How Amazon (and you) might use its private Wi-Fi network

A report that Amazon has tested a wireless network actually sheds new light on plans by satellite communications company Globalstar to extend the Wi-Fi spectrum.

The extension, if approved by the FCC, would create a new, uncluttered, high-performance Wi-Fi channel in upper reaches of the 2.4-GHz band, a channel Globalstar apparently intends as the basis of a managed service with cellular-like quality and roaming.

Amazon's wireless testing was revealed last week in a Bloomberg news story, "Amazon Is Said to Have Tested a Wireless Network," by Olga Kharif and Danielle Kucera. The tests were run near Amazon's Lab126 research facilities in Cupertino, California, according to Bloomberg's sources. The lab designs Amazon's Kindle devices.

"The trial underlines how Amazon, the world's largest e-commerce company, is moving beyond being a Web destination and hardware maker and digging deeper into the underlying technology for how people connect to the Internet," according to the Bloomberg story. "That would let Amazon create a more comprehensive user experience, encompassing how consumers get online, what device they use to connect to the Web and what they do on the Internet."

But the tests suggest that Amazon doesn't intend or even want to be a traditional wireless network provider. Instead, the online retail giant seems to be exploring the potential of a branded, managed Wi-Fi service that mirrors the features of cellular service: seamless roaming, minimal interference, improved security, and consistent high performance.

amazon
The Bloomberg report notes that the test network used spectrum controlled by satellite communications company Globalstar, based in Milpitas, California. In November 2012, the company petitioned the FCC to allow it to use part of its satellite spectrum to offer terrestrial data services, an offering it dubbed Terrestrial Low Power Service.

TLPS adds a big chunk of new capacity: 22 MHz to the currently available 72 MHz of 2.4 GHz spectrum, according to Jarvinian Wireless Innovation Fund, a Cambridge, Mass., research and investment firm focused on spectrum issues. Jarvinian claims credit for the TLPS idea and the engineering work behind it, and has been working closely with Globalstar.TLPS would essentially add a fourth non-overlapping channel, dubbed Channel 14, to the upper reaches of the 2.4 GHz band used for unlicensed Wi-Fi transmissions. The channel actually would combine Globalstar's adjacent licensed spectrum with a small amount of unlicensed spectrum.

But because this fourth channel is actually licensed to Globalstar, the company plans to use it in something like a wholesale, managed wireless service that would offer greater range and performance than conventional public Wi-Fi hotspots, and be available to end users through carriers or through brands, such as Amazon, operating as virtual network operators.

The Bloomberg story does take note of these plans. "Globalstar is seeking regulatory approval to convert about 80 percent of its spectrum to terrestrial use....Globalstar met with FCC Chairwoman Mignon Clyburn in June, and a decision on whether the company can convert the spectrum could come within months."

If given a green light, "Globalstar is considering leasing its spectrum, sharing service revenues with partners, and other business models, one of the people said. With wireless spectrum scarce, Globalstar's converted spectrum could be of interest to carriers and cable companies, seeking to offload ballooning mobile traffic, as well as to technology companies."

Earlier this year, then-FCC Chairman Julius Genachowski repeated his pledge to continue expanding spectrum in both licensed and unlicensed bands.

In June, Wi-Fi vendor Ruckus Wireless, in Mountain View, California, announced it had completed a round of tests with Globalstar. The trial combined unlicensed spectrum from the upper edge of the 2.4 GHz Industrial Scientific Medical (ISM) band and Globalstar's licensed Mobile Satellite Services (MSS) spectrum. Ruckus used its Smart Wi-Fi brand access points and controllers, targeted at carrier-based Wi-Fi services, and a selection of existing smartphones with built-in Wi-Fi radios that had been given and over-the-air firmware update to run on the new channel.

According to Ruckus, the test showed that the new spectrum could achieve up to five times the range and four times the capacity "over traditional Wi-Fi." Unfortunately, the Ruckus statement was not more specific about the meaning of "traditional Wi-Fi," which could refer to 802.11n or even 802.11g, or about "capacity." Capacity refers to the network's ability to handle larger numbers of users and greater amounts of traffic. [One discussion of Wi-Fi capacity is found in "Aerohive Design & Configuration Guide: High-density Wi-Fi," by Andrew von Nagy, an Aerohive employee.] The increased range is important especially if higher data rates are sustained over those longer distances.

