us enough money we'd have sold in a heartbeat, even with the expectation that our terms would no longer be a priority for Amazon. In a lot of ways, Lendle as an Amazon property would have been a much better service.

With that said, we were an Amazon-only company by design and our goals never involved or promised support for multiple ecosystems. Unlike Goodreads, which links to many online retailers.

Once You Got 'Em By The Books, Their Hearts And Minds Will Follow

And that brings us to that second tweet. That was a Goodreads "company" quote from early 2012 explaining its decision to move away from Amazon's API — the software interface that lets sites like Goodread access Amazon's enormous book database — in favor of one over which it would have more control. Or, more to the point, one that couldn't be yanked away from it at a moment's notice, effectively on a whim.

At the time, I was still a co-owner of Lendle, which was also built on Amazon's API. We understood all too well the perils of relying on the dataset of a large corporation because, at one point, Amazon abruptly turned off the tap and with it, our entire lending service. 

Eventually we addressed the issue, our API access was restored, and lending resumed. Still, the damage was done. Every decision we made (or did not make) from that point forward was based around our lingering fear that Amazon could shut us down at any time, for basically any reason.

In the end, we sold Lendle to a 3rd party because we couldn't comfortably do anything we really wanted to do with it. Amazon's restrictions sucked the fun out of running our startup.

To say that we admired Goodreads' decision to go it alone would be an understatement. They were making a decision we weren't able to make, because they had the numbers to make it work and that meant they'd be able to take risks we simply couldn't take.

More from paidContent in 2012 about Goodreads and the Amazon API:

Goodreads’ situation illustrates the risks of building a site around any retailer’s API, since that retailer can change its terms at any time. Amazon’s Product Advertising API license agreement has not changed since April 2011 but “the terms now required by Amazon have become so restrictive that it makes better business sense to work with other data sources,” the company told me.

Specifically, Goodreads found two requirements of Amazon’s API licensing agreement too restrictive. Amazon requires sites that use its API to link back to the Amazon site exclusively. So a book page on Goodreads would have to link only to its product page on Amazon, and not to any other source or retailer. Amazon also does not allow any content from its API to be used on mobile sites and apps.

Going it alone was risky. Amazon's API gives sites access to a vast library of book covers, titles, authors, and even reviews. It's easy to see why sites put up with a restrictive environment to take advantage of that access. Walk away and you're suddenly facing broken links where book covers once existed, and that's just the start.

Goodreads, though, had built up a vast network of book lovers and was capable of weathering a temporarily weakened core to build something far more valuable: An in-house dataset subject to none of Amazon's restrictions. The numbers, according to Amazon's press release announcing the acquisition:

Founded in 2007, Goodreads now has more than 16 million members and there are more than 30,000 books clubs on the Goodreads site. Over just the past 90 days, Goodreads members have added more than four books per second to the “want to read” shelves on Goodreads.

Now consider Goodreads' existing developer API. As of last week, all of the data Goodreads had amassed since moving away from Amazon was available to developers via a public API. This meant you or I or anyone else could use that information in interesting ways, subject to Goodreads' terms which, presumably, were far more open than Amazon's:

The Goodreads API allows developers access to Goodreads data in order to help websites or applications that deal with books be more personalized, social, and engaging. The API can be used in many ways, including...

In short, an API attached to a relevant dataset is power. Prior to the switch, the power belonged to Amazon. After the switch, it belonged to Goodreads.

If You Can't Control 'Em, Buy 'Em

From that perspective, moving away from Amazon may have been the best way to ensure a buyout by Amazon. (What's that old saying? "If you love someone, set their API free?")

When I contacted Goodreads, I also inquired about the future of its API, and Skyvara offered no specifics: "We don't have more information to share at this stage."

I've been reading the tea leaves, and the days of Goodreads offering a powerful API that allows developers to "personalize an ecommerce store, power recommendations, show a widget of a member's favorite books, build a mobile or desktop client app, and more" are probably numbered.

In short: All that data was readily available and if Amazon does what Amazon tends to do, it won't be long before it simply doesn't exist.

Cogs In The Amazon Machine

Changes aside, millions of Goodreads members are about to become advertising fodder for Amazon. It's one thing to promote books on a site that doesn't sell them or even care where you buy them -- it may be another to do so for the largest bookseller in the world.

The most depressing aspect of all this is that Amazon probably doesn't care one way or the other. With Goodreads and its data swallowed up, where would you go, anyway?

