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Wiki page here
TED video below:
Jeff Bezos on the next web innovation

Even though it does have something to do with the biggest river in the world,because it is named after it, Amazon is a lot more than that. Founded in 1994 by Jeff Bezos and based in Seattle, Washington, it is now one of the biggest online bookstores in the world.

Since year 2000 the logo of the company is an arrow going from A to Z, representing the customers satisfaction (as the arrow forms a smile) and the urge to have every product from the alphabet.

I personally know Amazon mostly as an online shop for books. When visiting the site and searching for a book people can also read reviews of books and decide whether to buy them or not. Sometimes these reviews really help. However there was a case a few years ago when some error occurred and  the names  of anonymous users, who posted some kind of review, were revealed. A lot of them turned out to be the actual authors of the books, who were practically boosting their sales by voting and making comments about their own books. Now how silly is that?

Nevertheless, Amazon has steadily branched into retail sales of  CDs, DVDs, software, videotapes, kitchen items, jewelery, lawn and garden items, toys & games, consumer electronics and much more.The domain amazon.com attracted at least 615 million visitors annually by 2008, which if you come to think of it is a huge number…

Kindle e-book Reader. (Credit: Amazon.com)

Jeff Bezos, CEO of Amazon.com continues to push the popular e-book reader, the Kindle. Its aim is to make Kindle the preferred electronic book reader, similar to Google’s search engine or Apple’s iPhone. I have a gut feeling, that eventually he will bake the cake and eat it too.

Amazon on Tuesday, November 10th.,  made available its new Kindle for PC, free software that lets Kindle customers read their e-books on tablet PCs, netbooks, notebooks, and other personal computers.

The software can be downloaded from the Kindle for PC – Beta page. The quick installation sets up the reader application, prompting you to log in and register with your Amazon account or create a new one. After logging in, you can download books that you’ve already purchased at the Kindle store or click on a link to buy new ones.

Kindle for PC offers many of the options you’ll find on a Kindle e-book reader. You can increase or decrease the size of the font and change the width of the page and words per line. You can navigate from one page to another by clicking on the Next or Previous Page arrows or by using the scroll wheel on your mouse. You can jump to a specific page, such as the cover, table of contents, or last page read, and bookmark a specific location for future reference. You can also read notes and highlights created on your Kindle device, but you can’t create them on Kindle for PC yet.

“Kindle for PC is a great way for people around the world to access a huge selection from the Kindle Store and read the most popular books of today even if they don’t yet have a Kindle,” said Ian Freed, vice president of Amazon Kindle.

Amazon plans new features for the next edition of Kindle for PC. The company said it will offer the ability to create notes and highlights, search for words or phrases in your books, and click on an image to zoom in or rotate it.

With the launch of Kindle for PC, Kindle books can now be read on Kindle readers, the iPhone, the iPod Touch, and personal computers. Kindle for the PC is compatible with Windows 7, Vista, and XP operating systems. A Mac version is coming soon, promised Amazon.

I think this is a step in the right direction in making Kindle a favorite mainstream e-book reader.  The next two imperative steps are to trim its selling street price and to introduce a color screen.  Only then it will be an unstoppable train heading directly to the bank.  Good Day.

Download Kindle for PC – Beta

As an early adopter (November 2007) of the Kindle I have been a rather ardent fan of what could now be considered the forerunner of e-readers. I recently downloaded several titles that I wanted to read. I opened my Kindle the other night to see some odd horizontal lines across the entire screen yet the device was in the off position. After charging and recharging with no change in the display it was obvious that the flame had gone out on my Kindle.

Out of warranty (this one was more than a year old) apparently I am out of luck. So now I have several titles in my account that I cannot view unless I purchase a new Kindle or I guess return my Kindle to Amazon (at my cost) and hope that they can somehow repair it for less than the cost of the now reduced price of $ 259. I paid $ 399 for mine and it does thrill me that not once did Amazon offer me some sort of discount on purchasing the latest version which apparently is superior to the one that I have. Of course mine now does not work at all so a book with no printing is on a par.

A little history – the first one I received did not work and I had to send it back. Amazon had me check a bunch of things prior to agreeing to replace it which they did with no questions asked. Then I had another one which after several months also went dead. Again through the checklist that Amazon has you do on the phone (a half hour or so) with their tech person before they assented to my sending it back for yet a third which I received and has been working fine for more than a year.

I have been (and remain) a fan of Amazon in general. Jeff Bezos is a smart guy and has defied his critics in managing a company that has a stellar reputation for customer service and intuitive product offerings. But I really don’t understand the idea of not offering a replacement for a broken Kindle ANY TIME a customer asks. After all aren’t I going to use that platform to purchase e-books for the foreseeable future? And I buy a fair amount of books. I can ‘return’ those titles that I downloaded but have not read for some sort of rebate but that really does not solve my problem. I love e-readers (as well as traditional books) and think they will only get better (how about color folks and a back-lighted screen option?).

So now I have to reconsider my entire relationship with Amazon’s Kindle. Maybe the Sony Reader, or the new device from Plastic Logic, or maybe even the new Barnes & Noble device. What a shame, the Kindle had me at hello.

Oleh Sigit Kurniawan

MASIH INGAT sosok Jeff Bezos? Pria kelahiran New Mexico tahun 1964 ini menjadi salah satu ikon revolusi internet yang merangsek ke dunia bisnis. Bezos terkenal karena toko buku online-nya, Amazon.com, menjadi e-bookstore terbesar di dunia.

Kehadiran Amazon.com telah mengubah cara orang membeli buku. Konsumen tidak perlu lagi bersusah payah datang ke sebuah toko buku, menyusuri rak-rak buku, merogoh kocek, dan membayar buku pilihannya di kasir. Kini mereka tinggal mengklik situs tersebut, mencari buku yang diinginkan dengan mesin pencari, memesan, lalu membayarnya lewat e-banking. Tidak lama kemudian, buku itu akan dikirimkan ke alamat si pemesan—tidak peduli dia ada di negera mana pun.

Tidak bisa disangkal internet telah melakukan perombakan besar pada pola relasi antarumat manusia. Model komunikasi tradisional dengan tatap muka dalam satu ruang pun semakin tergeser. “Internet merupakan badai raksasa yang sangat besar. Dan salah satu hal konstan dalam badai tersebut adalah pelanggan,” kata Bezos.

