Tag Archives: amazon.com

Business Strategy in Action, or Reaction, Both, or Neither

Business Mistakes, Business Stories, Business Strategy, , , , , , , , , ,

Apple vs. Kindle vs. publishers, oh my. Do you know the background? It’s all over the web. And I posted here this week about how Apple and Amazon.com and Macmillan are wrapped up in an ebook battle. And it gets better. As I write this, Wednesday evening, the news is that Amazon gave in and put Macmillan back into the mix, but at higher prices. But I just checked the site and my favorite Macmillan book, Thomas Friedman’s Hot, Flat, and Crowded, is listed there as available through third parties only. So go figure.

I’m fascinated with all of this. Really, business strategy in action. Consider these questions, and ask yourself: if you were Steve Jobs, or Jeff Bezos, what would you do?

  1. Does Apple Computer block the Kindle app on its new iPad? The iPad runs iPhone apps, and the Kindle iPhone app works great. But does that mean iPad users can buy Kindle books for their iPad for $9.95, while Apple’s iPad iBooks cost $14.99?

    2. Apple can block the Kindle app, of course. But what will users say about that? Apple users tend to take Apple as some public resource. They’re incensed when Apple acts in its own business interest instead of the public good. Would cutting off the competition be worth the dark side mask?

  2. Is Amazon.com seriously going to cut off its nose to spite its face? They took all Macmillan books off of Amazon.com because of a pricing and revenue share argument related to the iPad. But doesn’t that hurt the Amazon.com business proposition? Don’t we all go there to find the world’s largest inventory? And now they say they’re giving in, putting Macmillan back, and at the higher prices it demanded. What does that do for the Kindle pricing ceiling at $9.99? What happens to the $5 differential on iPad between a Kindle book and an iPad book?
  3. Do publishers gain by fighting either format, or either channel? Now Macmillan books are playing second fiddle at Amazon.com. It’s hard to tell from here, but it’s been presented as Macmillan squaring off against Amazon.com for a larger share of the revenue. That’s a bold move. Would you do it? How would you feel if you were a Macmillan author?
  4. What about Sony, or Barnes and Noble? These other ebook readers that were seriously planning to compete… are they just blown away? What can they do?
  5. Does this mean ebooks are finally for real? I’ve liked ebooks for more than 10 years now, read them on an early Rocket ebook reader, on a PDA, on a Kindle, and on my iPhone, as well as on a number of laptops. Are they finally going to get to critical mass? That would be nice.
  6. Do smart buyers wait for all of this to sort out? Remember the Sony Betamax format vs. VHS? You don’t want to invest on the losing side here, right? I finally bought Blue-ray HD after HD DVD lost the battle.

I’m enjoying the spectacle. I’ve got the Kindle, I’ve got the iPhone with the Kindle app on it, and I’ll probably buy an Apple iPad for its entertainment value, form factor, and long batterly life. For ebooks the iPhone Kindle app is still my favorite, so I’ll probably use the Kindle app on the iPad too, when I get it — if Apple doesn’t block it, that is. I don’t see how the bells and whistles of the new iBook reader can be worth the extra $5. But, since it’s not shipping for a few months anyhow, I’m going to wait and watch.

And I’m especially watching the strategy play out. Several of these big players can make bold decisions that will cut off competition and annoy the hell out of buyers. Is that the way it’s going to go?

(Image credit: from Mashable’s recent post on the eBook War)

eBooks: Hot, Flat, Crowded, and Not on Amazon.com. Let the Games Begin

Books, Business Stories, Business Strategy, , , , ,

(Important: late-breaking news. Since this was posted earlier today, Amazon has reversed its position on this. Macmillan is back, but with its own pricing on the Kindle. This is important. Here’s a link.)

eBook wars, you say? On one hand, it’s about time. On the other, wow, this is strategy in action. And interesting spectacle too. That’s why in athletics the championship games are more interesting: two big winners squaring off.

Mashable led over the weekend with Apple vs. Amazon: The Great Ebook War Has Already Begun, a post by Ben Parr, whose work I like a lot. Posted Saturday, it’s about Amazon and Macmillan. It’s hard to tell who’s making the move on whom here, but the announcement was that Amazon.com was removing Macmillan books from its web store:

According to the New York Times, the reason the books were pulled was the iPad. Macmillan told Amazon that it wanted to change its pricing and compensation agreement, upping the price of some books from $9.99 to $15 and splitting sales 70/30, the same model Apple uses for the iPhone app store and its upcoming iBooks store. Amazon’s apparent response was to flex its muscle and pull countless Macmillan books off the virtual shelves.

Last Friday I posted how the competition is win-win for all sides. We get a choice: Kindle books, just text, for one price, or Apple iBook books (pizazz) for a higher price. You get to decide. Ah, the magic of commerce.

But with Amazon.com and Macmillan biting off each other’s noses, it’s not so clear. Ben Parr wrote:

That’s why Amazon decided to use its biggest weapon, Amazon.com itself, against Macmillan to send a message to every publisher: If you don’t play by its rules, then you can’t be in its store. While a publisher can likely survive without the Kindle, the same cannot be said for Amazon.com. Publishers simply cannot afford to leave the world’s largest online retailer.