There aren't many popular social sites for books that aren't in some way or to some extent under Amazon's thumb: Shelfari, Goodreads, AbeBooks, and LibraryThing are all owned or partially owned by Amazon. Amazon's brilliance is in allowing these purchased sites to run quasi-independently: The illusion of competition is there, but it's just that and, ultimately, all roads lead back to Amazon.

In the coming weeks, expect Goodreads to say all the right things, but pay close attention. Read between the lines, and lets revisit their post-buyout honeymoon optimism in a year or so.

Lead image via paul prescott / Shutterstock.com

Could Amazon be going social? The online retailer announced today that it has reached an agreement to acquire Goodreads, which bills itself as the world's largest online community for book recommendations. Terms of the deal weren't disclosed.

According to the official statement:

Goodreads has helped change how we discover and discuss books and, with Kindle, Amazon has helped expand reading around the world. In addition, both Amazon and Goodreads have helped thousands of authors reach a wider audience and make a better living at their craft. Together we intend to build many new ways to delight readers and authors alike.

Goodreads was founded in 2007 and claims 16 million members, 30,000 book clubs and over 23 million book reviews. The site is free to join. Members can join multiple book clubs, list the books they are currently reading, provide detailed recommendations on books, and share their reading lists and preferences with others on the site. Goodreads also has its own recommendation engine which it claims "analyzes 20 billion data points" to provide book recommendations to members.

What The Deal Might Portend

As a result of the acquisition, of course, Amazon will have even more intimate access to Goodreads' avid readers, who in turn could serve as a receptive audience should Amazon want to offer book-discount deals or to hook more readers on its Kindle eReader line. Amazon's reach could also help expand the Goodreads community, assuming it retains its current form.

Perhaps more interesting is the possibility that Amazon might use Goodreads as a core from which to build out its own new social community. The online retailer's social presence to date is mostly limited to its voluminous customer reviews and ephemera such as users' personal — and often idiosyncratic — themed "lists" of books, movies, music or other products.

Goodreads, by contrast, allows its users to connect directly with each other a la Facebook or LinkedIn. Readers can join book-discussion groups and share recommendations, reviews, books they've read and enjoyed -- or hated -- and their "want to read" lists. Authors, meanwhile, can interact directly with readers, often via setting up the online equivalent of a book signing.

On a strictly commercial basis, Amazon will get access to the Goodreads recommendation engine, presumably with an eye toward upgrading — or even replacing — its own. The acquisition will also most likely supply Amazon with lots of new reader data to study for trends and sales opportunities.

Goodreads also offers authors a number of free tools to promote their own works and interact directly with readers, which could supplement Amazon's own self-publishing and e-book efforts. 

What Might Change As A Result Of The Deal

Right now, the Goodreads site makes it relatively easy for users to download or purchase books from Amazon, Barnes & Noble and other sites. It's sort of hard to imagine that Amazon will continue to allow links to non-Amazon stores going forward. Likewise, it's entirely possible that Amazon might begin, let's say, encouraging Goodreads members to sign in using Amazon IDs.

Similarly, it remains unclear whether Amazon will leave the Goodreads site itself largely untouched, or whether Amazon plans over time to assimilate -- OK, "integrate" -- it more closely with its main e-commerce site. We do know that Goodreads will continue to maintain its headquarters in San Francisco, which suggests that -- as with Amazon's Zappos acquisition -- the retailer intends to keep Goodreads as an independent entity. 

Goodreads CEO and co-founder Otis Chandler announced the acquisition on the site:

When Elizabeth and I started Goodreads from my living room seven years ago, we set out to create a better way for people to find and share books they love. It's been a wild ride seeing how the company has grown and watching as more than 16 million readers from across the globe have joined Goodreads and connected over a passion for books. 

Mr. Chandler also stated that he wanted to "bring the Goodreads experience" to the Kindle, though he provided no additional details as to how that might work. Goodreads and its community features are already available on iPhone, iPad and Android, as well as the Web.

The deal is expected to close in the second quarter of 2013.

Image screencapped from an Amazon Kindle commercial

The time to cut the cord on cable television has never been better. Between Netflix and Hulu Plus, consumers are treated to a variety of original programming financed and produced not by mega studios but by digital content companies that have little interest of seeding their content to cable channels. Netflix’s House of Cards has been a critical success and Hulu has some sleeper hits like Battleground.

With the investment in original content from its top competitors, Amazon will not be left behind.