In a June interview posted at EnterpriseNetworkingPlanet.com, Jarvinian Managing Director John Dooley was quoted as saying "Even in an indoor environment made difficult or unusable by spectral congestion, usable connections [in the Ruckus-Globalstar tests] were established at 3-5 times the distance of public WiFi." The tests also showed more uniform high speeds across longer ranges, according to that post.

The Ruckus statement also said the Globalstar test network did not interfere with nearby conventional Wi-Fi networks. That lack of interference is important. In filing its comments on Globalstar's FCC petition, the Consumer Electronics Association argued that "Globalstar's....proposal presents significant risk to unlicensed operations in the 2.4 GHz band and potentially threatens the economic value, consumer benefit, growth, and potential for innovation of those unlicensed operations." Other industry groups have also raised concerns.

But Amazon apparently sees potential in offering its customers, ever more untethered with smartphones and tablets, a premium Wi-Fi experience that's superior to what public Wi-Fi today can offer. 

Amazon improves performance of CloudFormation management platform

Amazon Web Services (AWS) has added new features to the company's management platform CloudFormation that aim to improve performance and simplify updates.

As companies get more used to running applications in the cloud, they are putting together more complex systems. That in turn puts higher demands on management platforms, which have to allow users to take better advantage of the programmability and scalability of the cloud.

CloudFormation aims to give developers and systems administrators a way to create and manage a collection of related resources, provisioning and updating them in an orderly and predictable fashion.

The latest additions to the platform are parallel stack processing and nested stack updates.

The first feature allows CloudFormation to create, update, and delete resources in parallel in order to improve the performance of these operations. For example, provisioning a RAID 0 setup, which involves the creation of multiple Elastic Block Store volumes, is now faster because CloudFormation can provision the volumes in parallel, Amazon said in a blog post.

The platform automatically determines which resources in a template can be created in parallel. Templates are used as a blue print when running CloudFormation to describe the stack of applications and resources needed.

The second new feature, called nested stack updates, deals with how resources are updated. Using CloudFormation, a three-tier application consisting of, for example, a web tier, app tier, and database tier can be created together and in the correct order. With the introduction of nested stack updates, users can also update all the parts in one swoop, instead of having to update each part individually.

Boost for Amazon as Penguin agrees to end Apple e-books deal

Penguin has agreed to terminate its e-book agreement with Apple and to allow Amazon to set its own prices for electronic books in a settlement of a European Union antitrust case.

The European Commission accepted the deal with Penguin on Thursday after more than a year of investigations into allegations of cartel price fixing in the e-book market.

Four other e­book publishers -- Simon & Schuster, HarperCollins, Hachette Livre and Macmillan -- together with Apple were originally included in the investigation, but they agreed to terms with the Commission last December.

The Commission concluded that an infringement had probably taken place when the five publishers and Apple jointly switched from a wholesale model to an agency sale model. Under a wholesale model, the retailer is free to set the price, but with an agency model, the retail price of e­books is determined by the publishers.

It appeared that the alleged cartel wanted to limit retail­price competition, particularly with regard to Amazon, which was the uncontested leader in the retail market for e­books at the time of the change to the agency model, said the Commission.

Like Apple and the other publishers, Penguin has agreed to terminate the current agency agreements and will not hamper e-book retailers, such as Amazon, from setting their own prices for e­books or from offering discounts and promotions for the next two years. Penguin first offered these commitments in April, but they will now become legally binding.

E.U. Competition Commissioner Joaquín Almunia said the deal would restore "a competitive environment in the market for e-books."

Amazon Reports Small Loss as It Focuses on Investments

But with revenue up 22 percent, Amazon showed that it could still deliver the sales growth demanded by investors, who have lifted the company’s stock 21 percent this year. So far, those demands do not include an insistence on big profits.

Until it does, Amazon seems content to pour money into initiatives aimed at gobbling up an increasing share of spending by consumers.

For the quarter that ended June 30, Amazon said it had a net loss of $7 million, or 2 cents a share, compared with net income of $7 million, or a penny a share, in the same period a year earlier. Amazon’s revenue was $15.7 billion, up from $12.83 billion the year before.

The results were slightly below the estimates of analysts surveyed by Thomson Reuters, who expected Amazon to report earnings of 5 cents a share and revenue of $15.73 billion.

The miss did not seem to trouble investors too much. The company’s stock dropped less than 2 percent in after-hours trading after the release of its earnings report.