Nah, Bezos merupakan salah satu orang yang menikmati legitnya bisnis internet. Kini internet pun menjadi peranti mutakhir untuk menjalankan bisnis modern. Dalam konteks inilah, lahirlah konsep internet marketing.

Internet Marketing
Internet marketing atau sering disebut dengan marketing online dibedakan dengan marketing konvensional atau marketing offline. Secara sederhana, internet marketing adalah semua kegiatan pemasaran yang dilakukan melalui internet atau dunia maya. Pakar marketing dunia Philip Kotler, dalam According to Kotler (2005), mengakui bahwa internet telah melakukan revolusi pada praktik dan efisiensi bisnis.

Meski media utamanya adalah online, internet marketing tetap saja membutuhkan jasa layanan lain secara offline. Ada dua metode pemasaran dalam internet marketing ini. Pertama, marketing online yang memasarkan produk masih menggunakan jasa kurir. Jasa kurir ini sering disebut dengan “internet marketing affiliate”. Kedua, marketing online yang mengandalkan kekuatan jaringan atau network marketing.

Karakter dari internet marketing affiliate ini adalah beli putus. Artinya, sesudah terjadi transaksi, hubungan antara penjual dan pembeli putus begitu saja. Sementara itu, network marketing biasanya menjual barang yang bisa diunduh oleh si pemakai internet. Misalnya, menjual gambar, teks-teks kuliah, teks seminar, bahkan orang pun bisa menjual buku-buku (e-book) dan video seperti YouTube.

Daya Tarik Internet
Pada prinsipnya, marketing di dunia maya sama dengan marketing offline. Tapi, para internet marketer melihat beberapa kelebihan internet marketing di mana mereka mampu mendulang fulus jauh lebih banyak ketimbang dengan cara konvensional. Setidaknya ada beberapa kelebihan internet marketing ini.

Daya tarik pertama adalah target market-nya tidak terbatas. Persis seperti karakter internet yang “borderless”, internet marketer mampu menjangkau target market-nya secara tidak terbatas di seluruh dunia.

Promosi di internet pun bisa dilakukan secara lebih efektif. Internet marketer mempunyai kebebasan berkreativitas dalam menentukan bentuk promosinya. Mereka bisa leluasa menentukan target market yang dipilih. Caranya dengan online ad dan viral marketing. Bisa juga dikawinkan dengan jalur offline melalui komunitas.

Selain itu, marketer bisa berpromosi dengan menampilkan search engine. Menurut Bob Julius Onggo, penulis buku Cyber Branding Through Cyber Marketing, peranti search engine memudahkan konsumen mencari barang, membeli produk, melakukan outsourcing maupun riset. Konsumen yang menggunakan alat ini mood-nya lebih siap ketimbang mereka yang dikunjungi melalui e-mail spam yang biasanya sudah antipati dan tidak siap.

Sementara itu, internet marketer bisa memanfaatkan sistem otomatisasi yang melekat pada internet. Hal ini membantu marketer mengurangi ketakutan kehilangan prospek. Alat ini membantu marketer untuk melayani calon pelanggan di seluruh dunia selama 24 jam. Sistem ini disebut dengan autoresponder yang bisa menjawab dan melayani semua orang di mana saja dan kapan saja.

Ada sejumlah fakta yang membuktikan berbisnis secara online membutuhkan modal dan risiko yang lebih kecil dibanding bisnis offline. Sementara hasil yang didapatkan bisa saja lebih besar ketimbang dengan cara konvensional. Internet marketing pun memungkinkan adanya transaksi real time dengan pelanggan di seluruh benua. Bisa dibayangkan jika para internet marketer harus menyambangi seluruh pelanggannya yang tersebar di berbagai benua. Selain memakan banyak biaya, efektivitas juga akan berkurang.

Kemasan Tetap Penting
Orang boleh bilang, “Don’t judge the book by its cover.” Tapi, ingat kemasan tetap menjadi media utama dalam marketing. Sosiolog Marshall McLuhan mengatakan, “The medium is the message.” Bagi McLuhan, kemasan atau media penyampai itu merupakan pesan tersendiri. Apalagi dunia sekarang yang serba digital di mana berbagai pencitraan membombardir penglihatan kita.

Berhubungan dengan itu, Philip Kotler mengatakan bahwa setiap perusahaan sebaiknya membuat sebuah situs yang mencerminkan tujuan, sejarah, produk, visi, dan beberapa segi lain perusahaan. Situs ini juga harus seefektif mungkin agar orang bisa gampang mengontak perusahaan.

Makanya, ada hal-hal yang patut diperhatikan oleh internet marketer dalam membuat sebuah situs. Rafi A Mohammed dan koleganya menyebutnya dengan “7C” seperti yang tercantum di bukunya Internet Marketing: Building Advantage In A Networked Economy. Yang dimaksud “7C” ini tak lain adalah Context, Content, Community, Customization, Communication, Connection, dan Commerce.

Yang dimaksud dengan context adalah layout atau desain situs tersebut. Desain sebaiknya mempunyai nilai estetika dan tampilan fungsional. Situs merupakan paduan dari grafis, warna, dan fitur. Namun, semua itu harus mendukung tujuan penggunaan seperti kemudahan navigasi.

Internet marketer harus memperhatikan content atau isi yang disajikan, seperti teks, gambar, suara, maupun video. Soal isi, marketer harus cerdas dan selektif sesuai kebutuhan target pasarnya. Belum tentu situs yang canggih dan rame fiturnya bakal laku.

Strategi membentuk komunitas (community) penting pula dalam membangun sebuah situs. Komunitas terbentuk dari kesamaan minat maupun kebutuhan. Situs akan mempunyai nilai tambah jika memberi ruang kontak antarpelanggan. Ruang interaktif ini akan menguatkan relasi perusahaan dengan pelanggan maupun antarpelanggan sendiri. Pelanggan bisa saling tukar informasi dan transaksi jual beli.

Selanjutnya, situs sebaiknya cukup fleksibel dengan customization. Ini menyangkut kemampuan situs memodifikasi diri untuk atau dimodifikasi baik dari perusahaan (tailoring) maupun pelanggan (personalization).

Situs yang baik juga sebaiknya interaktif. Sekarang tidak jarang perusahaan yang memakai blog (corporate blog) karena lebih interaktif. Intinya, perlu ruang komunikasi dua arah antara pemilik situs dan users. Ini bisa dilakukan dengan e-mail, milis, customer service request, community blog, maupun instant messaging.

