There were a number of problems with the Kindle/Instapaper support. The biggest is that the system was completely unreliable. The way Instapaper works on the Kindle is that you have to set up the service to email your Kindle either daily or weekly wrap-ups of the articles you bookmark on the web. In my experience, about half the time this would work, the other half, these summaries simply would not get sent. Arment says he’s tried talking to Amazon about the issue, but has never received a response. Considering that Kindle users are paying $0.15 for each of these emails sent (an unfortunate side effect of the Kindle’s free built-in network), and it still is completely unreliable, this is totally unacceptable. So Arment has come up with a new way of doing Instapaper + Kindle: USB transfers.

To be clear, this isn’t the most ideal solution, since at least the over-the-air sync required you to do nothing and now you’ll have to attach your Kindle to your computer. But USB transfer will be infinitely more reliable and 100% cheaper (as in, free). This new process (which Arment stresses is still very much “beta”) allows you to download a Kindle-compatible .mobi file. These files are populated with your 20 more recent Instapaper saved articles. This also isn’t ideal if you want to see older articles you have saved, but I suppose you could always re-save them if you really wanted them on your Kindle.

On the upside, Instapaper will now work with non-U.S. Kindles (the email service was previously U.S.-only). Also nice is that many articles will now contain images, which previously were not transfered via the email route.

Along with Kindle-ready .mobi files, Instapaper now also allows for ePub downloads, the format that many other popular e-readers use (like Sony Readers). The idea is the same with the Kindle support, you get your 20 most recent articles converted into .epub files which you can then read on these devices. There is also now print support for all Instapaper folders.

Arment notes that because the over-the-air Kindle solution is completely unreliable with no support from Amazon, he plans to completely discontinue it next week in favor of the USB method. And if you’re wondering why you can’t simply use the Kindle’s built-in web browser to visit Instapaper, the answer is because the Kindle’s built-in web browser is awful and Instapaper currently doesn’t work on it (though Arment seems to suggest he is still trying to fix that).

While it’s the Kindle that is the dedicated reading device, it’s interesting to note that Instapaper’s iPhone app is at least a billion times better for consuming Instapaper content away from your computer. Not only does it seamlessly sync over the air, but you can mark items as read from it, visit the actual content on the web, and do about a dozen other more useful things. Of course, the downside is that the iPhone has a backlit screen (harder on your eyes) and is much, much smaller than the Kindle. An Apple Tablet + Instapaper app might be the perfect remedy for the latter.

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This guest post was written by Steve Poland, a former TechCrunch writer working on his soon-to-launch start-up InSeconds that allows sites to easily customize each visitor’s experience, resulting in optimized revenue for each visit.

Affiliate marketing is 15 years old this month—CyberErotica is said to have launched the first program in 1994. The adult industry has always been ahead of the curve, but I digress. Despite 15 years of existence, which is essentially an eternity in “online years”, the performance based marketing method is still in its infancy. Sure, there are lots of affiliate programs that exist for many online etailers (and other sites that seek sales, leads and visitors) and $2.1b was paid out last year from affiliate programs, but affiliate marketing is still not as easy as it should be for website/blog Publishers to implement and get compensated for their referrals.

For those that don’t know, affiliate marketing works like this—a company with a product or service for sale pays a referral fee to Publishers (marketing companies) that can drive sales, leads, or visitors to them. The Publisher is taking on the risk here—they might be outlaying their own cash on advertising to promote the product/service, or they are linking to that company’s product/service in the content of their site’s own webpages (when they could be linking to another company instead). The Publisher signs up for an account with the affiliate program and is then given “trackable links” to use in their content, which track referrals back to them. Most etailers have an affiliate marketing program in place—for example, Amazon.com’s Associates program will pay 4%-15% referral fees to you when a visitor of your website clicks a link on your site and makes a purchase at Amazon.com.

Twitter & Facebook Turn Everyone Into An Affiliate Marketer

Most recently, it’s not just websites/blogs that are referring sales, but rather individuals themselves, who are using realtime sites like Twitter and Facebook to influence their friends and followers by recommending products to buy, music to listen to, and movies to watch. These realtime discussions are becoming important sources of referral sales and leads for websites—if someone is asking on Twitter what digital camera they should buy, you bet your ass that Amazon.com wants anyone on the Internet responding to that user’s question to be linking to a camera for sale on Amazon.com (and not Walmart.com or BestBuy.com). Amazon.com wants to make sure that those influencers are compensated for referring people to buy from their website, which thus positively reinforces them to continue linking to Amazon.com product pages in the future.

Everyone with access to the Internet today is a Publisher. They are a voice. This has always been the case, but not the way it is now with Microblogging. Individuals were Publishers on a smaller scale via email forwards, email replies, IM, or most recently blog posts. Blogging broadened individual’s view points (influence) up to a global scale—no longer would they only influence just a few friends in a closed-circuit email, but they could influence the masses online. But blogging wasn’t realtime discussions. Instant messaging and chat rooms were always realtime discussions—but primarily on a one-on-one or small-group basis. Twitter and Facebook status updates, aka microblogging, has mashed the realtime nature of instant messaging with the global scale and voice of blogging.

