Blogs

Amazon's announcement that its Elastic Compute Cloud is being configured to run Windows Server and SQL has gotten the bloggers sounding off on a war between Microsoft and Amazon over cloud computing services.

Microsoft has not unveiled its plans yet. But I explained the difference between Microsoft's current offerings and Amazon's here.

Mary-Jo Foley, on her All-About Microsoft blog, observes, "Microsoft will be fielding its hosted development environment in an increasingly crowded space. Google, Salesforce.com and Oracle are all bidding for pieces of developers' hosted attentions. But for now, Amazon is the big dog."

(Link via P-I Microsoft reporter Joe Tartakoff's post earlier today.)

ZocDoc, a New York-based startup that lets people make doctor and dentist appointments online, has received investment funding from Amazon.com CEO Jeff Bezos and Salesforce.com CEO Marc Benioff.

ZocDoc, which has 12 employees, said today that it gained "two new investors that know a thing or two about building an Internet business from scratch."

Bezos' investment came from his personal investment company, Bezos Expeditions.

IDG News service, via PC World, is reporting that ZocDoc also lets users rate their doctors.

It has a Facebook application to book appointments via that site, too.

Does this mean that Amazon.com sees opportunity in this arena? It doesn't seem likely -- but then, Amazon.com has been venturing in lots of new directions lately. (Grocery delivery and cloud computing, to name two.)

What do you think?

This blog has talked a bit about the changing way that students buy books, and the changing attitude that professors have toward traditional textbooks.

Professors and students are fed up with the high cost of textbooks – and companies are increasingly hoping to tap into their frustration with new solutions.

One company is giving textbooks away -- for free.

On Friday, I caught up with one of the founders of Flat World Knowledge, an East Coast startup that hopes to provide free textbooks online along with cheap PDF versions and the option to buy cheap print-on-demand versions.

It occurred to the company founders in late 2006 that "there was nobody happy anymore with this industry," said Eric Frank, co-founder and chief marketing officer of the Nyack, N.J.-based company.

Students – the consumers – were angry, professors were sympathetic with students, and authors were being compensated less.

"There's got to be a better way if everyone who's served is under served," Frank said.

He and his partners started the concept in 2007, after leaving high-level jobs in the traditional publishing industry. Frank had been director of marketing for Prentice Hall Business Publishing. Partner Jeff Shelstad was editorial director at Prentice.

Economics is the reason for high textbook costs, Frank explained. First, textbook consumers (students) are forced to buy books that professors mandate, skewing the supply and demand curve.

"They don't have much choice, they've got to get this thing for their class," Frank said. "Our model is kind of fixing that."

Plus, most campus bookstores resell books, meaning that the author gets royalties on the initial sale but not thereafter. Publishers set prices high to get as much money as possible in the first semester of a book's release because profit drops off sharply in following semesters.

When Flat World Knowledge first goes live in January 2009, it plans on offering books in several formats. A print-on-demand book in color would sell for $60. A black and white version would sell for $30. A PDF version would sell for $20, or $2 per chapter. An audio version would sell for $30, or $3 per chapter. An HTML version would be free, and accessible from the company's Web site.

The company would also sell accompanying study aids such as online quizzes and flash cards.

Eventually, Flat World Knowledge hopes to develop textbook versions for e-book devices such as Amazon's Kindle and the Sony e-book reader. Kindle's obstacles in the textbook industry are its size and price, Frank said.

All the books are digital rights management free, he said, meaning that they can be copied over and over and over and over.

Frank acknowledged that copying is scary. What stops a student from buying a PDF and e-mailing it to all of his friends? Nothing.

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Law professors from around the country gathered in Seattle on Saturday to put the printed textbook on trial.

And because those professors and their universities influence the buying decisions of thousands of law students each year, traditional book publishers as well as representatives from Adobe, Sony and Microsoft participated. A representative from Amazon.com did not attend as expected.

The daylong discussion educed topics ranging from cerebral musings – could information proliferation make lawyers obsolete? – to technical nuance – what's the difference between open source and open access?

At least one conclusion became clear – the fact that about 40 people gathered at Sullivan Hall at Seattle University Law School on a sunny Saturday to ponder life beyond print shows that times are changing in publishing.

Traditional publishers are confused about what professors want and where the industry is going, said Keith Sipe, chief executive of Carolina Academic Press, which publishes more than 100 books per year.

"I sign many contracts that commit us to print books three years, or more, into the future," Sipe wrote in a memo distributed at the conference. "If the future of books is in jeopardy, I need to slow down."

Teachers want more flexibility, such as the ability to add their own information to text, insert audio files and provide links. They also want more ways to engage students and sought digital copies of textbooks that can be sorted and searched.

"If the students had materials on their laptop, they wouldn't be playing Battleship or shopping or doing other things during class," said Ed Rubin, dean of Vanderbilt University Law School.

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Amazon.com has been weathering the economy well, so far.

But an analyst note published Friday downgrades Amazon's expected earnings, predicting that consumers would spend less this holiday season because of economic uncertainty.

"We believe Amazon continues to gain e-commerce market share through a combination of category, marketplace and geographic expansion, but we do not believe the company is immune to the current slowdown," writes Colin Sebastian with Lazard Capital Markets.

He lowered Amazon.com's third-quarter earnings per share estimate to 25 cents, from 27 cents.