Koneksi (connection) antarsitus pun penting. Internet marketer harus pandai-pandai membuat link atau barter link dengan situs-situs strategis yang sudah mempunyai banyak pengakses. Link ini akan memudahkan konsumen, baik sengaja atau tidak sengaja, mampir di situs tersebut.

Terakhir, tidak boleh dilupakan bahwa kemampuan situs untuk melayani transaksi (commerce). Situs sebaiknya sesimpel mungkin di mana orang bisa melakukan transaksi online secara cepat sekaligus aman.

eBay dan Amazon
Siapakah jawara-jawara yang sukses menerapkan internet marketing? Di antara sederet merek, ada dua yang layak dijadikan contoh. Kita awali dengan eBay. Situs lelang pertama yang menggunakan jalur online ini dibesarkan oleh Pierre Omidyar. Ia menangkap peluang bisnis internet dan mendirikan auction web pada tahun 1995. Perusahaan konsultasi Omidyar, Echo Bay Technology Group, resmi menjadi milik situs tersebut.

Omidyar segera mendaftarkan situsnya dengan nama eBay. Situs ini berkantor di San Jose, California, Amerika Serikat. Usai berdiri sebagai perusahaan, situ lelang ini dikelola secara serius. Salah satunya dengan mengangkat Margaret C Whitman, mantan eksekutif Hasbro Inc, The Walt Disney Co, dan Procter & Gamble, menjadi presiden dan CEO eBay pada tahun 1998.

Tangan ajaib Whitman berhasil membesarkan layanan belanja online ini. Perempuan itu punya jurus manajemen yang mampu mengelola kompetisi dengan situs sejenis, seperti Amazon dan Yahoo! Ia menggandeng America Online (AOL) sebagai provider eBay. Hasilnya, pada kuartal ketiga tahun 1999, situs ini sukses mendongkrak income 280% menjadi US$ 741 juta. Ia pun memfokuskan diri pada bisnis transaksi dan iklan yang memberinya laba 6% dari setiap transaksi. Selain itu, ia memberi insentif berupa pembebasan biaya pengiriman barang.

Siapa pun yang menjadi pelanggan haruslah dihormati. Itulah prinsip yang dipegang teguh Whitman dalam bisnis. Oleh karenanya, ia menjadikan situsnya seinteraktif mungkin bagi pelanggan. Tim eBay harus menanggapi setiap masukan dan kritik dengan cepat. Bahkan, Whitman sendiri rela turun tangan merespon e-mail pelanggan selama 24 jam. Pihak eBay tidak segan-segan membayar jutaan dolar atas keteledoran servis pada pelanggan. Bagi Whitman, ini kunci mempertahankan loyalitas pelanggan.

Whitman juga menerapkan marketing internal dengan memberi teladan pada tim. Ia membeli barang kebutuhan sehari-hari termasuk mobil melalui eBay. Ekspansi pun digelar. Pada tahun 2001, eBay mengakuisisi iBazar, perusahaan lelang di delapan negara Eropa, Selandia Baru, dan Korea selatan. Tahun 2003, eBay bermitra dengan FachNet untuk mendapatkan pelanggan baru di China. Di tahun yang sama, eBay mengakuisisi PayPal, perusahaan bank online dengan nilai US$ 1,5 miliar.

Mereka juga menggandeng GE Business Credit Services untuk membantu pembiayaan pengusaha kecil dan menengah. Untuk meningkatkan brand image, eBay juga melancarkan berbagai kegiatan tanggung jawab sosialnya. “Bagi saya, internet marketing adalah gelombang besar di masa mendatang. Ini tantangan bagi eBay untuk melayani pasar,” tandas Whitman.

Lain cerita dengan situs Amazon.com. Kesuksesan toko buku online ini tidak lepas dari kepiawaian Jeff Bezos dalam membentuk dan mengelola proposition bagi pelanggan. Ada empat elemen utama dari value ini, yakni: convenience, selection, price, dan customer service. Sukses Amazoni juga didukung dengan performa ritel virtual yang menjangkau seluruh lapisan masyarakat di tingkat lokal dan global secara efektif dan efisien.

Bezos membangun jejaring dengan banyak penerbit buku. Ia berhasil mengembangkan sistem selection. Katalog Amazon mampu menyediakan lebih dari 1,1 juta judul buku dengan sistem pencarian yang cepat dan mudah. Amazon memberikan harga lebih rendah ketimbang toko buku konvensional. Sepertiga dari bukunya didiskon 10% dari harga ritel. Bahkan, buku kategori best seller didiskon 30%.

Bezos tidak ingin menjadikan Amazon.com sebagai toko buku terbesar di dunia. Tapi, menjadi toko buku serba ada terbesar di dunia. Pada Maret 1999, Bezos mengumumkan Amazon siap bersaing dengan eBay. Saat ini perusahaannya sudah mempunyai 2.000 karyawan.

Untuk mendukung obsesinya menjadikan Amazon toko buku serba ada terbesar, Bezos meletakkan enam nilai dasar perusahaan yang harus dipahami oleh seluruh tim. Nilai pertama adalah obsesi pelanggan. Servis harus menjawab apa yang dibutuhkan pelanggan dengan harga semurah mungkin dan waktu secapat mungkin.

Kedua, ia menawarkan peluang kepada seluruh karyawan untuk menjadi pemegang saham di Amazon. Baginya, semua karyawan adalah pemilik perusahaan. Ketiga, semangat mengerjakan dengan cepat tanpa menunda. Keempat, kesederhanaan. Asal tahu saja, semua meja kerja terbuat dari selembar pintu dengan kaki terbuat dari besi 4×4 inci tersambung dengan besi siku. Di sana, uang tidak dihambur-hamburkan untuk dekorasi atau kemewahan.

Kelima, Bezos menerapkan standar tinggi untuk karyawan. Karyawan disaring selektif mungkin. Keenam, inovasi. Amazon.com terus memperkenalkan ide baru, sistem baru, dan penawaran baru pada pelanggannya.

Kini, Amazon.com menjadi salah satu jawara bisnis berbasis internet. Profit dan nilai sahamnya setara dengan perusahaan raksasa.