A good illustration of Amazon’s long-term bets is online video. The company is spending hundreds of millions of dollars on licensing rights to build a large library of video that its customers can watch through their Kindle tablets and other devices. These agreements are critical as movies, music and other media — which account for 28 percent of Amazon’s total sales — shift from physical to digital form.

The company recently cut its biggest such deal ever, with a multiyear agreement to license television shows from Viacom, including children’s shows like “Dora the Explorer” and “SpongeBob SquarePants.”

As a result, Amazon spent almost 47 percent more on technology and content in the quarter, for a total of $1.59 billion — roughly 10 percent of its total revenue. Included in that spending is the company’s investment in Amazon Web Services, a lucrative business through which Amazon rents capacity in its data centers to independent companies.

“We’re investing for the large opportunities we have in front of us,” Tom Szkutak, the company’s chief financial officer, said in a conference call.

While Amazon is feared as a seller of physical goods, it faces several formidable rivals in the digital content business, including Netflix, Apple, Hulu, Microsoft and Google.

Still, Amazon is also spending aggressively on the warehouses it needs to deliver physical goods, building them in locations that have been inching ever closer to big cities with the goal of offering next-day, or even same-day, deliveries to shoppers. This year, Amazon began selling groceries in the Los Angeles area, using its own trucks to shuttle fruit, meat and boxes of cereal from a new warehouse in the city to customers’ doorsteps.

The effort is expensive and risky, though Amazon would not say whether or how much money it was losing on it. The grocery business has killed Internet retailers before — Webvan was the most notable casualty — so Amazon chose not to expand the service beyond a test in Seattle until recently.

“The challenge we’ve had over the past several years is how to make it economically viable,” Mr. Szkutak said.

All the spending on warehouses and other projects has led to a surge in hiring at the company. Its head count swelled to 97,000, up more than 40 percent from 69,000 a year ago. The hiring earned the company a plum position as the backdrop for a speech on middle-class jobs that President Obama is expected to deliver on Tuesday at an Amazon warehouse in Chattanooga, Tenn.

A big part of Amazon’s allure for investors remains its pre-eminent position in e-commerce, which is expected to rise 14.8 percent to $248 billion in American sales this year, according to eMarketer. That is far better growth than the single-digit growth expected for retail sales over all in the United States this year.

Kerry Rice, an analyst at Needham & Company, said investors believed that Amazon could keep stealing market share from Walmart and other physical retailers, and that eventually its profits would improve.

“On some level, I think some people are buying the stock because they’re hoping for that investment cycle to begin to reduce,” Mr. Rice said. “If they pull back on spending, you’re going to see that operating margin tick up.”

Mr. Rice added: “I don’t think that’s going to happen for a long time.” 

Getting the best Amazon deal

Tips, tricks and solutions for your Mac problems

Although I’m the guy others come to for answers, there are times when I have questions of my own. For instance, while discussing beloved movies with a friend I was reminded that I don't own copies of Alfred Hitchcock’s greatest movies. Hoping to remedy that I dashed to Amazon and found Alfred Hitchcock: The Master piece Collection [Blu-ray], which includes the greatest hits of Hitchcock’s later work. The collection looked great, but the price did not—$178.96 as I write this.

Reviews indicate that the collection has been sold for as little as $120—a price I would be willing to spring for. But how am I to know when it becomes available at such a discounted price? I turned to Twitter for answers.

Follower John Coxon (@johncoxon) told me about camelcamelcamel. This Web-based service allows you to enter the URL for the item you wish to track. You can then view a history of the item’s price to get a ballpark idea of how low it’s been priced in the past. Then just enter the price you’re willing to pay ($120, in my case) and choose how you wish to be alerted—via email or Twitter.

The camelcamelcamel site tracks the Hitchcock Blu-ray collection
Mike Hoffman (@MikeHoffman) pointed me to Delite Studio’s free Mac application Price Drop Monitor For Amazon. Download and install it and a shopping cart icon appears in the Mac’s menu bar. In your Web browser just navigate to the item you eventually wish to purchase and drag its URL to this menu bar icon. It will be added to a list of watched items. When the price of a watched item drops you’ll be notified (you can choose from among a sound, notification center, Growl, and email). To track more than 20 items you must pay $3.99 for monitoring of up to 50 items at a time.

