The term “e-commerce” still lacks a universally valid definition, but even if you just bundle B2B and B2C transactions under it, it’s a multi-trillion dollar business globally. Last year, Nielsen found [PDF] 86% of the global web population made an online purchase already (North America: 92%). For the US alone, B2C sales are expected to grow from $130 billion this year to over $200 billion by 2013 (excluding travel).

In North America, Amazon is the 800-pound gorilla in the B2C arena - by very, very far. After the US launch in 1995, the company quickly established separate websites in Canada, the United Kingdom, Germany, France, China, and Japan. But although Amazon wins in Canada and Europe, things are not going as well in Asia. In China (where Amazon started offering a localized site in 2004), it practically gets destroyed by local player Taobao [CN]. Traffic-wise, Amazon gets dwarfed by a local e-commerce site in Japan, too: Rakuten [JP].

Amazon is active in Japan for a good reason: In its last report [JP, PDF], the Japanese government said the country’s online B2C sector grew by 21.7% to over $55 billion in 2007 on a year-on-year basis. (Note: Statistics from different sources can vary widely because of totally different methods of measurement. The Japanese numbers, for examples, do include travel.)

Now it seems Rakuten wants to take its global plans (laid out numerous times in the past) to the next level, with CEO Hiroshi Mikitani saying just this weekend he wants to see his company generating $1 million in daily sales outside Japan by the end of this year.

This short case study tries to shed light on Rakuten’s background and key success factors, why they win against Amazon in Japan and what efforts they make to go global.

Before everyone gets in a huff, let’s consider Amazon’s intentions with these patent applications. Surely they would never allow advertisements to be placed in books which you have purchased legitimately at full price, so let’s put that out of our heads. But what if you could take a few bucks off the cover price at the cost of a few contextual ads relating (if possible) to the book’s content? Personally, I wouldn’t mind — partially because I don’t use a Kindle or intend to any time soon, but more because it’s a no-lose situation. Amazon wouldn’t risk alienating its loyal Kindle base with dirty tricks like this, so it’s safe to assume it’ll be at least somewhat opt-in.

An abundance of free or reduced-price content would widen the appeal of the reader — I imagine many people are put off e-books by the idea that they are not getting their money’s worth. As offensive as the idea of inserting ads into a book is to me (and surely to the average reader), it’s almost certainly part of a value proposition which increases the utility of these expensive little buggers.

Does embattled music streaming site imeem think it can take on iTunes? For the most part, nearly every streaming song on the site has a download button which links to both iTunes and the Amazon MP3 store. But it is quietly testing its own music download store which bypasses iTunes and Amazon and sells MP3s directly. For instance, this is the case with some Sub Pop artists, such as Iron and Wine and The Shins. When you hit the download button on songs for those artists, a window pops up showing the album where that song came from with with the option to download the entire album or any individual song for $0.99. You can then pay imeem directly by credit card or Paypal and download the song to your computer.

(Screenshots after the jump).

We’ve received numerous reports of Amazon Associate members in North Carolina receiving emails stating that Amazon is going to have to discontinue the service there due to a pending change the in state’s tax structure. Sometime in the next two weeks, Amazon expects that it will be terminating the service for all North Carolina residents. That will be very bad news for a lot of people who rely on Amazon’s popular affiliate sales program as a source of income.

Here’s the full email:

So this isn’t new, it’s actually been available since late 2007 as far as I can tell, but enough people are tweeting about it today, that’s it’s worth mentioning again. Amazon has a page where you can download the Kindle’s source code.

What is new today is that the Kindle DX, its new larger reader, has also been added to the mix of downloadable code. And you can also download the code to all the previous firmware version of both the first and second generation Kindles.

Google’s book settlement with the Author’s Guild has drawn an unusual number of critics and an antitrust investigation by the Department of Justice. Amazon CEO Jefrey Bezos doesn’t like it either.