@ Referensi :berbagai sumber

Amazon CEO Jeff Bezos with Kindle DX
© AFP/Emmanuel Dunand

Amazon crowned a new bestseller on Thursday — the Kindle, its electronic book reader.

“Kindle has become the number one bestselling item by both unit sales and dollars — not just in our electronics store but across all product categories on Amazon.com,” said Amazon founder and chief executive Jeff Bezos.

In keeping with previous practice, Bezos declined to reveal sales figures for the Kindle, but Forrester Research estimates the device has a nearly 60 percent share of the US market followed by the Sony Reader with 35 percent.

Forrester estimates that three million e-readers will be sold in the United States this year, up from a previous forecast of two million units, and for e-reader sales to double to six million units next year.

Bezos also announced that the price of the newest international version of the Kindle, which is designed to synch with telecom networks in 100 countries, was being cut to 259 dollars from 279 dollars.

The Bezos statements came as his Seattle-based company reported a 68 percent rise in net profit in the third quarter to 199 million dollars, or 45 cents per share, better than the 33 cents per share forecast by Wall Street analysts.

Revenue increased 28 percent to 5.45 billion dollars during the quarter which ended on September 30.

Amazon shares soared 14.77 percent in after-hours electronic trading to a record 107.25 dollars.

Unlike eBay, which unveiled a cautious outlook for the holiday season the previous day, Amazon delivered an optimistic sales forecast for the Christmas period.

It said it expected fourth-quarter sales of between 8.1 billion dollars and 9.1 billion dollars, an increase of between 21 percent and 36 percent over last year.

Amazon said North America sales rose 23 percent in the quarter to 2.84 billion dollars while international sales from its British, German, Japanese, French and Chinese sites rose 33 percent to 2.61 billion dollars.

It said worldwide media sales, which include music, books and other items, grew 17 percent to 2.93 billion dollars.

Sales of electronics and other general merchandise sales climbed 44 percent to 2.36 billion dollars.

Amazon also said that the Kindle book store has increased its number of titles to more than 360,000 books including 101 of the 112 New York Times bestsellers.

Bezos told Amazon’s annual shareholders meeting in May that the company may never reveal Kindle sales figures. “Our point of view on that is that there can often be a competitive advantage in keeping the numbers close,” he said.

But Amazon is not the only firm trying to shake up the market for electronic books.

Google is pressing ahead with plans to digitize thousands of books and on Wednesday hardware firm Hewlett-Packard said it would get in on the action, stepping up its out-of-print book publishing business and taking on Google.

The US computer giant announced Wednesday it has teamed with the University of Michigan to offer print versions of more than 500,000 out-of-copyright books in the school’s library.
Source: AFP American Edition

Algunos compradores del libro electrónico, Kindle 2.0, demandaron a la empresa Amazon por eliminar, sin su consentimiento, dos libros que habían adquirido y guardado en sus aparatos. La compañía señaló que “no disponía de los derechos para difundir ambos ejemplares”, aunque su fundador, Jeff Bezos, reconoce que la medida tomada fue “estúpida e irreflexiva”.

No todo son elogios para el nuevo e-book o libro electrónico fabricado por la empresa Amazon. Según Europa Press, el pasado mes de julio, al cliente Justin Gawronski le borraron de su Kindle el libro 1984. Amazon justificó su acción amparándose en que una tercera persona usó la plataforma de la empresa para introducir esta obra en el aparato electrónico, sin que la empresa tuviese sus derechos.

En cambio, si revisamos el contrato de licencia y condiciones de uso que los clientes asumen al adquirir el producto, Amazon se reserva el derecho a modificar, suspender o cancelar el servicio si lo cree oportuno, quedando exento de toda responsabilidad con los compradores. Por tanto, el comprador tiene derecho a la lectura pero no a la propiedad, ya que le pueden eliminar sus archivos sin previo aviso.

A pesar de estos percances con la justicia, el Kindle se ha convertido “en el producto más vendido de Amazon.com”, afirma el fundador de la empresa, Jeff Bezos. En España su precio ronda los 300 euros. Cuenta con 295.00 libros y, según la agencia de noticias Reuters, un ejemplar tarda solo 60 segundos en descargarse.

Dr. Maria Montessori developed auto-didactic materials, or materials that teach when manipulated by a learner.  She was born in the 1870’s and passed on the 1950’s.

Think about the technology that was introduced within her lifetime (automobiles, radio, television, airplanes, telephones) and the technology introduced after her death (computers, cell phones, the internet, space travel, satellite communication, GPS).

Dr. Montessori never saw photographs of the earth from space.  She never saw a computer in action or marveled at the information available on the internet.

What kind of auto-didactic materials would she create if she were alive today?

These thoughts were inspired by a TED talk by Will Wright, the developer of the SIMS computer games which he says were inspired by the Montessori materials of his youth.

Do you suppose that Larry Page & Sergei Brin (Google founders) Will Wright (Game designer) Jeff Bezos (founder of Amazon) and others might be interested in endowing an annual prize for the development of new, developmentally appropriate auto-didactic materials?

The Montessori Prize could be like a Nobel Prize for material design, maybe with age categories 0-3, 3-6, 6-12, 12-18, adult.

This would be an interesting way to raise awareness of Montessori education principles within the “toy” and education industry.

(Credit: Google Inc.)

It’s not a secret that Amazon’s CEO, Jeff Bezos wants to be the unchallenged Mogul of the electronic book business, as well as the biggest book vendor under the sun.   Kindle, the popular e-book reader, has made things easier.

Now Google wants a piece of the pie—Google is hitting the online bookstore business.  The search giant announced  yesterday at the Frankfurt Book Fair, that in the first half of next year, it will launch Google Editions, a new service that will deliver e-books to anyone with a Web browser.

Partnering with publishers which whom it already has digital rights deals, Google plans to initially offer about a half-million books through the service.   Readers will be able to purchase books directly from Google or from online bookstores such as Amazon and Barnes & Noble.

The Mountain View giant said that consumers would be able to read the books on any connected device, including PCs, Netbooks, and smartphones.   Apple iPhone users could access the e-books through their Gmail accounts.

Google said it doesn’t plan to offer a dedicated e-book reader to accompany the new service, according to the press reports.

“We’re not focused on a dedicated e-reader or device of any kind,” Tom Turvey, Google’s director of strategic partnerships, told journalists at the Frankfurt Book Fair.