Both Chris Lehmkuhl (@ChrisLehmkuhl) and Dave Packard (@cpadave) informed me that all I had to do is add the item to my cart and leave it there, unpurchased. When the price changes you'll see a notification in your Amazon shopping cart.

And finally, I have a solution of my own. With Safari go to the item’s Amazon page and choose File > Open in Dashboard. This is the means for creating a Web clipping. Select the item’s price area and click Add. That clipping will appear in Dashboard. Because Dashboard clippings update whenever you switch to Dashboard, all you need to do is invoke Dashboard to view the item’s current price.

Apple looks to pick off engineers from Amazon and OpenStack

Apple is on the hunt for cloud infrastructure engineers familiar with building large-scale deployments like those at Amazon Web Services and OpenStack companies, according to a job posting.

The eventual hire will work to "build the next generation infrastructure" to support iCloud, iTunes and other Apple Internet services, the company says. Silicon Valley tech firms pick off employees from competitors all the time, but this job posting points to the emphasis companies like Apple are putting on recruiting experts in the cloud computing field.

The alert calls for an engineer to work on the Apple Site Reliability Engineering Team who will develop standards to automate application development, cluster management, network routes and manage petabytes of storage for "amazing applications that serve millions of customers."

In addition to experience with Amazon Web Services which runs the biggest public cloud in the market Apple is also looking for developers who are familiar with the open source cloud platform OpenStack, and the private cloud open source system Eucalyptus. It's also looking for system administrators who are familiar with automation tools like Puppet, the posting says. From the details of the job posting, it appears Apple is looking for workers to help the company build out its own cloud services and not expertise in using other competitor's cloud.

"We're a small team focused on the development of standards-based software defined data centers and networks at global scale," according to the posting on Apple's web site. "We're looking for candidates with a strong background in system administration and deep experience with IaaS to bootstrap the operational support of these services."

Bits Blog: Amazon Rejected as Domain Name After South American Objections

Mauricio Lima for The New York Times A group of Latin American countries, including Brazil, Argentina, Chile, Peru and Uruguay, argued that the “.amazon” domain was too intrinsically connected to the regions and communities within their borders to allow the online retailer access to use it.

  A group of Latin American countries appears to have succeeded in an effort to block Amazon, the online retailer, from using .amazon as a new suffix for Internet addresses.

A committee of the Internet Corporation for Assigned Names and Numbers, an international governance group for the Internet, recommended this week that. amazon not be approved for use as a so-called global top-level domain — the letters that follow the dot in Internet addresses.

At a meeting in Durban, South Africa, Icann reviewed applications for new domain suffixes like these in what has been billed as the biggest expansion of Internet addresses. Scores of companies, countries and organizations have applied to use their names or other terms as global top-level domains, alongside the handful of existing ones like .com and .org.

While Icann has approved several new dot-terms, including the Chinese word for game and the Russian word for network, English-language brand names derived from geographical locations have proved to be more complicated.

In the run-up to the Durban meeting, a group of Latin American countries, including Brazil, Argentina, Chile, Peru and Uruguay, sent a letter to Icann, in which they argued that .amazon should be rejected because a river runs through it.

“In particular ‘.amazon’ is a geographic name that represents important territories of some of our countries, which have relevant communities, with their own culture and identity directly connected with the name,” the letter said. “Beyond the specifics, this should also be understood as a matter of principle.”

The group had also objected to another application, from the outdoor clothier Patagonia, to use its name as an address suffix. That application was withdrawn before the Durban meeting.

The decision on. amazon, by the Governmental Advisory Committee of Icann, is not necessarily final. The Icann board could overrule the committee, though in practice it rarely does so.

“We’re reviewing the G.A.C. advice and we look forward to working with Icann and other stakeholders to resolve these issues as the process moves forward,” Amazon said in a statement.

One thing that remains unclear is why the United States government, represented in the Government Advisory Committee by the National Telecommunications and Information Administration, an arm of the Commerce Department, went along with the decision.

The administration did not immediately respond to a request for comment. Before the meeting, it sent a letter to Icann in which it outlined its support for the use of names like. amazon as Internet suffixes, but added that it would stand aside if other governments objected.

“The United States affirms our support for the free flow of information and freedom of expression and does not view sovereignty as a valid basis for objecting to the use of terms, and we have concerns about the effect of such claims on the integrity of the process,” the administration said in the letter. “However, in the event the parties cannot reach agreement by the time this matter comes up for decision in the G.A.C., the United States is willing in Durban to abstain and remain neutral.”