Amazon.com Pioneers Affiliate Marketing, Again

As an early pioneer of affiliate marketing for site/blog Publishers (holding the patent on all the components of an online affiliate marketing program), it only makes sense that Amazon.com would now become an early pioneer of affiliate marketing for individual publishers—those who simply tweet and comment on their friend’s Facebook updates. Last week, Amazon.com announced they would start compensating individuals with referral fees for using Amazon.com links in their Twitter messages and in their Facebook status updates/comments. Although it will likely lead to more noise (and spam), I think we’re going to see many companies follow Amazon.com’s lead. I also think this has the potential of being a game changer, if some other pieces fall into place—more on this in a bit.

What has shocked me over the years is the number of links in webpages that aren’t trackable links. Most links in content are just regular links out to other webpages, which means that they don’t contain a tracking code that corresponds to them as the referring website—which means that when a sale is referred and occurs on a site that has an affiliate program in place, that affiliate program site doesn’t know who to pay the referral fee to (even though they honestly would like to, because it encourages future linking to them by that referring Publisher). In a perfect world, all the links on all the webpages on the Internet that link to Amazon.com product pages would be trackable links which would earn those websites referral fees for whenever their visitors click over and purchase products from Amazon.com. Ditto for all the links that have affiliate programs in place.

Affiliate Marketing for Publishers Still Not Quick and Easy, Yet

I would go out on a limb and estimate that 99.99% of all links on the web are not trackable links. Why? Because it’s been a bit of a pain in the ass, quite frankly. If you’re a publisher and you’re writing a content piece, you would need to go away from your writing, login to the affiliate program for the website you want to link to (i.e. Amazon.com Associates), and then generate the trackable link for the webpage you want to link to—ensuring that when your visitors click that link, that you’ll earn referral fees from Amazon.com when purchases occur. Not to mention that you have to signup for all of these affiliate programs; some of these programs are handled by third-party companies and become discontinued (making your links dead). And then there’s the money—if you don’t get very many visitors each month to your site, you may only earn a few dollars a month from affiliate programs, which then discourages you from putting forth the time to place trackable links into your content in the first place.

The lack of ease that sites/blogs have had to endure to use affiliate marketing over the years is the same for Individuals now. Amazon.com has said they endorse trackable links by users in social media, but it’s still not easy enough. Sure, you can go over to Amazon.com, login to your Associates account, and a button appears at the top of every product page saying “Share on Twitter”, which then creates a tweet with your trackable link in it, but that’s still one too many steps. People are lazy. More than half of Twitter users are using a Twitter application to do their tweeting. Until the affiliate programs are integrated into the social networking platforms (Twitter, Facebook, MySpace, forums) or the applications used on these platforms (Tweetdeck, Seesmic, Tweetie, bit.ly), this affiliate marketing by individuals won’t take off.

It’s in the interest of the platform (Twitter) to make this easier because it will ultimately allow their users to earn money. It’s in the interest of the users, because it earns them money and reinforces their usage of the platform (Twitter). It’s in the interest of the affiliate program (Amazon.com), because it positively reinforces users to share links to their site. (On the flip side, Twitter might not want to encourage this for fear of making teh spam problem even worse than it is).

“Facebook Credits” could become de facto Virtual Currency with a Facebook integration of Amazon.com

But if you really think about it, Facebook should really be integrating these affiliate program partners into its platform first. Facebook has the most to gain by integrating. You may have heard of the virtual currency system that Facebook has been working on—Facebook Credits. It will allow users to purchase Facebook Credits with cash and then use them in third-party Facebook applications, such as leveling up your character in a game or buying a virtual rose for a friend. To get people using this system, Facebook will likely give away some initial credits to every user, to get them to see how simple they are to use, then get the user to pull out their credit card and refill.

What about a constant refill of Facebook Credits every month to help spur more in-app activity/purchases? That could happen. Even if users were merely earning $0.44 or $1.32 monthly from their link sharing habits, if these referral fees were automatically turned into Facebook Credits, Facebook could really jump-start this in-app currency of theirs (and if they operate anything like Apple, they’ll nab 30% of all in-app money spent). This will work for Amazon.com and other affiliate program participants, as long as the user knows that the 1000 Facebook Credits they earned this month were from their sharing of Amazon.com links. Facebook would love it because these affiliate links would be an income generator for their users, encouraging their users to spend more time on Facebook, and of course there is revenue associated with users spending their credits. Finally, Facebook application developers would love it because they’ll be seeing a steady stream of revenue as well. Meanwhile, app developers and Facebook can steer clear of Scamville-type offers. With affiliate links, you only get paid if someone actually clicks through and buys something. Good referrals get rewarded,while bad referrals get nothing.

Plus, imagine the publicity for a Facebook or Twitter. I can see the headlines now, “Facebook now ‘employs’ 300 million people” or “Facebook lets 300 million people to start earning money just by sharing links”.

This is Now, Get Ready for the Effects

One effect of affiliate programs becoming integrated easily into these realtime platforms (and/or client apps) is that referral fees will go down. Amazon.com currently pays out 4%-15% on referral sales, but that’s because they know only a small percentage of their sales occur now from referrals (because of the lack of ease—and because of the laziness of sites linking to Amazon.com). But with a vast usage of trackable links, then for example, if sales remained flat and 5% of all purchases were referrals previously and now that number becomes 25%, then Amazon.com can’t be paying out 8% referral commissions (unless sales went up 5x too), so Amazon.com would reduce that to 1.6% referral commissions (8%/5).