Asked about the settlement onstage today at Wired’s Disruptive By Design Conference, Bezos replied:

That settlement in our opinion needs to be revisited. It doesn’t seem right that you should kind of get a prize for violating a large series of copyrights. The class action settlement law . . . , you can’t believe that is the way it actually works.

Back at the height of the dotcom bubble, Amazon was signing lucrative deals with traditional retailers to be their online store. One of the biggest such deals was with Toys “R” Us. It was announced with much fanfare in 2000 and was supposed to last a decade. Toys “R” US would handle the toy buying and inventory management, Amazon would handle the Website.

It made sense until, oh, about 2004, when Toys “R” us filed a lawsuit for breach of contract. While Amazon was perfectly happy to be the exclusive online presence for Toys “R” Us, it didn’t feel that it had agreed to make Toys “R” Us the exclusive of provider of toys on Amazon. A New Jersey court ruled in favor of Toys “R” Us back in 2006. But only yesterday did Amazon finally settle with Toys “R” Us, agreeing to pay $51 million.

Another month, another version of the Kindle. I’ve been using a Kindle since it was shaped like a very thin doorstop and I’m delighted each time I see a new version. The latest version is the DX, a monstrous 9-inch version of the smaller Kindle 2 that supports direct PDF reading without conversion.

Why am I interested in the Kindle? Well, I already have a first-gen Kindle so I’m not too keen on upgrading immediately. But I’ve been waiting for Amazon to solve something with the Kindle DX that has been nagging me for quite a while. You see, I have a problem. I don’t want to read the New York Times on paper anymore but paper seems like the only logical way to read it. Reading the newspaper on a gadget is rude and dangerous - especially with toddlers around the house. It’s a tough sell to have a gadget at the breakfast table. But then I know that I’ll never read it on the desktop whether through the Times Reader or any other source. So the DX sounded great. It has all of the features of the current Kindle plus rotational sensing and a beautiful, huge screen that might just fit the entire NYT front page and not just one article. So that’s why I wanted to see the DX.

As a Kindle owner, I love the fact that Amazon released an iPhone app to allow me to continue reading my content even when I don’t have the actual Kindle with me. Of course, the experience of reading on the iPhone’s much smaller and back-lit screen is worse than on the Kindle, but Amazon has made it a bit better with the new update it just rolled out.

The new 1.1 version of the Kindle app [iTunes link] allows users to read in either portrait or landscape mode. You can also now switch between different background color/text color combinations to make reading easier on the eyes. And turning pages is now easier with tap support and you can now use the multi-touch pinch to zoom in on images. Basically, Amazon has iPhone-ified the Kindle experience.

Amazon’s new blog publishing program has a major flaw: it lets anyone steal other people’s blogs and charge readers for them.

Yesterday, Amazon opened up the ability to publish a blog on the Kindle to anyone who sets up an account. Today, anyone can claim a blog even if it is not theirs, charge a subscription fee for it, and collect the proceeds. In fact, somebody already did just this with TechCrunch.

If you search for “TechCrunch” in the Kindle store, the top result is our official blog for the Kindle, which you can subscribe to for $1.99 a month. Right under it is another official-looking TechCrunch blog, which in fact serves up our feed and also costs $1.99, but we don’t see a cent of that money.

One of the neat little sub-features of Amazon’s Kindle is being able to subscribe to blogs on it. You have to pay for the privilege, but for heavy Kindle users, it makes sense as you can get the content delivered to you wirelessly for your favorite blogs. You know, like TechCrunch.

But the biggest limiting factor of this so far is that only the big blogs have been included in the blog directory. Starting today, anyone can make their blogs available via the new Kindle Publishing for Blogs Beta program.