One analyst said that while the specific reasons the United States government went along with the rejection were unclear, its position on Internet governance issues had been weakened by the recent leaks of information about a vast digital surveillance program by the National Security Agency. Several countries in South America — though not those in the Amazon basin or the Patagonian region — have offered the leaker, Edward J. Snowden, asylum.

“It is clear that the leaks of sensitive national security information have severely weakened the U.S. government’s ability to fight for our economic interests and have left the U.S. isolated in the G.A.C.,” said Nao Matsukata, chief executive of FairWinds Partners, a Washington-based consulting firm that specializes in domain name strategy.

Milton Mueller, a professor at the Syracuse University School of Information Studies, said there might have been an element of horse-trading. By yielding to a broader consensus on the advisory committee, Washington could have been seeking to shore up broader support for Icann, whose control over the Internet address system has long irked the governments of countries like Russia and China.

“My hypothesis is that the U.S. government has been scared to death for some time that if G.A.C. doesn’t get enough of what it wants, governments will give up on the whole Icann regime,” Mr. Mueller said.

E-Book Ruling Gives Amazon an Advantage

A federal judge ruled on Wednesday that Apple had illegally conspired with five of the six biggest publishers to try to raise prices in the budding e-books market.

The decision came two days after Barnes & Noble lost its chief executive and said it would not appoint another, signaling that the biggest chain of physical bookstores could be immediately broken up.

The verdict in the Apple case might have been a foregone conclusion, telegraphed by the judge herself, but it emphatically underlined how the traditional players in the book business have been upended. Only Amazon, led by Mr. Bezos, seems to have a plan. He is executing it with a skill that infuriates his competitors and rewards his stockholders.

“We’re at a moment when cultural power is passing to new gatekeepers,” said Joe Esposito, a publishing consultant. “Heaven forbid that we should have the government telling our entrepreneurs what to do, but there is a social policy issue here. We don’t want the companies to become a black hole that absorbs all light except their own.”

The Apple case, which was brought by the Justice Department, will have little immediate impact on the selling of books. The publishers settled long ago, protesting they had done nothing wrong but saying they could not afford to fight the government. But it might be a long time before they try to take charge of their fate again in such a bold fashion. Drawing the attention of the government once was bad enough; twice could be a disaster.

“The Department of Justice has unwittingly caused further consolidation in the industry at a time when consolidation is not necessarily a good thing,” said Mark Coker, the chief executive of Smashwords, an e-book distributor. “If you want a vibrant ecosystem of multiple publishers, multiple publishing methods and multiple successful retailers in 5, 20 or 50 years, we took a step backwards this week.”

Some in publishing suspected that Amazon had prompted the government to file its suit. The retailer has denied it, but it still emerged the big winner. While Apple will be punished — damages are yet to be decided — and the publishers were chastened, Amazon is left free to exert its dominance over e-books — even as it gains market share with physical books. The retailer declined to comment on Wednesday.

“Amazon is not in most of the headlines, but all of the big events in the book world are about Amazon,” said Paul Aiken, executive director of the Authors Guild. “If the publishers colluded, it was to blunt Amazon’s dominance. Barnes & Noble’s troubles may stem from a misstep with its Nook tablets, just as Borders’ bankruptcy might have been hastened by management mistakes, but its precarious position is that of any rent-paying retailer facing a deep-pocketed virtual competitor.”

Last week, Penguin and Random House officially merged, creating a publishing behemoth that might be able to determine its future rather than suffer the fate of Barnes & Noble, a once-swaggering entity that now seems adrift. Random House was not a target of the Justice Department; Penguin was.

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

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

This was not a prospect that many on Wednesday were putting much faith in.

Amazon, its detractors argue, is not a nonprofit or public trust but a hard-nosed company whose investors hope will make lots of money someday soon. It shares closed Wednesday at $292.33, a record.

“The Justice Department’s guns seem pointed in the wrong direction,” Mr. Aiken said.

But the more pressing concern for the industry is the fate of Barnes & Noble. When Borders collapsed two years ago, analysts said there was an unexpected consequence to the loss of 400 stores: the e-book growth rate began to taper off, as readers could no longer examine new titles before ordering them from Amazon.

E-books, in other words, were not a magical technology that could shed all the existing infrastructure of publishing. They needed the existing ecosystem.