Yes, this movement is going to turn up the volume of spam noise to us all via our use and searches on Twitter, Facebook, and elsewhere. Those people who you follow may get spammy, but their influence over you will go down (just like those people that send you too many nonsense email forwards). Everyone has a personal brand and if you spam your audience with tons of links, they won’t be listening to you as much.

But what I’m talking about isn’t the future—it’s here now, with Amazon.com leading the way. Those companies that don’t embrace affiliate marketing for Individual Publishers, will lose. If someone is tweeting about the new iPod, that someone is going to link to the webpages that will earn them money.

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Here’s why this is interesting: As Amazon clearly notes at the end of its email (copied below), you will earn referral money for anyone that clicks on these links and buys a product. Obviously, links that bring in referral fees are nothing new, this has been going on with blogs for a long time. But Twitter users do love to click on links, so this feature could actually mean some real money for popular Twitter users with a massive following. And it’s yet another way that companies — and now even Twitter’s users — are making money off of Twitter, which Twitter won’t see a dime of (presumably, anyway).

Something else to think about: A lot of blogs disclose when they’re supplying you with a referral link that they will make money from (though certainly not all of them). But on Twitter, that’s going to be hard for people to do even if they wanted to because of the 140 character limit. Other social sites, like MySpace, for example, do not allow you to post affiliate links. Twitter, it would seem, has no problem with this. In fact, at least one employee tweeted that he was excited for the launch.

You can find out more about Amazon’s rules for this type of stuff on its FAQ page. Below, find the text of the email that was sent out to Associates members.

From: Amazon.com Associates Program
Date: Wed, Nov 4, 2009 at 12:05 AM
Subject: Amazon Associates Now Integrates Directly with Twitter

Dear Associate,

Today we are excited to announce the launch of a new feature called Share on Twitter. You can access Share on Twitter from the Site Stripe and post to your Twitter account from Amazon detail pages in just two clicks.

The Share on Twitter feature is easy to use. Simply log in to your Amazon Associates account and then visit any detail page on Amazon.com. By clicking on the Share on Twitter button in the Site Stripe, a new window will open and an Amazon-generated message is pre populated in the ‘What are you doing?’ text area of your Twitter account (you may be asked to log in to your Twitter account). That message will include a shortened URL that already includes your Associates ID. You’ll have the option to edit this message or simply hit the ‘Update’ button to post to your Twitter account. When Twitter users click on the link in your post and make a qualifying sale, you’ll earn referral fees. That’s it.

For more information about how you can use social networks in connection with your Associates account, please visit our Social Media FAQ.

Also, did you know that you can stay connected with Amazon Associates by following us on Twitter, becoming a fan on Facebook and joining our group on Linkedin? We’ll post program announcements as well as top deals and promotions.

Please tell us what you think of our new Share on Twitter feature using hashtag ‘#AMZNSOT’ on Twitter or contact us via the contact form. We want to hear from you!

Sincerely,

The Amazon Associates Program

[photo: flickr/177]

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Zappos CEO Tony Hsieh writes in a public letter:

We’ve been spending the past few months obtaining all the proper government approvals, and I’m happy to say that we officially closed the deal at the split second between Halloween (10/31/09) and All Saints’ Day (11/1/09). From a practical point of view, we’ve switched out our previous board of directors with a new management committee that is composed of people from Zappos as well as Amazon.

Our investors and other shareholders exchanged their Zappos.com shares for approximately 10 million Amazon.com shares. Given the closing price on Friday, 10/30/09, for Amazon stock, those shares were valued at approximately $1.2 billion at the time of close.

As expected, the Zappos management team will remain intact and the company will continue to operate as a wholly-owned subsidiary with headquarters in Las Vegas, NV.

I’ve embedded a chart showing Amazon’s stock price evolution since the announcement of the acquisition was first made at the end of July up until now. The significant jump noticeable on the right is from when the company announced solid third-quarter earnings.

It made an estimated $272 million difference for Zappos this weekend.

And how was your Halloween?

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(Via @Zappos)

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It’s simple stuff. You set up a unique phrase like “Axe Murderer” or “Car Lover” or “Honey I shrunk the kids” and tie it to a 4-digit PIN. This is linked to your Amazon account which, of course, is pre-loaded with your credit card and shipping address.

I do have to wonder what was so hard about entering an email address and password, but clearly Amazon’s psychological research unit thought “Fluffy Bunnies”, or some such, was going to be easier for the average Jane or Joe to remember.

It’s also positioned as a parent/teen solution competing (kind of) with PayPal Student Accounts, because, like the latter, you could give your student son or daughter a PayPhrase which access your account which doesn’t actually access your account controls. PayPhrase lets parents track spending and set account permissions/alerts/etc.

There are other participating websites which will be implementing PayPhrase, including DKNY.com, Jockey.com, and Buy.com that already accept by Amazon’s Checkout service. Of course, earlier this month, eBay came up with its Bill Me Later deferred payment option for both eBay and PayPal which will be carried by Toys R Us, Zappos.com, Petco and Wal-Mart among others.

However, how many people are not going to have a cutesy phrase and default instead to something like “Dad’s Birthday”. All you then need do is type in a plausible month and day like “0820″ for the PIN and… voila! And how many people will just use “1234″ for their PIN? Plenty.

What do you think? Leave your thoughts in the comments.

