Monday, April 25, 2011

The Best Tech Company Might Not Be Google or Apple...

Often considered in the second tier of Silicon Valley, Amazon deserves more respect.
Amazon is proving to be one of the most innovative companies in the tech industry.
Take its success with the Kindle.
When Amazon first unveiled its Kindle e-book reader, pundits were skeptical. E-books had been tried and failed before -- and Amazon wasn't a hardware company.
Stay your stream, the saying goes.
But Amazon has done a great job with the Kindle, making it far and away the biggest player in the e-book industry. And as tablets came on the scene, Amazon lowered the price of the Kindle to an entirely different tier -- tech-heads could easily afford to have both a tablet and a Kindle.
And there is reason to have both. While tablets are far more versatile, the Kindle does its one job better than anything else. Thanks to e-ink technology, Kindle's can be read anywhere, in any light, with no more eye strain than reading a book.
Plus, because e-ink is such a power sipper -- the system is more or less inactive except when a page changes -- the Kindle can go over a week without needing a charge. It's the perfect thing to take along on a vacation -- lasting the whole time without wires, and readable on the beach.
And, at $139, Amazon has consistently undercut its competition on price.
However, new threats are constantly emerging. Barnes and Noble's Nook e-reader, only $10 more than a Kindle, offers a color screen and a few other bells and whistles that are attracting some customers.
Meanwhile, as tablets continue to improve while simultaneously dropping in price, pressure is descending from above as well.
However, rather than standing still and seeing how the Kindle can weather these challengers, Amazon is innovating again.
Starting in May, it will offer a discounted Kindle with ads.
For $25 less, you get the same Kindle... just with unobtrusive ads appearing as screen savers, or as banners across the bottom of navigation pages.
Will this new product prove a success? Who knows -- the market will have to decide.
My personal belief -- the $25 discount won't be enough to lure many customers to an ad-subsidized version.
That doesn't mean it will be a failure though. Amazon is tinkering here -- and I'm betting they'll find a price point that does work. With the bonus of a new advertising revenue stream.
Quietly Expanding Into All Areas of the Web
Of course, Amazon isn't stopping there. It's becoming a force in a variety of areas.
  • Amazon's aggressively selling its MP3 wares, offering many complete albums for $5 or less. It's not anywhere near the size of iTunes -- but Amazon is making inroads.
  • Amazon is moving into the cloud -- offering all customers a couple gigabytes of free cloud storage, and free yearlong previews of larger cloud databases. If it hooks a number of people with larger cloud lockers, it may well become one of the premiere forces in Web 2.0 networks -- owning much of the virtual real estate where people store their personal songs, movies, pictures and documents. Already, it's a leader in this fledgling field. Now when you buy an album, you can just store it in the cloud, instead of worrying about downloads and syncs.
  • The Amazon eBookstore is the largest of its kind -- and, thanks to the enormous popularity of the Kindle, its availability on other devices and generally cheaper price points, Amazon is likely to hold this title for a long time.
If you only think of Amazon as a shopping portal, think again. For the past few years, Amazon has been aggressively branching into other online arenas -- and doing it well.
While Amazon is much-admired, it usually isn't put in the same class as Google and Apple. That's a mistake. It may "only" be in the top 20 websites visited -- but it's the only one of the top 20 that has a majority of visitors looking to spend money.
Put another way -- it's the Wal-Mart of the Web, only more agile, farther-reaching, and without the negative labor baggage. Ignore it at your peril.
Oh, and one other item you shouldn't ignore: four under-the-radar mining companies that are up 381%, 180%, 126% and 113%... with a long way to go. These companies don't mine for silver or gold; they dig up something much more rare. And if you act today, there's a chance you could still book gains thanks to the rarity of the substance they mine

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