E-commerce growth should outpace brick-and-mortar growth, Sebastian said. But, at the same time, retailers are likely to respond to falling consumer confidence with discount prices earlier than usual.

"Online spending trends remain challenging, and may have weakened further since the end of August," he said.

He also warned about the rising value of the U.S. dollar, which would hurt Amazon's numbers. (A weak dollar helps U.S. companies by making their products more affordable abroad.)

Another analyst, Mark Mahaney with Citigroup Global Markets, wrote in a note on Thursday that e-commerce sellers are worried about holiday spending.

Online sellers are diversifying their sales, and moving away from eBay, which helps Amazon, Mahaney said. However, sellers will want to increasingly develop their own Web sites to be less reliant on Amazon for sales.

One of Amazon's biggest risks is "very significant competition from many other companies, including major Internet e-commerce and search companies, multichannel retailers, and comparison shopping engines."

My P-I colleague Amy Rolph explores today the "buy, borrow or steal mentality" in the textbook industry and the piracy trend in textbooks.

University presses are reporting declining book sales, which could be attributed to book resales, illegal distribution online and rent-a-text services.

She quotes the director of UW Press as saying, "I can't prove it, but I suspect that some amount of the drop people are reporting is because those sales are going to Amazon."

The article makes several points, including:
-- Cash-strapped students are finding ways around paying hundreds of dollars for books each semester
-- Publishing houses are trying to figure out ways to win them back
-- Open-source solutions are gaining popularity.

Will technology make traditional textbook publishing obsolete? It doesn't seem likely to happen soon. Though, e-book proponents certainly seem to think they've found the answer.

Check out her article for more.

Amazon.com said this morning that its MP3 music store will be pre-loaded on the T-Mobile G1, the first phone to be powered by Android.

T-Mobile G1 owners will be able to buy and play music from Amazon MP3, whose songs are DRM-free and thus able to be loaded onto multiple devices. Small catch: Downloading music to the phone requires a Wi-Fi connection.

Reuters reporter Paul Thomasch said in his blog, "Thanks Amazon! The online retailer put out a release this morning with some juicy details about Google's new mobile phone -- even as we're still waiting for the official unveiling later today."

Amazon MP3, which is about one year old, has partnered with other companies in promoting its store, including Pandora MySpace Music. Because its songs are DRM-free, Amazon has emerged as a competitor to Apple and its iTunes program. Amazon sells songs -- generally -- for 89 cents -- or usually 10 cents cheaper than iTunes.

Android is an open and free mobile phone platform developed by 30 tech and mobile companies. The effort is being led by Google.

Want to learn more about the T-Mobile G1? Check out this post on Engadget.

The Daily Telegraph in the U.K. asks today, "Google Android: Can it take on the iPhone?"

Update: Here's a video walk-through of the new phone in action (no audio):

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Google Book Search took a big step on Monday in expanding its service by opening it up to retailers and publishers.

This means that "anyone with a Web site" can embed books from the Google Book Search index, and display full-text search results from Book Search, writes Alex Diaz, product manager of Google Book Search.

Web sites can also embed book ratings, reviews and readers' book collections.

Participating retailers include Books-A-Million and The Book Depository in the U.K. In upcoming weeks, Borders.com, Buy.com and Powell's Books are expected to sign on.

Google also posted an open set of APIs, so that Web developers can build applications and customize how they use the search functions.

One participant not mentioned is Amazon.com. Why?

Juan Carlos Perez, of IDG News Service, explains via PC World, that "Amazon.com didn't immediately reply to a request for comment, but it's a safe bet that it's not happy with Google's move, which will allow Amazon.com competitors to rival its inside-the-book search."

Amazon.com already has a "Search Inside This Book" function, launched in 2003 to the ire of some authors.

Blue Nile Inc., the online jewelery retailer, has teamed up with Bill Me Later Inc. to give customers the option of paying later -- way later.

In hopes of boosting sales, Blue Nile said customers can make no payments for the first 90 days on purchases worth at least $250.

"Customers can benefit from the convenience of Bill Me Later, further enhancing their Blue Nile experience now and throughout the gift-giving season," said Blue Nile Chief Executive Diane Irvine in a statement.

Amazon.com partnered with Bill Me Later in July, after having made an investment in the company last year.

More than 1,000 companies use the Bill Me Later service, including travel companies and airlines. Of the top 50 U.S. online retailers, 32 percent use Bill Me Later, according to Jupiter Research.

Though the service works like a credit card, issuing credit for a purchase until the customer pays up, Bill Me Later caters to customers who don't want to use an actual credit card for online shopping.

Jeff Bezos supported Democratic incumbent Chris Gregoire in this year's governor's race with a $1,000 donation, according to the P-I's online database of campaign contributions.

Montage of Chris Gregoire and Dino Rossi photos by AP and Seattle P-I

But that shouldn't be a surprise. According to NewsMeat, Bezos supports Democrats more often than Republicans. Though, in the past he's supported Michigan Republican Senator Spencer Abraham and Washington's Republican Senator Slade Gorton.

The P-I's database is a fun tool -- it shows, for example, that Microsoft employees tend to give more money to Gregoire than her Republican opponent, Dino Rossi. And that Boeing employees also tend to support Gregoire, but not by much.

Most donors who name Amazon as their employer tend to support Gregoire. (Some employees may donate but not list Amazon as their employer, so the list is inconclusive.)

But among those who did indicate working for Amazon, the Democrats raised $5,970 and Republicans raised $280.