When Google said they wanted to organize all the information in the planet; they weren’t kidding.  I’ll be watching this project closely and see how Jeff Bezos reacts to this new challenge.  In the world of technology, there’s never a dull moment.  Good Day.

Today the Communications Workers Union decide whether postmen at the Royal Mail should progress towards strike action.

I wonder what has gone wrong.

Because it seems to me that the Royal Mail is in a parlous state – and the reason I care is that the state of the Royal Mail affects me and just about every other business in the country. I generally send my invoices by post (although of course, now I’m emailing them over). Mail order and internet companies need the postal service to ensure delivery to customers – and Christmas, their biggest trading period of the year, is coming up. Jeff Bezos, the legendary founder of Amazon.com said at the start of this decade that the existence of the Royal Mail was the main reason that the UK was Amazon’s first market outside the US.

Business in the UK needs the Royal Mail.

But it’s not looking good. It seems to me that the Royal Mail’s management has messed up:

• The toughest challenge they have failed to solve is the massive pension deficit (I haven’t checked the figures, but I believe it stands at around £9bn)
• The company still has a truly abysmal record on staff relations, with much acrimony between management, staff and unions.
• Customers see very little to feel positive about, too. Second class deliveries barely exist; and in a world of email, the vast majority of postal mail is bills or unwanted junk mail (the sort that if it was online would be considered spam).

And then, there’s the staff. They’ve messed up too.

• They have a reputation for militancy.
• The Sunday papers this week featured stories of mail and parcels stacked up, unsorted and undelivered, in postage depots; while sorting office staff went home early.
• The staff seem to have little understanding of (or involvement in) the major challenges facing their company: the threat from modern media like email, the effects of the recession etc.
• And they also don’t seem to have noticed the threat from deregulation: companies like Deutsche Post are making great inroads in picking up more lucrative delivery and parcel handling operations from under the Royal Mail’s nose.

As a small business, it seems to me that I have much to worry about in watching this important part of daily British business life fall apart. And fall apart it will, unless there’s a dramatic improvement in industrial relations.

Amazon's highly publicized electronic book reader, The Kindle. (Credit: Amazon.com)

Amazon’s CEO, Jeff Bezos said he would revolutionize the publishing industry with his e-book reader Kindle and he’s keeping his word.  The electronic reading gadget is going global.

Amazon announced yesterday evening that it would soon begin selling a new version of the Kindle that can wirelessly download books both in the United States as well as in more than 100 other countries.

The new Kindle is physically identical to Amazon’s current Kindle, with its slender profile, six-inch black-and-gray screen and angular keyboard. The main difference: it will use the wireless networks of AT&T and its international roaming partners, instead of Amazon’s existing wireless partner for the Kindle, Sprint. Sprint’s network is incompatible with most mobile networks outside of North America.  The new Kindle will sell for $279.   It begins shipping on Oct. 19th.

In addition, Amazon also announced a price cut for the United States-only Kindle, which will continue to be sold alongside the new global Kindle. The domestic Kindle is now $259, down from $299. Amazon previously dropped the price in July, from $359, to stimulate demand and to match the prices of rivals like Sony, whose least expensive e-reader now costs $199. Amazon also sells the larger-screen Kindle DX for $489.

Though exact sales numbers are hard to come by, it appears electronic reading devices are having a breakout year. In a report being released on Wednesday by Forrester, the research firm revised its prediction for the industry, saying that three million e-reading devices would be sold in 2009, up from its previous estimate of two million.

Forrester analyst Sarah Rotman Epps thinks that e-reader prices need to come down even more if the devices are going to become mainstream products, however. She suggested $99 as a price that would be much more likely to lure consumers.

She said people “have somewhat unrealistic expectations of how much consumer electronics in general, and e-readers in particular, should be.”

Even if the Kindle is marketed in Panama, I would have a hard time coughing $279 for an electronic book reader.  At this price, I’d rather buy physical books at a local bookstore.  Plus, color is still missing which means a lot to me.  Any comments?  Good Day.

Wal-Mart (WMT) got its start almost 50 years ago with its first store in Rogers, Arkansas (1962). Since then, the company has expanded to create a global franchise generating more than $400 billion in revenues with a market capitalization valued at about $190 billion. Amazon.com Inc. (AMZN) is a relative toddler (founded in 1995 by CEO Jeff Bezos) generating about $20 billion in revenue with a market cap about 1/5^th that of Wal-Mart. Mr. Bezos graduated summa cum laude, Phi Beta Kappa in electrical engineering and computer science from Princeton University in 1986, and we know he has no problem in thinking big. The evidence can be found in his space travel company, Blue Origin, which is expected to initiate human travel in the upcoming years. Beyond space, Mr. Bezos is presented with a multitude of growth opportunities that have the potential of elevating Amazon from a young toddler into a mature adult like its cousin Wal-Mart.

So how does Mr. Bezos get the company through puberty to adulthood? Well actually, all I believe it will take is just more of the same. The company has created an incredible franchise with huge barriers to entry, if you consider the billions spent on the technology, infrastructure, and its distribution dominance as compared to its e-commerce brethren. Bolting on new categories (whether its jewelry, sporting goods, groceries, private label or digital downloads) can be extremely profitable since unlike Wal-Mart, Amazon doesn’t need to build or reconfigure thousands of stores to expand into new categories. For example, Wal-Mart has opened over 600 Sam’s stores nationally in order to target the wholesale club market. Once a new category is added, the blue-print is rolled out nationally and then eventually internationally. And just like Wal-Mart, as economies of scale are achieved, the cost savings are rolled back into lower prices, which then brings more customers, and even more scale advantages. This virtuous cycle then creates deeper and deeper moats separating itself from competitors.