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Unlike completely elastic hosted DB services, which abstract a large-scale cluster into a shared environment for customers, the Amazon model is to step up or down through tiers of service based on requirements. The tiers of service (with names that seem to be inspired by a fast food restaurant menu) and pricing are:

You also have to provision a set amount of storage, which is charged at $0.10 per GB-month (pre-provisioning means that you can run out of disk space, it wont grow out). Requests are charged at an additional $0.10 per million requests.

Backups are available (full, snapshots etc.) and backup space equivelant to the provisioned storage space is available for free. Additional space is $0.15 per month. Data transfer is charged at the standard AWS rates, with no charge for data transfers between AWS services (ie. if you have your web server at one host, and the DB with AWS, you will be charged for all the traffic between the web server and the DB).

AWS offer a large range of services, and full RDBMS hosting seemed like an obvious service to offer. AWS has the existing SimpleDB service, which is a key-value based data store.

My initial take on the new RDS service is that it seems that it involves pre-defined and pre-configured EC2 instances with MySQL running. This makes the task of creating and starting new DB instances easier, but does not mean that your resource allocation will automatically grow and scale with resource requirements. There are existing third-party services, such as Fathom, that are built on AWS and use EC2 to create and manage DB instances.

Your application will have to recognize that more resources are required, and make the appropriate API calls to either step up or down along the tiers of instances available. RDS, like most AWS services, provides building blocks for developers to use.

Update: Amazon has now officially announced the service on the AWS blog.

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Founder Col Needham explains the history a bit in a birthday message today. IMDb was born on October 17, 1990 as a series of Unix shell scripts to let users search the USENET group, rec.arts.movies. It wasn’t called IMDb yet (that came four years later), but it was the beginning of being able to search for movie information on the Internet.

Once the web as we now know it sprung up around the IMDb, the site became hugely popular — it’s probably the first website that I remember being addicted to when I was young. The site became so popular that its founders realized they would have to start charging visitors if they wanted to keep it up (remember, this was the mid 1990s, Internet advertising was much, much smaller than it is today). But in 1998, Amazon came along to buy the site, enabling it to stay free for users. Though they would later add IMDb Pro, a subscription-based section with more data on movies.

They’ve also added new functionality to the site over the years. This includes the ability to play video content (which is ho-hum), and the addition of the excellent movie box office tracking site, Box Office Mojo.

IMDb says it now gets 57 million people coming to its site each month. I still can’t believe that it’s nearly as old as I am.

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Google offered some more details on its upcoming digital book store earlier today at the Frankfurt Book Fair. Google plans on selling downloadable electronic books called Google Editions to any device with a browser.

Today, Google Books gives you the option to buy books you find there from other online retailers. But Google Editions will come directly from Google’s own yet-to-be-launched store. It will make 400,000 to 600,000 books available through agreements with publishers, who will get a cut of each book sold (about 63 percent if it is sold directly through Google, 45 percent if it is sold through an affiliate retailer, which would split the rest with Google similar to the AdSense model).

No wonder Jeff Bezos is trying to block Google’s book settlement. Google wants to loosen his grip on the digital book industry through his Amazon-only Kindle. At the same time that it is fighting those efforts to curtail its book settlement and access to millions of orphan works, it is also making making its own thrusts into other areas.

Already, Google makes it possible to download or print over one million public domain books in a partnership with Sony. Those books are all available in the open ePub format. It would make sense if Google Editions were also available in ePub, but the plan to turn regular browsers into eReaders probably needs something else like Google Gears (which has offline capabilities) to make it work.

If Google can turn any browser into a digital book reader and it can offer as good a catalog as Amazon can on the Kindle, then that is one less reason to buy a Kindle. Whether or not Google will be offering all of the latest bestsellers or the types of tomes it highlights on its homepage today, such as Gangs and Delinquency in Developmental Perspective, will determine how much of a threat it becomes to Amazon. But if I had to choose between the Kindle or the browser ultimately winning this battle, I’d bet on the browser any day.

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Probably the reason it prompted such sideways looks, however, is that this is not a classic ‘web app’ startup, but an e-commerce hub. Vente Privee began in France in 2001, but has only recently become a powerhouse of the new wave in Europe: an online private sales club involving designer fashion brands, otherwise known in the fashion retail industry as the “overstock market”. Its success has lead to a bunch of clone sites, while Vente Privee itself is on target to hit €650m in turnonver globally this year. In other words Europe is not out to lunch – as Arrington put it – it is out to shop.

But Vente Privee’s success has now lead to a number of U.S. companies becoming very interested in either entering this world or expanding their operations. TechCrunch Europe thus understands, from some very well placed sources, that Gilt, Amazon and eBay are all actively looking at acquisitions in the European private shopping club space. The price for Vente Privee alone is being talked about in terms of a $1.5 billion sale. Some sources even put the figure at between $2 billion and $4 billion.

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Today, doubleTwist has revealed what it means by that: doubleTwist now includes an integrated Music Store, powered by Amazon’s MP3 Store. But unlike iTunes, this app will let you transfer your files to non-Apple devices. The store includes Amazon’s catalog of over 5 million songs, allowing users to purchase songs either as albums or individual tracks (there’s also plenty of free songs available). From a design standpoint, it’s clear that iTunes served as a big inspiration — if you’ve ever used the iTunes Store before, it will take you all of thirty seconds to figure out how to use this one.

