Amazon Earnings Up, But Revenue Down

Everyone expected lower profits (aka earnings) from Amazon. But the lower revenues seem a surprise. Still I would not count them out. Far from it.

The Associated Press: Amazon 4Q results, outlook sends stock lower

BGC Financial analyst Colin Gillis said the company "didn't really give a good answer" as to why its revenue fell short of expectations. And while its earnings were stronger than expected, he said the company has been "more revenue driven than earnings driven." That explains why investors focused on the company's sales growth. With a stock valued as high as Amazon's, they are looking for any sign of a slowdown as an excuse to sell.

Business Case for Amazon "Silk" Fire

I noted when first hearing of it that the Amazon Silk browser seemed big from a tech standpoint, and couldn't resist a quip. Business Insider makes the case that the browser is revolutionary from a business standpoint: Not only does it make web browsing on Kindle much faster, it:

• will give Amazon exceptional insight into what consumers are interested in, how they use the mobile Internet, and what they want to buy
• makes the Android operating system, the platform upon which the Kindle Fire runs, much less relevant (and, therefore, much less powerful).
• is Amazon's browser that will control the consumer's interface and data—and search window—not the operating system. Google's software, in other words, has basically become a device-driver.

So BI says. And the argument is persuasive, and why media types need to pay big attention not just to the distribution channel, but also the technology.

Amazon as the Biggest Media Company? (UPDATED)

This post has been UPDATED to add content and edit with further thoughts, facts and observations. (Marked with **)

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This is quite an assertion from Wired.com:

Amazon has swiftly become the most disruptive company in the media and technology industries. Its potential in this space is simply off the charts: bigger than Apple’s, bigger than Google’s or Microsoft’s. It’s becoming a purer version of all three.

OK, well, maybe. Yes, Amazon is huge and hugely influential. But c'mon. The Wired story looks at all the things Amazon "could" do, asserting they will do them. Amazon can become a true media producer, can become a platform on which others build -- can do a lot of things.

So can Google or Apple (or maybe even Microsoft). But it's not a foregone conclusion they'll succeed. Or that they, by launching various ventures, will find them profitable. Or even that they can produce reams of great content -- something they have tried, pulled back from, and are trying to do again. They execute their Web commerce business like a charm. Their Kindle was a first-to-market leader that has, **if not created a category, made it truly viable, as Apple did for MP3 players with its iPod.

But let's not forget that Kindle lost significant market share after the iPad came out and offered not only a seamless way to buy and read books with great functionality, but also -- perhaps most importantly -- worked with publishers on pricing in a way Kindle never had. And let's not forget how the iPhone lost market share after Google's Android took hold.**

The story makes the case that Amazon will eliminate the middleman. That's something they've done for years -- exploiting inefficiencies, using technologies, gathering data, squeezing more. They're adept and disruptive in the way all great Web companies are. I like but don't love the Kindle (which you'll see on this blog) because it was (and is) a closed platform that makes it hard to do a lot of the things one can on the open Web, and that requires you to license a book the use of which is controlled by Kindle (which at least now lets you read on just about every popular screen -- from laptop to Blackberry; though not, officially, the Nook, eh?).

But it's not like Google doesn't know anything about eliminating inefficiencies, or being an engine of commerce. Or that Apple doesn't know about having direct relationships with consumers. And, don't forget that the Android upon which the Kindle is based -- even if it is forked from Google's -- was created by Google.

Amazon’s Future Is So Much Bigger Than a Tablet | Epicenter| Wired.com

Amazon's Kindle Move Away from Kindle Device

David Pogue on Amazon's returning to its core software strength, by making Kindle books available on the iPhone -- obviating the need to own a Kindle to read Kindle books:

The true brilliance of Amazon's move is that you no longer need a Kindle anymore to read current bestsellers in e-book form. Amazon, like thousands of businesses before it (see also: iTunes store, console games), has shifted into selling the razor blades, not the razors.

Those $10 downloadable books—800K software files, with no physical material costs, shipping costs or warehousing costs—are surely where the profit is. In other words, Amazon, having ignited new interest in the whole e-book concept with its $360 Kindle reader, is already steering itself from hardware back to software, to e-books as a service, to the skills where it already excels.

Kindle 2: More Open?

Finished the Amazon Kindle 2 e-reader news conference this morning, and you can read all about it all over the place, including my twitter feed, with hashtag #kindle.

I've asked for a review copy and will let you know (at Naked Media) what I think of it. From appearance, it's a next generation of the device: thinner, a tad lighter, easier to navigate with a new 5-way button, better resolution with its e-ink, and importantly, charging via a USB and a strong text-to-speech reader.

But what strikes me is something Amazon isn't revealing details about, but which has been rumored and CEO Jeff Bezos confirmed: Users will be able to read Kindle purchases on the Kindle 1, the Kindle 2 and unspecified other devices, apparently smartphones. A Kindle exec I asked wouldn't say which ones, or what the pricing or terms would be, but the aim he said is to have multiple devices. Bezos said reading something on one device, then moving over to another you'd be able to pick up where you left off. That's a tiny hint of the kind of openness Kindle will need, I think, to survive long-term. As I've written before, I tried to love my Kindle, but couldn't get into it because though it is an electronic device it is a closed system that doesn't allow me to grab pieces, move the pieces around, access them from anywhere and so on.

One other thing I noticed: the test customers on a video Amazon showed, maybe 8-10 of them, all appeared to be 40 or older, or youngest in their thirties.