GROWTH OPPORTUNITIES

Besides just the natural expansion of users purchasing more online and Amazon adding to existing categories, here are some other fertile areas for future growth:

• Amazon Prime (Free shipping membership is driving incremental revenue and usage).
• Kindle (This digital reader is already estimated to account for 35% of Amazon’s book sales and some analysts see $2 billion in Kindle revenues by 2012).
• Zappos.com (This acquisition provides instant dominance in shoes and adjacent product lines).
• International Expansion (Joyco.com acquisition in China is an example of how Amazon is expanding into emerging markets).
• New Categories (There are virtually limitless potential categories, but the migration to digital will be key).
• Cloud Computing, Storage & Other Services (EC2 cloud computing, S3 storage, and other outsourced technology services offer promising opportunities)

TREND IS AMAZON’S FRIEND

Source: U.S. Department of Commerce

E-Commerce sales account for only about 3.6% of total retail sales ($32.4 billion in Q2’09), but as you can see from the chart, the upward sloping trend is the friend of Amazon. With the proliferation of broadband and the natural aging of our next generation of computer-savvy internet users, not only is the number of online shoppers increasing, but the amount of time spent online is escalating as well. If you consider catalog sales (e.g. Land’s End, L.L. Bean, Eddie Bauer, etc.) have represented about 7-8% of total retail sales, there is a lot of head-room left for online sales to catch-up or replace these  sales. Mr. Bezos believes online industry sales can ultimately reach 15% of total retail sales (double catalog sales). Top-rate online franchises like Amazon will be natural beneficiaries of these trends and funnel shoppers through their internet aisles, as a function of these demographic and behavioral tailwinds.

CAPITAL ADVANTAGE

Even when you account for the significantly higher revenue growth rates and growth initiatives (e.g., Kindle, E3, digital, etc) for Amazon relative to Wal-Mart, the capital intensity (as measured by CAPEX/Sales) is still about 70% higher for Wal-Mart as compared to Amazon. For one thing, Amazon does not need to support the some 8,100 stores in 15 countries that Wal-Mart is saddled with, and in turn Amazon can redeploy that capital into areas such as new products, services, and lower delivery costs. Surviving the dot-com bubble bursting, along with paying down billions of debt has afforded Amazon even more capital flexibility.

VALUATION

Valuation can be tricky, especially when you’re talking about a high growth company like Amazon. The exercise becomes a little easier once you realize Amazon is generating about $1.5 billion in free cash flow per year, with $4.3 billion in cash/investments on the balance sheet with virtually no debt in the middle of one of the worst recessions in a generation. At roughly $90 per share, AMZN is trading at over 53x’s Wall Street analysts’ projected earnings of $1.68 for 2009. Jeff Bezos and the rest of the management make it very clear the company is managing their business to one key goal – maximize free cash flow per share (music to my ears – see my article on cash flow). On that basis, AMZN trades at about 25x’s trailing free cash flow and closer to 22x’s if you strip out the $4 billion+ in cash on the balance sheet. If AMZN can grow 15% for the next 5 years (not a given), the valuations just mentioned above could be chopped in half, if price levels and share count remained constant.

With the large run-up in 2009, I have locked in some gains this year, but tactically I will be doing what “Deep Throat” advised in the movie All the President’s Men, and that is to follow the money (cash). If Bezos and Amazon can continue on its current growth trajectory in the coming years, this toddler will mature into a company more closely resembling its cousin Wal-Mart.

Wade S. Slome, CFA, CFP®

Plan. Invest. Prosper.

DISCLOSURE: Sidoxia Capital Management and client accounts do have direct long positions in AMZN and WMT at the time article was originally posted. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC “Contact” page.

Photo: Bill and Melinda Gates Foundation

The collective net worth of the super rich on Forbes’s annual list of the 400 wealthiest Americans fell by $300 billion over the past 12 months, and the tech sector spilled its share of the red ink.

Microsoft’s Bill Gates lost the most — at least on paper. His net worth dropped from $57 to $50 billion, not enough, however, to keep him from topping the list for the 16th year in a row. Two current and former Microsofties were close behind: Paul Allen (No. 17) lost $4.5 billion and Steve Ballmer (No. 14) gave up $1.7 billion.

Other notable losers were Michael Dell (No. 13), down $2.8 billion, and SAS’s James Goodnight (No. 33), off $1.9 billion.

In this company, the $600 million that Apple CEO Steve Jobs lost on paper doesn’t seem so bad. In fact, on the strength of the $5.1 billion he still has, he moved 18 spots up the Forbes 400 list, from No. 61 to No. 43.

Below: The 12 richest tech moguls and their change in net worth. One actually got richer. Can you guess who?

• No. 1. Bill Gates, Microsoft (MSFT): $50 billion, down $7 billion
• No. 3 Larry Ellison, Oracle (ORCL): $27 billion, no change
• No. 11 Sergey Brin, Google (GOOG): $15.3 billion, down $600 million
• No. 11 Larry Page, Google: $15.3 billion, down $500 million
• No. 13 Michael Dell, Dell (DELL): $14.5 billion, down $2.8 billion
• No. 14 Steve Ballmer, Microsoft: $13.3 billion, down $1.7 billion
• No. 17 Paul Allen, Microsoft: $11.5 billion, down $4.5 billion
• No. 28 Jeff Bezos, Amazon (AMZN): $8.8 billion, up $100 million
• No. 33 James Goodnight, SAS Institute: $6.8 billion, down $1.9 billion
• No. 40 Pierre Omidyar, eBay (EBAY): $5.5 billion, down $800 million
• No. 40 Eric Schmidt, Google: $5.5 billion, down $400 million
• No. 43 Steve Jobs, Apple, Pixar (AAPL): $5.1 billion, down $600 million

I had a post scheduled about writing, but that can wait. I went to a rehearsal at Joffrey Tower with The Silverman Group. Baryshnikov was there.

Yes, that Baryshnikov. Yes, he's even more handsome in person.

While I didn’t get a chance to meet him, he was in the rehearsal space below me. Sorry if the title is misleading. I blogged about the experience at The Silverman Group’s blog, but I’d like to expand upon a quote from Baryshnikov himself:

It doesn’t matter how high you lift your leg. The technique is about transparency, simplicity and making an earnest attempt.

I found the quote almost eerie in its application to public relations, especially since two out of the three objectives are thrown around so often. I often compare public relations to dance. It’s an easy comparison for someone who has spent more than a dozen years dancing and with a lifelong love of writing. The comparison is apt. You could be really corny and compare it to a pas de deux, but it still applies to dance as a whole.

Both are an art. Both require you to stay on your toes (ok, that was corny). Both, when done right, really speak to the public and cause change in a way that facts, figures, or numbers cannot.

In the post-Enron world, transparency often means throwing those facts, figures, and numbers at the public in an effort to prove something. But why not combine transparency and simplicity with true communication, as Jeff Bezos did in response to an error:

This is an apology for the way we previously handled illegally sold copies of 1984 and other novels on Kindle. Our “solution” to the problem was stupid, thoughtless, and painfully out of line with our principles. It is wholly self-inflicted, and we deserve the criticism we’ve received. We will use the scar tissue from this painful mistake to help make better decisions going forward, ones that match our mission.