In fact, it’s probably safe to say that the new doubleTwist music store is actually easier to use to download music than iTunes is, simply because there’s so much less going on. Upon launching the store you’ll see a handful of top albums and songs, along with a prominent search box at the top of the screen. Click on an album and you’ll see a list of the disc’s tracks, which you can click for a 30 second preview. To buy something simply enter your Amazon ID.

Of course, the store is easier to navigate than iTunes for a reason: there are no movie or TV downloads, no playlists or mixes, and obviously no App Store. But for music, it works like a charm. And there are more features in the pipeline, including recommendations, artist bios, and song ratings.

Once you’ve downloaded your music, you can drag and drop it into whatever device you’ve connected to your computer. Unlike iTunes, doubleTwist supports hundreds of devices, including the Pre, BlackBerry, PSP, Android, and others. The application also lets you manage your photos and movie files, though the company says it doesn’t currently have plans to offer video downloads.

All in all, this is a very impressive effort. Before now Amazon’s MP3 store has been primarily browser based (there are some mobile devices that support it but doubleTwist believes this is the first desktop based application to integrate the store). And there’s no doubt that the doubleTwist download experience is far better than navigating Amazon in your browser. doubleTwist is going to have a hard time convincing the throngs of iPod and iPhone users on iTunes to make the switch, but for anyone else using a device that’s not supported by Apple, it’s quickly turning into a very appealing solution.

doubleTwist’s Music Store is currently available in the Mac version of the app, with the PC version coming soon. The store is currently US-only, but doubleTwist says that UK, German, and French versions are on the way.

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I pressed Hsieh on details about his relationship with Jeff Bezos and Amazon. He can’t really comment because the US Justice Department hasn’t yet ruled on the deal, but he did admit “I’ve always thought Jeff was a lovely man.” So that’s how it works in that soon-to-be corporate family.

The most interesting admission may be his advice for start-ups: Do you really need venture capital?

TC50 and Tony Hsieh from sarah lacy on Vimeo.

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Basically, the ToyBots’ vision is to be the platform that any toy maker can use to make sure their devices have a portal to the Internet, and all the data potential that comes with it. SGN and ToyBots founder Shervin Pishevar describes the key idea as a “Kindle of toys” or an “iPhone inside of a toy.” The thought there being that the Kindle works so well because of the network behind it that allows the device to seamlessly connect to Amazon’s extensive collection of books. Likewise, ToyBots is announcing a partnership with a major telecom provider (they’ll announce in the next week or so) that will allow toy makers to set up pre-paid service for their toys (that is, have wireless costs baked into the product, like the Kindle, rather than making customers pay a monthly fee).

ToyBots’ demo product is called the Woozee. Basically, it’s a cute stuffed toy that can transmit messages sent over the Internet. So if a parent is away on a business trip, but wants to be able to read to their child at night, they can record themselves reading on something like their iPhone (via an app) and send it to the toy. The child would get an alert via the toy that a message is there. Then, when they’re ready, they can play it back, via the toy (think: Teddy Ruxpin, but with a parent’s voice rather than a stranger’s, and it has an accelerometer!). A sender could also set message to play for a specific time; the child’s bedtime, for example.

There is also a website component to this Woozee that allows for further functionality. You can have a network of friends with their own toys, for example. This is kind of like the Chumby, as it’s a web-connected device with a website component where you can manipulate it as well.

Alongside Pishevar, Carrie Feigel, Senior Director Marketing, presented today.

Expert Panel Q&A (paraphrased)

The experts: Don Dodge, Yossi Vardi, Ron Conway, George Zachary, and Jason Hirschhorn.

Q: Who are you selling to? And will you let Obama speak to children through this device?

SP: Yes, Obama will be able to speak to the kids. The number one audience is the developer community to make all kinds of toys. We’d like the major toy companies to get on board.

Q: How important is the platform versus the toys? I want a Chucky toy.

SP: I want a Chucky toy as well. A lot of different audiences can be reached with this. We hope it’s similar to the App Store with the iPhone.

CF: There’s a big market for people who want to get their favorite toy with this tech.

Q: How does Spongebob get on this?

CF: He would get his own toy and cotent.

Q: Do you make royalties from toy developers?

CF: That’s a part of it, but also a partnership.

SP: We don’t want to build the toys ourselves. We want to be the gaming cloud.

Q: Will you open this to anyone, or will you control this? What about porn?

SP: We’ll leave that to someone else to work on.

Q: What’s the security?

CF: There would have to be careful controls, we would approve apps, and manufacturers would have a say.

Q: Big challenge crossing the virtual world to physical world with a toy.

CF: Club Penguin started virtual then went physical.

Q: Invest/take another meeting/pass?

GZ: Second meeting
JH: Same
RC: Get retailers
YV: We need better toilet seats first!
DD: Nothing more to say than what Yossi did.

Video:

Other Coverage:
TC50: Toybots lets toys come to life with Internet connectivity VentureBeat.
ToyBots – Connected Toys Of Some Sort #TC50 Techgeist.
Quick Thoughts from TC50: ToyBots Startup Marketing Blog.

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Purchasers will receive a copy of the book for the Kindle or $30 in credit for Amazon products or a check. So either you can get one book or cash for two or more books.