Amazon today announced that it is picking up the pilot to Zombieland, a television series adaption from the movie staring Woody Harrelson, Emma Stone and Jesse Eisenberg. The move to pick up Zombieland is part of a larger original content play from Amazon as the company has promised to produce 13 series from a variety of pilots. Amazon is specifically focusing on comedy and children’s programming for its original content.

Zombieland and other pilots from Amazon will be featured on its Prime Instant Video streaming service. Amazon will pick the 13 series from its array of pilots based on user feedback.

The Zombieland series will be produced by the movie’s original creative team including writers Rhett Reese and Paul Wernick. The roles occupied by the likes of Harrelson and Stone have been recast to Kirk Ward and Maiara Walsh, respectively.

Zombies are all the rage right now. The Walking Dead is killing it on cable. The adaptation of Max Brook’s novel World War Z is coming to the big screen in June with Brad Pitt.

Content Marketing At Its Best

People started scratching their heads a few years ago when companies like Netflix and Hulu started bidding on original series from prominent production companies. Why would Netflix spend millions of dollars to obtain House of Cards? Or make one final season of Arrested Development? This was not the business model we had come to expect from these companies. Netflix traditionally licensed content from the archives of major studios for its streaming service, not created its own. 

As the original programming has come to the screen, the play has made a lot more sense. House of Cards has a lot of people talking and the only way to see it is to have a Netflix streaming account. Users will have to get a Amazon Prime account to see the likes of Zombieland. 

Essentially, these original programs are giant marketing ploys. When it comes down to it, the point of marketing is to get people talking about your product. When people talk about your product, there is a chance they will actually spend money to use it. House of Cards certainly has people talking. If Zombieland the series is as good as Zombieland the movie, Amazon could see an uptick in Prime customers.

HBO has been doing this for years, from Oz to the Sopranos to Game Of Thrones. The difference now is that you do not need a cable subscription to get great exclusive programming.

Great For Cord Cutters

For consumers, the original content wars are the best thing to happen to television since the cable wars erupted in the 1980s. For the first time, television watchers are able to get true a la carte viewing options, choosing from here or there for what they want to watch as opposed to choosing various “bundles” of channels from the cable companies. 

Consumers that want to rid themselves of the monthly cable bill will have plenty of content to choose from and not just the shows that aired years before. In the end, everybody wins (except for, maybe, the cable companies). 

Lead image courtesy Shutterstock.

For an industry that has such a hard time making money, digital music sure is hot right now. Everybody wants in. Amazon is now the latest tech giant rumored to be eyeing a slice of this increasingly tempting pie, according to a report on The Verge. But why? 

News that Amazon is in negotiations with music labels comes mere weeks after Google was revealed to be having similar discussions of its own. The search giant already has a huge presence in digital music thanks to YouTube, but seeks to solidify its role by launching a Spotify-style subscription service on top of its existing music products.  Like Google, Amazon already has content relationships and infrastructure in place that will simplify the process of entering what is typically a very challenging and cost-prohibitive marketplace.

It will still be an expensive endeavor, given the high cost of licensing music from the major labels, but companies like Google and Amazon are well-positioned to negotiate those dollar figures down and, if necessary, operate at a loss without discernibly denting their bottom line. 

Fine-tuning the financial details is what these negotiations are all about. And it's important to note that they are just that: negotiations. They could wind up hitting a roadblock, as has allegedly happened with Apple in its rumored quest to launch a Pandora competitor. However it pans out, it's now known that Google and Amazon are at least attempting to enter the streaming music space. If all goes according to both companies' plans, they'll soon be in direct competition for digital music subscribers.  

Google vs. Amazon: From Frenemies To Rivals

The rivalry between Google and Amazon is expected to heat up this year, and this would just be the latest source of competition between the two companies.  While they started as two very different, seemingly unrelated businesses, the companies have both evolved into new territories, occasionally bumping into each other in the process. Today, both companies sell digital content like ebooks and music, as well as the hardware required to read and view that content. Like Google's arch nemesis Apple, Amazon is now rumored to be building its own mapping service as well. 

Digital music is not an easy business to be in. Six million people are now paying for Spotify,  with 18 million more listening for free on the desktop. That's stellar growth in just under two years and an impressive conversion rate for any freemium business. Still, Spotify isn't touting massive profits, and nor are any of its competitors.

That's because they're all paying a massive chunk of their revenues to rights holders (record labels, mostly) and struggling to find ways to drive those costs down. Pandora's legislative efforts haven't met with much success on that front.

Why Streaming Music? 