While the words “stupid, thoughtless, and painfully out of line” stand out a bit too much, he had the right idea. The apology was simple, to the point, and made an earnest attempt.

Bravo.

My new MacBook Pro came with a free iPod Touch with the academic discount. (Well, what amounts to the value of an 8GB model anyway–I had to fork out the difference to upgrade to 32GB.) The much touted unibody indeed looks sleek: the edges seem precariously razor-sharp, I get goosebumps when I run my fingers over them; the microphone and LED lights that indicate battery life are mere pinhole perforations, they’re almost invisible; the ON/OFF switch fits snug and flat in its hole, it looks like it was drawn there with a draftsman’s pencil. It looks as clean and keen as IM Pei’s National Gallery (East Wing) at Washington, DC.

Source: Ezra Stoller, The Architect’s Newspaper

This attention to design, perhaps more than its OS X operating system, is the main reason I lean towards Mac. I loved my old 12” Powerbook G4, and did not understand why Apple dropped the size, when, for a time, only 15” and 17” were offered. I did not want to lug a tray around, and almost considered getting the black MacBook. It was a good thing I hung on–the 13” MacBook Pro is exactly what I wanted: sleek, silver, and slim. For a short time, this body type and size was offered as a MacBook. Why Apple did that again boggled me; it only confused/diluted the Pro (Powerbook) brand, and would only alienate customers who bought it before it was upgraded to Pro.

Knock on wood that I don’t dent this unibody. I’m sure Apple would ask a pound of flesh for its repair. This is the problem I have with Apple: when you buy their products, you sign away your soul to the Corporation. They are fiercely proprietary and exclusive, exerting control over the product even after your purchase. I spent $400 to replace the optical drive on my G4 that can only be repaired with original parts in an Apple-certified shop. Customer service wanted me to spend “a bit more” to buy instead a new computer. (This was the time they phased out the 12” model.) No thanks. I didn’t like being bullied into buying. When I wanted to buy the iSight for the G4, they just so happen to have discontinued it to pave way for newer models with built-in camera. Customer service dismissed my complaint by saying that Apple “can’t keep on supporting older models”. My G4 was barely 2-years old at the time. There were no third-party Firewire cameras around, and the prices on used iSight cameras soared at eBay. Appealing to Apple is like talking to a brick wall, the Corporation is as veiled and draconian as a politburo, as self-contained and monolithic as the products they sell.

Take their recent row with Google, for instance, over the Google Voice app. Apple rejected the app because

[it] duplicated the core dialing functionality of the iPhone… [by appearing] to alter the iPhone’s distinctive user experience by replacing the iPhone’s core mobile telephone functionality and Apple user interface with its own user interface for telephone calls, text messaging and voicemail. (The Apple Blog, 21 Sep 2009 and Apple Answers the FCC’s Questions).

What harm is it to me as a consumer to replace the native iPhone interface for a potentially improved one, or revert back if I don’t like the Google Voice product after all? Apple does not seem to have the same problem if I run Microsoft Windows on the Mac; in fact, OS X 10.5 comes bundled with Boot Camp precisely to do this.

It is clear that Apple wants to corner the smartphone market by making their product a self-contained, self-sufficient “experience”–something as ubiquitous as Philip K. Dick’s Ubik, a metonym that stands for everything that can fulfill one’s desires, from consumer products to religious salvation. Why else would they collude with a singular service provider (AT&T, formerly Cingular) and not let different companies compete for the business? This, to me, makes them suspect, and I continue to resist getting an iPhone, buying from iTunes, and enrolling in Genius, precisely because of this. I do not want my “experience” to be governed by a single Corporation.

Friends, this is clean-up time and we’re discounting all our silent, electric Ubiks by this much money. Yes, we’re throwing away the bluebook. And remember: every Ubik on our lot has been used only as directed. (from Ubik, Ch. 1, 1969)

When I synced my spanking new iPod Touch with iTunes for the first time, the first thing it did was to tell me that the operating system needed an upgrade, and that Apple was selling it for $10. What?!? This damn thing just arrived in the mail–the wrappings are still strewn about. Customer service told me that the new OS 3 had not yet been released when my stock shipped from their warehouse (somewhere in China, from the tracking info). I hope the smart people at Apple realize how ridiculous this stock statement sounds to their customers. How in the world could I have known what version of the operating system is installed in the stocks at their warehouse? Well, according to customer service, I need not upgrade to the newer operating system, the old one would do just as well. As a customer, this only left a bad taste in the mouth. It was as if I was sold something OBSOLETE, when I was buying brand new. Apple, however, would not budge; they know they can nickle-and-dime cult members.

I was not aware of the Kindle hoo-ha until I read this piece by Nicholson Baker from the New Yorker: A New Page, Can the Kindle really improve on the book? I was dissuaded before I even considered buying one, and felt sorry for the unfortunate owners. What disturbs me most about this product is that it would put me (i.e. my reading experience) under the mercy of Amazon forever. The text format is not open and non-standard; it can’t even read pdf files–only those that one could buy from Amazon. This in itself raises a red(-white-and-blue) flag of… monopoly! No thanks. I’ve already learned my lesson in dealing with Apple. Second, because only the Kindle device can read this text format, Amazon would have absolute Stalinist control of one’s use and right to the text. This is fine for consumers of chicklit or techno-thrillers who toss the paperbacks after reading. As a true bibliophile, I love the embodiment of books on my shelf (not least because they look sumptuous together), and resist the idea of warehousing them in some virtual space to be accessed by an anemic device. But see, even those who bought the lifeless versions of their magazines and newspapers on Kindle were up in arms when they were swindled access to their purchases on the upgraded devices.

I recently discovered two apps for the iPod Touch that allows me to read books: Classics (free until recently) and Eucalyptus ($10). The latter gives you access to more than 20,000 public domain books in Project Gutenberg–that’s more books than I need for all the flights I will ever take in my lifetime. I don’t have to give Amazon a buck for Moby Dick–it’s free. I can virtually flip the pages too (Classics adds a warm rustling sound); they don’t eerily appear and disappear on me. I tested the reading experience with these apps for what Jeff Bezos’ calls the “flow state”–the ability to get lost in the text that Kindle aims to reproduce. To begin with, such turn of phrase sound like gimmicky self-help mantra than some real idea. (Hear Bezos get excited about it in Charlie Rose. Doesn’t his affected chuckle make him seem sketchy?)