Giz has the full text of emails being sent to folks who bought the book:

Hello,

On July 23, 2009, Jeff Bezos, our Founder and CEO, made the following apology to our customers:

“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.

With deep apology to our customers,

Jeff Bezos
Founder & CEO
Amazon.com”

As you were one of the customers impacted by the removal of “Nineteen Eighty-Four” from your Kindle device in July of this year, we would like to offer you the option to have us re-deliver this book to your Kindle along with any annotations you made. You will not be charged for the book. If you do not wish to have us re-deliver the book to your Kindle, you can instead choose to receive an Amazon.com electronic gift certificate or check for $30.

Please email Kindle customer support at kindle-response@amazon.com to indicate your preference. If you prefer to receive a check, please also provide your mailing address.

We look forward to hearing from you.

Sincerely,

The Kindle Team

Well that’s nice! Amazon made two mistakes here – they didn’t pay attention to copyright ownership and they didn’t pay attention to the implications of destroying copies of 1984. If this were My Life in France or a Clive Cussler novel, I doubt it would have created such a buzz. However, the irony and newsworthiness of the destruction essentially made this explode. Amazon will probably send flowers next time they have to delete a book like this – and I know they will – in order to head all the outrage off at the pass.

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When you are coming from behind, embracing openness is always a good strategy. That is exactly what Sony is doing with its electronic book reader, which is up against the Amazon Kindle. The key to the Kindle’s success is that it is paired with the largest book store in the world, where most people likely to buy an electronic book already have accounts.

Sony is trying to fight this advantage by being more open and thereby attracting other large players into its sphere of influence. Its biggest ally in this fight is Google, whose M.O. is to attack closed industries with open technologies. Today, Google is making available more than one million public domain books in the open ePub format, which also happens to be the linchpin of Sony’s open strategy.

Yesterday, at the unveiling of Sony’s latest electronic book reader at the New York Public Library, the head of its ebook division, Steve Haber, emphasized: “”You want a ubiquitous experience: open, open open.” He repeated the mantra in the way that Steve Ballmer says, “Developers, developers, developers,” except he said it a little softer since he was in a library.

As I’ve mentioned, the key to its open strategy is Sony’s commitment to adopt the ePub format, which is an open format for electronic books. As a result of embracing that format, Sony announced yesterday that libraries, starting with the New York Public Library, would be able to “loan” out digital editions of books in their collection for 21 days to people with Sony Readers. Furthermore, book chains could start selling their own digital books without going through Sony’s digital bookstore as long as the books are in the ePub format.

With an open digital book format like ePub, anyone can sell or distribute electronic books. It doesn’t have to be Sony, which after all is more interested in selling Readers than in selling the books. Amazon’s strategy is the opposite. It wants to sell as many electronic books as possible in case people transition away from paper books. The Amazon Kindle does not support ePub. The Kindle is tied to Amazon’s book store. Its sole purpose is to drive sales of ebooks on Amazon. If you could buy an ebook at Barnes and Noble and read it on the Kindle, that would not make Jeff Bezos happy.

As long as Amazon remains the market leader in electronic books, it can stick to its closed format much like Apple did with the iPod and its DRM-wrapped AAC music format for many years. Eventually, though, open won and Apple removed the DRM from songs in iTunes as well. The same will happen with the Kindle and Amazon, but not until Amazon feels that it has a safe enough lead so that Sony, Google, and all the booksellers in the world combined won’t ever be able to catch up.

Meanwhile, Amazon has joined another open crusade—this one against Google. It is a member of the Openbookalliance, which is a group of publishers, Microsoft, and others who oppose Google’s book settlement. It’s funny how companies choose to be open only when it suits them.

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Amazon Web Services is today announcing the limited public beta of Virtual Private Cloud (aka Amazon VPC), a service that essentially makes it possible for customers to create their own logically isolated set of Amazon EC2 instances to connect to their existing network over a secured VPN connection. That means Amazon Web Services is taking a major step in making its cloud computing services even more enterprise-friendly than they already were.

Amazon CTO Werner Vogels has published a lengthy but read-worthy blog post for the occasion, in which he acknowledges that enterprises tend to find it challenging to transition applications and services to the cloud when they have often invested years of resources and tons of money setting up their own IT infrastructure (datacenters, networks, etc.). He also says ‘private clouds’, which are basically emulations of cloud computing inside private networks, are not true clouds as far as he’s concerned and that Amazon VPC adequately fills the void.

To further his point, he lists what you can do with Amazon VPC:

- Create a Virtual Private Cloud and assign an IP address block to the VPC. The address block needs to be CIDR block such that it will be easy for your internal networking to route traffic to and from the VPC instance. These are addresses you own and control, most likely as part of your current datacenter addressing practice.
- Divide the VPC addressing up into subnets in a manner that is convenient for managing the applications and services you want run in the VPC.
- Create a VPN connection between the VPN Gateway that is part of the VPC instance and an IPSec-based VPN router on your own premises. Configure your internal routers such that traffic for the VPC address block will flow over the VPN.
- Start adding AWS cloud resources to your VPC. These resources are fully isolated and can only communicate to other resources in the same VPC and with those resources accessible via the VPN router. Accessibility of other resources, including those on the public internet, is subject to the standard enterprise routing and firewall policies.

A more detailed, technical outline of the offering can be found on the Amazon developer blog.