Amazon releasing a Kindle iPhone app shortly after the introduction of the Kindle 2 was a brilliant move. It seemed to show that the emphasis was on the platform, not just one device. And that it was interested in making its customers happy. Unfortunately, to use the Kindle iPhone app, you still basically had to set your iPhone down and buy books on either your Kindle or the Amazon website. Sure, you could browse to it from the Safari browser on the iPhone, but the experience was laborious to say the least. Today, Amazon changed that a bit, and it may be an indication of where it’s going.

Now, when you click on the “Get Books” icon in the iPhone app, you’re taken to a page that has a very iPhone-friendly Kindle book browser. From here you can search the over 280,000 Kindle books or browse by things like category, New York Times Best Sellers or books recommended for you. Unfortunately, clicking on any of these items kicks you out of the iPhone app and into Safari, where you actually do your surfing/purchasing (again, in this new iPhone-friendly look). That simply appears to be a limitation of the Kindle iPhone app itself (which wasn’t updated, just the look of the Kindle iPhone website was), and it seems likely that Amazon will correct that soon so you can browse and buy right from within the app.

Earlier this week, we got our first glimpse of the Kindle DX, Amazon’s upcoming E-book reader that has taken the original Kindle’s nearly prohibitive $359 price tag and bumped it up to an even more exorbitant $489 for good measure. Granted, the DX has one major improvement: a bigger screen that makes it suitable for textbooks, professional journal articles, and even newspapers. I’ve spent the last few days mulling over the future prospects of the new device, and up until a few hours ago my forecast was looking pretty grim. But then a lightbulb went off over my head: pirates are going to save the Kindle DX.

But before I get to that, let’s address why the Kindle DX is poised to fail.

The Newspaper Strategy

Three major newspapers have banded together for an experimental trial run on the Kindle DX, offering cheaper long-term subscriptions to customers in return for the fact that their distribution costs will be next to nothing. The newspaper angle might be attractive for a few people, but I’m not convinced that it’s actually going to sell many Kindle DX’s - at least, not without the newspapers subsidizing the device’s cost as part of a subscription plan. Over $500 after taxes, plus paying for the newspaper subscriptions themselves, for convenient accesss to content that is already available for free online? I just don’t see it happening.

Yesterday, Amazon launched its larger-format Kindle DX with a built-in PDF reader and partnership deals with textbook and newspaper companies. Today, Wall Street analysts are weighing in on what kind of impact the DX might have on Amazon’s numbers. Barclay Capital’s Doug Anmuth estimates that the DX alone could add $800 million in revenues and $100 million in gross profits in 2012. Total Kindle revenues in that year for both the smaller Kindle 2 and the Kindle DX will be be $3.7 billion, he estimates, with gross profits of $840 million. In three years time, he thinks the Kindle will represent more than 10 percent of both Amazon’s sales and gross profits (for perspective, last year Amazon reported $19 billion in sales and $4.3 billion in gross profits).

Meanwhile, Citi analyst Mark Mahaney for now is sticking with his 2010 projection of $1.2 billion in Kindle sales, which would account for over 4 percent of the total—that is next year. Mahaney isn’t going out further than that yet, but he may soon “up that estimate a bit,” he wrote in a note this morning. Why? One reason is because Amazon CEO Jeff Bezos threw out a tantalizing detail yesterday about the Kindle’s growing traction: For the books available on the Kindle, unit sales are tracking at 35 percent the level of the same titles in print, up from 13 percent in February.

Mahaney estimates that the Kindle already accounts for “about 10% of total North American book units,” or or 4 million books sold during the first quarter out of a total of 38 million books, he tells me.

On January 23, Amazon secured the domain kindledx.com, anticipating the launch of its new product today, the Kindle DX. Given all the hoopla surrounding today’s event, you’d think Amazon would have thought to point the domain to the Kindle DX pre-order page — or at the very least, to the Kindle page, or even any page whatsoever. Instead, it’s a dead link.

Amazon, which also owns kindle.com, points that domain to the page where you can buy the Kindle. I’m sure Amazon will eventually get around to doing it with its new product, but it may have been wise to do it on a day when the hype and demand are at their peak.