“If all of those corporate outlets vanish, there is suddenly a hell of a lot less space devoted to showcasing a large number of titles,” said J. B. Dickey, owner of the Seattle Mystery Bookshop. “We’ll probably see a continuing shrinking in print runs, maybe fewer titles published, fewer authors published and the New York houses retreating into the known best-sellers. Which means more novice and midlist authors scrambling to find a way to stay in print and more authors self-publishing their print books — or more likely releasing their works as e-files.”

All of that sounds dire. Perhaps the only consolation for those who fear the power of Amazon is the knowledge that all companies eventually peak, no matter how unlikely that seems when they are in the ascendance.

Mr. Esposito, the consultant, remembered that 30 years ago there was a book called “The Media Monopoly,” which worried about the excessive power of the Gannett chain of newspapers as well as the three major television networks.

“The book reads almost quaint now,” Mr. Esposito said.

Amazon Adds 'Pulp Fiction,' 'Good Will Hunting' to Instant Video

John Travolta and Uma Thurman in "Pulp Fiction"
Amazon has added additional movies from Miramax to its Prime Instant Video library, via a new licensing deal.

The new movies available to Amazon Prime subscribers include Pulp Fiction, Good Will Hunting, Life Is Beautiful and The English Patient.

STORY: Amazon, Viacom Ink Multiyear Licensing Deal

Amazon Prime Instant Video allows users to stream movies and TV shows to their computer, mobile device or TV, using a console like PlayStation 3 or Xbox 360. The service costs $79 a year.

Amazon has been trying to boost their instant video offerings to compete with Netflix and other subscription streaming services. It recently inked a deal to carry Viacom TV shows that were formerly available on Netflix, including popular series like Dora the Explorer and SpongeBob SquarePants. And the company previously snagged exclusive rights to Downton Abbey and CBS' Under the Dome.

Miramax, meanwhile, has been trying to monetize its film library, which contains more than 700 titles. New chairman Thomas Barrack recently told The Hollywood Reporter that the company would also be interested in acquiring other libraries and returning to producing its own TV series and movies.

Twitter: @sajilpl

Bits Blog: The Price of Amazon

Jeff Swensen for The New York Times Jim Hollock’s first book, “Born to Lose,” has been losing momentum, yet Amazon has increased the price by nearly a third.
The Amazon.com story is remarkable. Within living memory, bookselling was a local activity. A major city would have two or three large independent stores selling new books and other large, scruffier stores selling secondhand books. Paperbacks would receive wide if uneven circulation on bus station and drugstore racks. It was not a perfect system, but it had the advantage of being diffuse and thus hard to control. The hippie, black and women’s movements of the 1960s would not have been so successful in challenging authority without the bookstores, which made their ideas widely available and sympathetic in a way that television, for instance, did not.

That transmission system has now been largely dismantled, killed by high rents and new technology. With little discussion, Amazon has skillfully absorbed a large part of the book trade. It sells about one in four new books, and the vast number of independent sellers on its site increases its market share even more. It owns as a separate entity the largest secondhand book network, Abebooks. And of course it has a majority of the e-book market.

The company is a marvel in many ways. You can get almost any print book you want, by the end of the week! And Amazon will pay the postage! For book lovers, it was a dream come true. Amazon presents itself as less a company and more a public utility. One of its greatest accomplishments is the way it has made the future of bookselling seem as if it will inevitably be owned by Amazon.

One consequence of this shift is that soon no one will know what a book’s “real” price is. Price will be determined by demand and perhaps by whim. The first seeds of this can be seen in the Justice Department’s suit against the leading publishers, who felt that Amazon was pricing their e-books so low that it threatened their viability. The government accused the publishers of colluding to raise prices in an anti-consumer move. Amazon was not a party to the case, but it emerged the big winner.

Perhaps as a result, the question of how Amazon prices books is now a radioactive topic with some publishers. While reporting my article in Friday’s New York Times, I tried to ask the University of Chicago Press why Amazon seemed to be cutting discounts on its books, effectively making them more expensive and thus possibly less salable. Laura Avey, promotions manager, replied: “This just isn’t something that anyone here is going to be able to comment on. Pricing questions involve proprietary information, and we just aren’t able to share that.”