A company like Amazon might be able to use its might to negotiate better licensing deals. Even if it fails to do so, running an unprofitable streaming service (or bundling music with Prime) could rope enough additional people into Amazon's ecosystem to make the effort worthwhile. 

Or, if nothing else, it could prevent Google from getting a leg up on Amazon in the broader digital music space, in which both companies are already present. In an excellent post, The Verge's Tim Carmody points out that "few of these larger tech companies embracing streaming music seem to be doing so as an affirmative strategy, because they ultimately believe streaming music will help sell their other devices or services. Instead, they're primarily worried that if they don't offer a streaming music service, they'll be seen as deficient in some way."

It's also worth keeping in mind the mobile aspect. Google's stake in mobile is obvious, and Amazon's is expected to get even more serious if, as expected, the company eventually unveils a smartphone of its own.  As Wired's Mat Honan wisely points out:

Subscription and streaming only took off once 3G made it possible for you to carry your music with you everywhere. Pandora, Spotify, and Rdio have proved there’s an attractive market. But imagine what happens when a streaming-music app ships with your phone, with every phone, and all you have to do is turn it on, using an account you’ve already set up for billing. Or even worse (if you are an existing streaming-music provider) if it’s a free, advertising-supported service.

All this action in the streaming music space leaves little doubt that this model will be a crucial component of how we consume music in the future. It's the "music like water" model that music futurists once dreamed about. Exactly how it takes shape will depend on economic questions: how the business model evolves, how artists get paid, which companies will dominate distribution.

This year was already poised to be an interesting one in digital music with the impending U.S. launch of Deezer, the arrival of Daisy and ongoing rumors about Apple's plans to build a Pandora competitor. Now Google and Amazon are also both gunning for Spotify.

Amazon's new "Send To Kindle" button is nothing original. Its functionality is exactly what we've already seen (and used) with apps like Instapaper and Pocket. But it's an important move for Amazon, which stands to benefit from capturing more of our fractured attention spans.

The more we turn to Amazon for ebooks, games, videos, PDFs, etc. — and now any article on the Web — the more money Amazon can potentially make off of us. Of course, Amazon hopes we'll read and watch all those things on its Kindle hardware, whether a dedicated e-reader or a full-fledged tablet like the Fire. But Amazon knows not all of us will buy its devices, so it's also built apps for just about every major platform, including the Web.

The company may not drive revenue directly with each feature and app, or even every hardware sale. But any time Amazon ropes us into its ecosystem, the odds of us giving it more of our money at some point increases. 

Saving Things For Later Is Priceless

The premise of these time-shifting, read-stuff-later features is simple: You come across an interesting article while you're dicking around online, but you can't neglect your responsibilities long enough to read the entire thing. So you click a button and off it goes, into the cloud, where it's stripped of its gaudy visual fluff and can be recalled later in your reading app of choice. For some of us, having this option is indispensable.

With the rate at which new and worthwhile articles, videos and white papers fly at my face all day, I can't imagine not having the option to time-shift some of it. I would lose my mind. 

I've been using Instapaper five years and I love it. When Pocket launched, sure, I was tempted by its rave reviews and sleek design. But switching seemed like too much work only to attain roughly the same exact functionality.

On Instapaper, my favorite articles are neatly stored in topical folders and, more importantly, a massive queue of things to read in the future perpetually awaited me. That queue silently guilt trips me enough as is. I can't just abandon it! More than anything, I just didn't feel comfortable packing up all my things and moving into a new, very similar app. I didn't want a new place to read.

But Amazon's Kindle iPad app? Hmm, maybe. The thing is, I'm already reading there. I don't even have a Kindle, but I've amassed a virtual bookshelf within the Kindle app, where I find myself doing more and more sustained reading. 

Infiltrating Your Reading Habits One Button At A Time

If Amazon's "Send To Kindle" button winds up all over the Web, in news reading apps and in whatever replaces Google Reader, I just might be inclined to click it. The idea of time-shifting articles to the Kindle app is an easier one for me to swallow. The icon is already in my iPad's dock, right there next to Instapaper. Might as well, right?

This is exactly what Amazon wants. The more I turn to it for reading, watching and playing games, the more money it makes and the more likely I am to consider springing for a Kindle or Kindle Fire down the line.

For now, I'm still hooked on Instapaper and I use my iPad for too many things to consider switching to another tablet. But those things could change. In the meantime, I've got a shiny new bookmarklet in Chrome on the desktop, right near the one for Instapaper. Smooth move, Amazon.