The Amazon Virtual Private Cloud is currently limited to the EC2 cloud compute service, though Amazon said it will include other web services (e.g. S3) in the future. Pricing, as usual, is based on usage.

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Much of that speculation is factually incorrect, we’ve confirmed from a source close the the deal. iLike, which has been profitable for over a year, had multiple offers to be acquired.

Our source says that, in addition to MySpace’s offer, both Facebook and Amazon submitted bona fide written offers to buy the company. At least one other large company expressed interest to Allen & Company, iLike’s advisors to the deal.

Activision Blizzard and Microsoft have been incorrectly rumored to have been seriously interested in the company, however.

iLike ultimately chose MySpace based partly on price, and partly on a fit with the buyer, sources say. Facebook was largely off the table due to building distrust between the companies.

Also, multiple sources tell us that the deal negotiations with MySpace have been moving along quickly and are now virtually complete. There was no last minute canceled iLike board meeting (in fact no board meeting was scheduled), and no hiccups over tax issues on the deal.

“People are literally making this drama up,” said one source.

It’s also clear that the relatively low valuation that iLike commanded in this sale was due less to their performance and more to uncertainty created by Facebook over their future on the Facebook Platform.

iLike is profitable and has 50+ million registered users. Unlike other music services they don’t have crushing streaming payments to make to labels because, well, they don’t stream music.

They are certainly now in a position to stand on their own as a company over the long term. Except that ongoing uncertainty over Facebook’s intentions to compete with them directly as well as regular changes to the rules around Facebook Platform mean they could get cut off at any time.

In other words, this is less about iLike’s financial and user growth and more about the value of users from Facebook Platform. Facebook seems unwilling to let Platform partners get too big. There continues to be no clear line as to where Facebook’s internal apps end and Platform begins.

We continue to expect the deal to be closed and announced shortly. And we eagerly await Facebook’s response to their main competitor, MySpace, suddenly owning (the de facto) Facebook Music.

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When Amazon paid $928 million for Zappos in July, it got a little something extra in the box: the Clothes.com domain. It turns out that Zappos bought the domain last year from Idealab for $4.9 million (Bill Gross strikes again).

The detail is tucked away in Amazon’s SEC filing about its acquisition of Zappos:

In May 2008, we acquired the Clothes.com internet domain name from Idealab. The domain name was recognized as a purchased intangible asset with a useful life of 20 years. The entire purchase price of $4.9 million was assigned to the price of the domain name intangible asset and will be amortized on a straight-line basis over its remaining estimated useful life.

The “we” in that sentence is Zappos (now Amazon). At $4.9 million, the Clothes.com sale would have been the second largest reported domain-name transaction in 2008 after Fund.com ($10 million), and the second biggest one so far this year after Toys.com ($5.1 million).

The Clothes.com URL goes to a Zappos landing page with a clothing product smackdown. Zappos is primarily known as an online shoe retailer, but sells clothing as well. Such a large investment, however, suggests that Zappos may have had plans to branch out more aggressively into clothing, perhaps under the Clothes.com domain.

(Thanks to reader George Kirikos for the tip).

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Most of the public Internet companies have reported their second quarter earnings by now. In a research note sent out to clients today, J.P. Morgan provides a few takeaways from the quarter. We already know that the recession continues in overall online advertising (see our chart at right), but even normally-strong search revenue was down. And display advertising shows “no signs of recovery.” Travel, finance, and entertainment remain especially weak advertising sectors.

But even in a down market there can be winners. Both Google and Amazon gained share in search and e-commerce revenues, respectively. Google now commands 72.3 percent of all search revenues, according to J.P. Morgan. Online travel sites are also benefiting from the weak economy, with hotels giving them more inventory.

Here are some key takeaways from the note:

• Search revenue was down Y/Y for the first time. We estimate that domestic search rev was down ~2% Y/Y during 2Q as we believe Google’s and Microsoft’s gross search revenues were roughly flat, while we estimate Yahoo!’s gross search revenue was down ~10%.
• Google continues to gain search dollar market share. Despite the launch of Bing, search dollar market share shifts in favor of Google have continued. We estimate that the 2Q’09 gross dollar market share of Google, Yahoo!, and Microsoft came in at 72.3%, 20.9%, and 6.8% vs. 2Q’08 levels of 70.6%, 22.7%, and 6.6%.
• Display advertising is showing no signs of recovery. Yahoo’s display revenue was down 14% Y/Y in the quarter on top of 1Q’s 13% decline. The declines at Microsoft and AOL were significant
• Online travel agents are likely benefiting from increased inventory. Industry sources point to hotel suppliers both domestic and abroad giving more inventory to online travel agents in an effort to increase volume. This quarter, Expedia showed a 26% Y/Y lift in room nights sold, a significant increase from 1Q’s 13% growth.
  
• Amazon still gaining market share. 2Q saw Amazon (North America rev. +13% Y/Y) continue to take share from eBay (US non-vehicles GMV -8%), though the ~2,150 bps difference in growth rates was down from ~3,240 bps in 1Q.

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The global rise of Facebook is nothing less than astounding. In the month of June alone it gained 24 million unique visitors worldwide, compared to the month before, for a total of 340 million unique visitors worldwide.  It is now the fourth largest site in the world, trailing only Google, Microsoft, and Yahoo sites, according to comScore (see table below). Facebook itself only officially acknowledges 250 million active registered users (but you don’t have to be a registered user to visit some Facebook pages).