The most startling thing Jeff Bezos said today at Amazon’s launch of the Kindle DX, it’s large-format Kindle optimized for textbooks and newspapers, was this statistic: For books that are available on the Kindle, sales are already 35 percent of the same books in print, up from 13 percent just a few months ago. In other words, if a paper book sells 10,000 copies on Amazon, it will sell an additional 3,500 digital copies on the Kindle. Let me repeat that, digital books via the Kindle are selling at 35 percent the level of physical books 18 months after launch.

That is an amazing ramp up. The Kindle now has 275,000 titles, most of them are the “head” titles that most likely make up the bulk of Amazon’s total book sales. So how much of Amazon’s book sales are now digital? I tried to ask a few Amazon execs here at the press conference, but they won’t say. It is no doubt a huge number. Amazon sells $2.7 billion worth of “media” every quarter, which includes books, music, and movies. Books is still one of its largest categories, if not the largest. Let’s say Amazon sells $1 billion worth of books every quarter. And its top 275,000 titles represent 80 percent of sales. Kindle book sales alone would amount to $280 million ($1.1 billion a year), and that would not include the cost of the device.

Amazon is revealing its third Kindle today at a jam-packed press conference in New York City. The new Kindle, which we first caught wind of last year, is expected to have a larger screen to be used for reading newspapers, magazines, and textbooks. (Don’t expect it to save the newspaper industry, though). Arthur Sullzberger, Jr. of the New York Times is in the house I’ll be liveblogging the event, which should start any minute now.

Notes:

Bezos just stepped on stage.

The Kindle vision is every book ever printed available in 60 seconds. 18 months ago launched with 90K books, 200K books with launch of Kindle 2, added another 45K books.

Where we have Kindle editions, Kindle is now 35% of books sold for those titles.

Amazon’s third incarnation of the Kindle is here, folks. All 9.7-inches of it. Specs and info leaked about the now official Kindle over the last week and they seemed pretty much dead on. It comes packing with the larger screen, auto-rotating screen, and finally supports PDF files fully with a native PDF reader. This larger Kindle also ups the storage capacity from 1,500 books on the Kindle 2 to 3,500 on the Kindle DX. The pre-order is up now and will ship shortly if you’re willing to drop $489 on one.

Here is Amazon’s welcome video.

Editor’s note: The guest post below was written by Brian Lawe, CEO and Founder of MyStoreCredit. Brian’s company develops e-commerce tools around payments, cross-promotion and customer mapping. He’s been watching Twitter for some time.

The rumors are ripe that Apple, Microsoft, Google and News Corp are all sniffing around Twitter – but no one has mentioned the best fit: Amazon. If Amazon doesn’t jump into the arena, someone at Twitter ought to make a call to Jeff Bezos. Neither Amazon nor Twitter should miss the powerful synergies from merging the two companies. To wit:

1. Introducing Twitter Payments: Amazon has been struggling to gain traction with its payments platform. They will never unseat or even threaten PayPal until they come up with a unique and differentiated strategy. The world does not need yet another payment option. But Twitter is something new and does offer a smart strategy. By rewarding Twitter users for associating their Twitter accounts with their Amazon account, Amazon can instantly create a new, potentially dominating powerhouse in payments for mobile and online transactions.

The mystery behind what Amazon will announce on Wednesday has taken another twist. The WSJ is reporting that Amazon will, indeed, announce a University textbook specific model with a larger screen at the press conference later this week. So where did this come from and what else can we expect?

One Lev Gonick from Case Western Reserve University has confirmed that Amazon will be providing the university with larger screen Kindles next school year. And Arthur Sulzberger Jr., New York Times Co. Chairman is said to be sharing the stage with Amazon CEO Jeff Bezos at the event on Wednesday which quasi-confirms the rumors of a newspaper specific Kindle.