The first ebooks I read were, appropriately enough, Lewis Carroll’s Alice in Wonderland and Through the Looking-Glass, the volumes being slender enough just to test “the flow”. (The metaphor of the looking-glass for the iPod’s touch-screen did not escape me either. How affected!) It was not hard to get lost in the text, owing more perhaps to Carroll’s engaging stories than the whiz-bang of the interface. What I found remarkable was that I can carry books with me in this small thing that fits in my pocket. I can thus take it to lunch, to the bus on the way to the grocery store, to the toilet break, without the extra burden of lugging a hefty tome and looking like an affected bookworm. I can even steal a few pages while waiting for the lab instrument to finish scanning a sample. What’s more–and this is what trumps Kindle–I can listen to the audiobook along with the text. This is particularly helpful with Joyce’s Ulysses, which I am reading at the moment. The rousing performance of Jim Norton makes the work come alive, and adds, not only to the meaning of the text, but to the enjoyment of the reading experience, especially to one who is unfamiliar with the twists and turns of Joyce’s Irish. Ulysses ceases to be the opaque, intimidating, “literary” text it has been made out to be.

In the war for control of the world’s Knowledge (e.g. between Amazon and Google), it is inspiriting to encounter the Eucalyptus reader. It works on the common ASCII text format–it does not claim exclusivity–but presents itself only, truly, as an e-text reader. It is truly in the spirit of the inventor of the movable type, in the way it disseminates and democratizes the text. Amazon, on the other hand, wants to enslave you to their device. (What has Bezos got in his pocketses?) I will stay away from the Kindle like it’s some baleful Elvish ring.

Deutschman’s most recent book isWalk the Walk: The #1 Rule for Real Leaders, and one of America’s leading writers on change, leadership, and innovation. His earlier groundbreaking book, Change or Die: The Three Keys to Change at Work and in Life, debunks various myths and misconceptions about this crucial topic and reveals the surprising truths about what actually inspires and motivates real change. In a 21-year career as a business journalist, Deutschman has been the Silicon Valley correspondent for Fortune, a senior writer at GQ where he wrote the “Profit Motive” column, and a contributing editor at Vanity Fair where he has co-authored the “New Establishment” power list for the past decade. Most recently, he was a senior writer for Fast Company. Deutschman has interviewed and profiled many of the most influential and innovative figures in global business, including Apple’s Steve Jobs, Microsoft’s Bill Gates, Amazon.com’s Jeff Bezos, Google’s Sergey Brin, and Virgin’s Richard Branson, and he has studied the successful turnarounds and change efforts at companies such as Apple, IBM, and Yahoo. In addition to Walk the Walk and Change or Die, his other published books include The Second Coming of Steve Jobs and A Tale of Two Valleys: Wine, Wealth, and the Battle for the Good Life in Napa and Sonoma.

Here is a brief excerpt from my interview of Deutschman. The complete interview is also available.

Morris: In Change or Die, you identify “the three keys to change at work and in life.” For those who have not as yet read the book, what are these “keys” and how can they be used most effectively?

Deutschman: The three keys to change are what I call the “Three Rs” for “relate, repeat, and reframe.” “Relate” means that you form a new emotional relationship with a person or community that inspires and sustains hope. “Repeat” means that this new relationship helps you learn, practice, and master the new habits and skills that you’ll need. And “reframe” means that the new relationship helps you learn new ways of thinking about your situation and your life.

Morris: In your opinion, is it possible to balance what is most important in one’s personal life with what is most important in one’s career?

Deutschman: Yes, I do. And the key is exactly the words that you used: “most important.” Being a leader, whether you’re the CEO leading a huge company or the head of a team with a handful of members, means focusing on the key issues and tasks, not micromanaging. Real leaders have a better chance of making it to their kids’ soccer games.

If you wish to read the complete interview of Deutschman, please contact me at interllect@mindspring.com.

You are encouraged to check out the resources at these Web sites:

http://www.alandeutschman.com/

http://www.leaderswalkthewalk.blogspot.com/

by Alan Deutschman, for BusinessWeek, September 18, 2009.

The best leaders take the same hits as their employees and stick to the primary values they promised to uphold

When Mark Fields became president of Ford Motor’s troubled North American operations in 2005, he quickly announced a turnaround plan called “The Way Forward” that would eliminate 45,000 jobs—more than one-fifth the workforce—and close 14 manufacturing plants. Fields also proposed cutting health-care benefits for the blue-collar workers who remained. He stressed the sense of urgency with his new slogan, “Change or Die,” which he posted on the gates of the factories. As part of his case for change, he told Ford’s employees that they would have to share the sacrifices to save the company.

But Fields himself didn’t share in the sacrifices: For cutting costs so fiercely, Fields was richly rewarded with a $2.3 million bonus that lifted his yearly pay to $5.6 million. Rather than moving to Detroit and becoming a full-fledged member of the community, Fields kept his family in Delray Beach, Fla., and commuted every weekend on the company’s private jet. Is there any wonder no one wanted to follow Mark Fields?…(continue reading)

Palm Pixi v iPhone
Palm’s Pre was heralded as a potential iPhone-killer well ahead of its launch, but in the end it didn’t quite deliver. Its performance was slightly ahead of the iPhone 3G, but lagged behind Apple’s revamped iPhone 3GS (aided in part by Apple’s enhanced iPhone firmware which works on all its smartphones). Then we heard rumors that Palm was working on another webOS phone, but it had possibly been delayed due to poor Pre sales. That phone was codenamed Eos and Pixie, and it’s turned out to be the new Palm Pixi–a candybar phone with much simpler design than the Pre. So much simpler, in fact, that it’s probably fairer to compare the Pixi’s performance to the older iPhone 3G–which is still on sale, and is Pixi’s closest competitor. Pixi’s less capable than the Pre, and priced more cheaply, and it makes even more sense.

Report: Steve Jobs concentrating on tablet (news.cnet.com)

Steve Jobs is Hard at Work on Apple Tablet (shoppingblog.com)

Analyst: iPhone secure against competitors, AT&T not so much (venturebeat.com)