One of the few publishers willing to speak his mind about Amazon is Dennis Loy Johnson, proprietor of the Melville House, one of the most interesting new presses since its founding in 2001. Melville had an immediate hit last month with a rediscovered article by James Agee, “Cotton Tenants.” But as sales slow in the days since publication, Amazon is charging more for it.

The price-tracking site camelcamelcamel shows “Cotton Tenants,” which lists for $24.95, moving from $16 on Amazon shortly after publication to $19.79 last week before falling back slightly to the current $19.23. If you were a few weeks late getting the news about “Cotton Tenants,” you paid 20 percent more.

But it is still cheaper than the neighborhood bookstore, assuming of course there is one left. Right?

“I don’t like the fact that there’s one retailer able to so massively underprice other retailers, especially in a business that so desperately needs more retailers,” Mr. Johnson said. “And I don’t like the inconsistency of the pricing, either — the raising, the lowering — because it sends a confusing message that good books are worth less, and because it encourages buying based on something other than the quality of the book. It’s just an unhealthy business if people are buying a thing mostly because of its price, not its quality. That’s how you sell widgets, not books.”

“Discounting, and especially inconsistent or shifting discounting, really messes with a publisher’s ability to price a book fairly and accurately to its cost,” he added. “You have to consider the fact that whatever price you put on the cover, Amazon is going to reduce it by as much as half — unless they don’t — or they may, but only for a while. But in short they’re going to make your book look like a thing with a cost lower than the one you placed on it.

“So do you raise the price, knowing they’re going to lower it, so that the price will then appear closer to what you need it to be? But if you do that then you’re screwing the more honest retailers who can’t discount. And we’ve gotten a long way from recognition of the fact that publishers have costs in making books, and that should have something to do with the price.”

Follow me on Twitter @sajilpl

First 'Despicable Me' No. 1 on iTunes, Amazon

Steve Carell's Gru and his adorable minions aren't just taking over the box office, where Universal's Despicable Me 2 grossed $34.3 million on Wednesday.

The animated characters are also dominating digital downloads on iTunes, Amazon and Google's Play store.

The first Despicable Me movie is the No. 1 movie download on iTunes and Amazon as of Friday morning. The film is available to rent (starting at $2.99) and buy ($9.99) on both sites. The first movie is also the No. 9 rented title on Google Play ($2.99).

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Minion Madness, a 12-minute collection of mini movies about the minions is also making noise on the charts, landing at No. 14 on Google Play, No. 33 on iTunes and No. 75 on Amazon. Despite its higher placement on the Google Play chart, it costs $4.99 to buy there and $3.99 on iTunes and Amazon.

The Despicable Me game is also the top free iPhone app and No. 5 on Google Play's list of free Android apps.

STORY: 'Despicable Me 2': 5 Things to Know About the Minions

Meanwhile, preorders for the second film have already begun in earnest, with these advanced purchases putting Despicable Me 2 at No. 18 on Amazon's list of best-selling DVDs (where the first film is also No. 1) and No. 73 on iTunes' list of top movies.

iTunes features a Despicable Me 2 promotion on its main page, and Amazon has a promo on the main page for its Instant Video offerings.

Amazon Patents 'DVD Extras' for E-Books

As far as media delivery goes, e-books are pretty flat. You get the book and maybe some notes or background info from the publisher, and that’s pretty much it.

That’s not good enough for Amazon. The company was just awarded a patent, which it originally applied for on November 24, 2010, describing a way to enhance your electronic reading experience with more personalized content — not just from publishers, but from your friends as well.

The online retailer was granted a patent today outlining a “Customized Electronic Book with Supplemental Content” (Patent #8478662). It describes a way to enhance Kindle e-books by tacking on supplemental material provided by publishers or reputable sources. The e-books would be personalized by adding additional content within the specific interests of individual readers, or reader types. So, you could be reading A Game of Thrones and an additional story line or illustration (for example, a map) could be accessed from within the book, sort of like a DVD extra.

The additional material could come from the publisher, or from “trusted contributors.” For example, a book that has been made into a TV series or movie could have additional story lines from those mediums, and this would allow the rights-holder to add them to the book. And while fan fiction writers would have a field day adding additional story to their favorite books, readers will only see suggestions about that additional content if they follow the creator of the extra material — either as an Amazon author or contributor, via a friend relationship on social media, or if the reader has expressed interest in similar content created by similar contributors.

In other words, you’re not going to be served random Brony fan fiction in your copy of Black Beauty. Unless you’re down with that.