Who wins? In this case, the losers are Amazon.com and Macmillan, and all Macmillan authors, and anybody who wants to buy their books. Amazon? Don’t we all go there because we can find all the books imaginable there? And now we don’t? Although you can still buy Thomas Friedman’s Hot, Flat, and Crowded on Amazon.com, you can’t do it directly. They list it as available from third-party sellers, even though it’s one of the most important books of the last year. And here’s some irony: Priceless, William Poundstone’s analysis of free and fair value and all, is another victim.

Remember the old days, when things like this were about giving customers what they want?

The Next Big Thing Already Happened

Back to Fundamentals, Business Mistakes, , ,

The next big thing is never a repeat of last big thing. It’s always something new and different. It’s an original, not a copy.

Copy

What if the next Facebook already happened, and it was Twitter? What if the next Netflix already happened, and it was YouTube.

I see this a lot in business plans: businesses out to become “the next this” or “the next that.” Among the recent ones to cross my desk were “the Netflix of books” and “Facebook for business.” Yawn. Boring. Unrealistic. Copies are so unoriginal.

A tag line referring to some existing big thing (“Netflix for books“) rarely works.

(Image: Stephen Gibson/Shutterstock)

Technology vs Productivity vs Expectations, Oh My

Current Affairs, Productivity Software, Reflections, , , , , ,

This post title should be recited to the tune of “lions, tigers, and bears, oh my;” that is if you’re old enough to remember The Wizard of Oz, or young (at heart) enough to have seen it as a rerun. It’s rhythmic and its cyclical and it never stops.

Twitter and Facebook and LinkedIn are potential business advantages right now. Believe it or not, Twitter offers me real productivity gains. If you don’t see it yet, you will, later on. Facebook and LinkedIn do that for others (not me, but only because I can’t deal with too many different media). Businesses that manage these facilities well are ahead of the game, for now. If you don’t believe me, look at Zappo’s valuations when Amazon.com bought it.

Soon, though, they’ll be expected. It won’t be that businesses operating on the leading edge get credit. Instead, it will be that businesses operating behind that edge will suffer.

That’s the cycle: technology boosts productivity, and that boosts expectations, so we go back to the start again.

I’ve seen that same cycle for a long time now, over and over. When I started with spreadsheets, in 1980, they were so new that my use of spreadsheets gave me competitive advantage in business school. (That image to the right is a 1979 ad for VisiCalc, the first mainstream spreadsheet). Not any more; everybody assumes spreadsheets. Complicated spreadsheets don’t buy anybody competitive advantage. The same was true, believe it or not, with word processing (yes, there was a time when business people didn’t all understand word processing). Now we all assume that. There was a time when an early personal computer and WordStar software and a daisy wheel printer was a huge competitive advantage. No longer. And the same thing happened with desktop publishing. First it was competitive advantage, but then the bar was raised, and it became merely expected. And with email, and Internet websites. Technology to productivity to expectations to back to the start again.

True, we got better output. Spreadsheets give us better business analysis, word processing gives us better writing tools, and desktop publishing gives us better output. But we don’t spend less time. We just expect more.

(Photo credit: Woosa Rosa/Shutterstock)

Jeff Bezos’ Eloquently Understated 4-Point Performance

Advice, Entrepreneurship,

I really like this video (8 minutes), not just for what it says, but also for what it doesn’t say.

As Jeff Bezos stands comfortably in front of the YouTube camera, in a garden, with a flip chart, I’m reminded of the “it’s good to be king” refrain in Mel Brooks’ classic History of the World Part 2. There are experts all over the place — the Web, blogs, Twitter, et al., generate experts more than anything else — but Bezos is someone who’s 15 years down the path now and looking back on it with engaging and seemingly genuine good humor and good intentions. There’s no urgency here, and no embarrassment about giving advice. It’s delightfully simple understatement.

As he talks about Amazon.com’s history and the recent purchase of Zappos.com, he uses the simple motif of the flip chart, hand written, to punctuate his points as well as anybody ever has with PowerPoint or Keynote. You’ll see what I mean if you watch.

He boils it down to four simple points:

  1. Obsess over customers. Not competitors, not anything else, but customers. “Start there and work backwards.”
  2. Invent. “Any time we have a problem, we never accept either-or thinking.  We try to figure out a solution. You can invent your way out of any box. Invent on behalf of customers. It’s not just the big things, like Kindle, EC2, the cloud, but an inventive culture. It’s so many small things.
  3. Think long term. This is really critical. Most initiatives take 5-7 years before paying dividends for the company. The ability to think in five-year and seven-year timeframes is rare. It requires and allows a willingness to be misunderstood. Many inventions are misunderstood in the early innings.
  4. It’s always day one. There’s always more invention in the future. And new ways to obsess about customers.

The occasion is the acquisition of Zappos.com, which generates a lot of positive comments near the end.

Note: if you can’t see the video on this site, you can click here to go to the source on YouTube.