In the past year, it has grown 157 percent, gaining 208 million visitors.  It long ago passed its rival MySpace on a global basis, way back in April, 2008. Since then, it has passing even bigger sites on its way up. In the chart above, the blue line is Facebook. It passed Amazon back in August, 2008. eBay fell by the wayside in January, 2009. It surged past AOL sometime in February, 2009, and just last month it finally passed the Wikimedia Foundation sites (which includes Wikipedia).

So there it stands at No. 4. It will be a while, if ever, before it catches up to the three world leaders: Google, Microsoft, and Yahoo. They each have between 240 million and 500 million more monthly global unique visitors than Facebook (see chart below). But it’s always good for a company to have stretch goals.

Worldwide unique visitors (June, 2009).  Source: comScore

1. Google Sites: 844 million
2. Microsoft Sites: 691 million
3. Yahoo! Sites: 581 million
4. Facebook: 340 million
5. Wikimedia Foundation sites: 303 million
6. AOL: 280 million
7. eBay: 233 million
8. CBS Interactive: 186 million
9. Amazon: 183 million
10. Ask Network: 174 million

In the U.S., Facebook had 77 million unique visitors in the month of June, making it the sixth largest site in the U.S. (after Google, Yahoo, Microsoft, AOL and all Fox Interactive Media sites combined).

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Here’s the best excerpt:

“It would be a colour, flat-panel TV to the old-fashioned, black and white TV of the Kindle,” one publishing executive said.

Uh oh, Amazon.

Now, to be fair, the executive completely glosses over any upsides to the current Kindle. Like the fact that its E-ink uses very little power. Or that it can be read in sunlight and is easier on the eyes than a backlit screen, which the Apple device would undoubtedly use. But still, it always seemed inevitable that devices like the Kindle would make the transition from black and white to color, just as televisions and iPods did before it. Now it appears Apple is ready to shove the e-book readers into a world of color before they may be ready.

Thought of another way, this new Apple device is kind of like the kids in Pleasantville from the real-world, full-color future who visit the quaint black-and-white fake television town of the 1950s, and turn it on its head. Things could get ugly — but undoubtedly will be more exciting.

I have a Kindle (the 2nd generation), and I love it. But even after months of using it, when I switch to it after a day of using my iPhone, my initial reaction is to try and touch the screen. I want to flick my finger from side to side to turn book pages, not use the device’s clunky buttons. I want to be able to turn the device and put it into landscape mode, to pinch to zoom in on picture, and for the love of God, please let me use my finger to click on links rather than the awful joystick thing. Those are things that this Apple device will undoubtedly bring to the table.

Oh yeah, and you can be sure it will not only play music, but movies as well. And I’m sure it will browse the web in a way that makes the Kindle really look antiquated.

It’s interesting just how eager the FT report paints book publishers as getting in bed with Apple:

Book publishers have been in talks with Apple and are optimistic about being included in the computer, which could provide an alternative to Amazon’s Kindle, Sony’s Reader and a forthcoming device from Plastic Logic, recently allied with Barnes & Noble.

But, as they note, unlike the music industry, which Apple brought to its knees when it got a dominant position, Amazon, not Apple, is the one that threatens to do the same to the book industry right now. In Apple, they likely see a very viable alternative that should ease fears of Amazon doing something like cutting out the middle man (the publishers) and publishing books itself for the Kindle.

If Apple really is able to get this device out by September — which again, seems unlikely for a few reasons, another of which is that according to this new FT report, Apple hasn’t even talked to the film studios about it yet — Amazon is going to have to haul ass to get a response out on the market. Could that mean a Kindle 3, in color, by early 2010?

[photos and video: New Line Cinemas]

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How awesome is this? All credit goes to MeetTheBoss for creating this visualization (better quality image available when you click through), but it was too good not to share it with you.

It’s a visual representation of Amazon’s acquisitions and investments from 1998 until its most recent purchase of Zappos for a reported $928 million.

The image shows the giant Internet retailer was extremely active in 1999 and 2001 and significantly scaled back investments and buy-outs after the dotcom bubble burst, but has been picking up the pace, particularly since last year.

Who will be next on the map?

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Amazon quickly admitted that the move was a mistake to the press with a bland statement, but that wasn’t enough. So today, right before the company announced its earnings, CEO Jeff Bezos personally apologized for the incident as follows:

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.

With deep apology to our customers,

Jeff Bezos
Founder & CEO
Amazon.com

While the company had its reasons (apparently, the versions it deleted were unauthorized versions) and did give refunds, it didn’t change the fact that it was invading devices and taking back content which those people had (at least to their knowledge) legally bought. And it knows that was wrong, which is good.

Companies make mistakes, and we’ll chalk this up to a big, dumb one by Amazon, because they’ve now said as much. But what also troubles me is that while Amazon apologizes for incidents like this, it says nothing about other sketchy moves. Like how it is forcing mobile applications to be taken down because they access their APIs in a way that they don’t like (even though it’s fine to use the same calls on desktop versions of the apps).

And the whole idea of companies being able to remotely wipe content that you’ve bought is still troubling (Apple can do it to on your iPhone, but hasn’t used that power yet). But welcome to the 21st century. Not only is Big Brother watching, he’s got a backdoor passcode into your devices — and a kill switch.

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