Fan-fic aside, this could be a great way for educators to add additional content to texts. A teacher could annotate an assigned bit of textbook reading or a piece of literature with notes that their entire class can access. Or, an expert in a field of study could add notes to a textbook that puts the material in a new perspective.
The patent outlines a way to manage this extra content via a multi-level e-book framework to be built by Amazon. The core content would live on one portion of the framework while secondary content would be added to other portions. Only the extra content relevant to your interests would be delivered to your copy of the e-book.

According to the patent, “content providers are looking for ways to enhance an individual’s experience when reading a media item.” If this is true, be on the lookout for enhanced e-books in the future from Amazon’s Kindle store.

Joyent targets Amazon, Google by blending compute/storage services

Cloud computing provider Joyent, a company with robust engineering chops that's looking to compete with the heavyweights of the industry, today rolled out Manta, its newest service that offers object storage with baked in compute features.

 

Combining compute and storage into one offering allows processing and data analytics jobs to be done without the need to transfer data from a storage system into a compute engine, speeding the time to process the transaction and creating a more efficient process.

 

Joyent engineers are no strangers to shaking up the cloud industry. Under the radar of even some in the cloud community, the company has developed its own SmartOS infrastructure stack, which includes an open source in-memory hypervisor. Joyent sells its SmartDataCenter as a public cloud IaaS option, or for users to install on their own premises.

 

CTO Jason Hoffman says Manta is the next logical iteration of the company's products. "This completes our platform," he says, after working on the project for about four years, internally using it for the last year and running a six-month multi-petabyte beta project on it with some of Joyent's largest customers.

 

Gartner analyst Henry Baltazar says the key to Manta is the ability to run compute jobs without having to extract, transform and load (ETL) the data from object storage into compute servers. In traditional formats, the object storage is meant for the retention of data, but if some sort of processing is needed to be done on it, then a copy of the data is usually made and then transferred to make it accessible to the compute services. "You avoid the transformation and migration of the data because it's already sitting with the compute," he says.It's ideal, he says, for archival of data heavy information that may need some sort of processing done to it. Joyent specifically lists use cases such as video and image coding and reformatting, data analytics and log processing.

 

Customer Konstantin Gredeskoul, who is CTO of Wanelo, an online retail community, is already raving about it after using it as part of the beta. The company hosts a website for about 8 million users that has more than 6 million products from more than 200,000 stores that shoppers can browse, search and then be sent to other websites to buy from. During the past few months, Wanelo has been using Manta to storage log files of everything that happens on the company's website each day - what items people view, which are purchased and how they rated products. Storing those files in Manta allows commands to be run directly on the data.

 

Gredeskoul is currently using Amazon Web Services Simple Storage Service (S3) as its back-end repository for all of Wanelo's images, but he hopes to migrate those over to Joyent's Manta service. If there's ever a point when Gredeskoul needs to convert petabytes worth of images from one format to another, that process could be done directly within Manta. On AWS, he would have likely had to make a copy of the files, transfer or copy it into Elastic Compute Cloud (EC2) or another compute service like Elastic MapReduce (EMR), run the processing job, then transfer it back into storage. Hoffman says Manta is like having AWS's EC2 and S3 baked into a single offering.

 

Gartner's Baltazar, says Manta is part of a larger wave of converging storage and compute into single systems, but he says it's one of the first large-scale cloud offerings in the category. Other providers like Simplivity and Nutanix offer customers so-called data centers in a box, which have compute, storage and networking functionality baked into a single system, which is usually run on customer premises. Baltazar calls this the "big squeeze" of infrastructure.

 

Joyent could kick off this wave for cloud providers to do the same. Already Amazon has a variety of storage options, between S3, Elastic Block Storage (EBS), its RedShift data warehousing service and Glacier, which is a long-term cold storage option that is cheap to write into and slow to retrieve information from. Amazon offers analytics services on top of such storage options, but they're not architected to be baked into the storage services as Joyent's is. Google has its Hadoop-like BigQuery data processing cloud-based service, which is an adjacent offering to its application development PaaS and Compute Engine IaaS.

 

Manta is generally available starting today. Prices start at $0.043 per GB of storage, up to the first 1 TB, with volume discounts applied after that. Joyent's default setting is to make two companies of all data. Compute service is priced by the second at $0.00004/GB of DRAM.

 

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