The folks who run Amazon's EC2 cloud service must be happy the week is nearly over.
The cloud-based EC2 (Elastic Compute Cloud) was kept jumping this past week by two incidents: a compromised internal service that triggered a botnet, and a data center power failure in Virginia.
On Wednesday, security researchers for CA found that a variant of the infamous password-stealing Zeus banking Trojan had infected client computers after hackers were able to compromise a site on EC2 and use it as their own C&C (command and control) operation.
Don DeBolt, Director of Threat Research for CA Internet Security Business Unit, told CNET that the botnet first came to light while his firm was reviewing spam and found one with a URL for a piece of malware called xmas2.exe, described in a blog. After examining the file, DeBolt discovered it was a variant of the Zeus bot that was calling home to a computer inside Amazon Web Services, which houses EC2.
As a keylogger, Zeus is known to specifically capture bank account information, noted DeBolt, and was trying to perform the same crime in this case. The bot was also attempting to report the IP addresses of any clients that were infected via spam. The cybercrooks reportedly snuck their way into EC2 by gaining access through a site hosted on Amazon's service.
Once the bot was discovered, DeBolt and his team contacted Amazon to provide all the information from their client-based analysis. Since then, the files that were serving up the botnet on Amazon's side are no longer active.
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Apple has acquired struggling streaming music service Lala, an Apple spokesman told CNET News on Sunday.
Apple spokesman Steve Dowling confirmed the acquisition but did not disclose the terms of the deal or what the company intends to do with the 4-year-old Lala. The company scans users' hard drives and creates a duplicate music library that owners can access from Web-enabled devices. The company also sells songs for a dime each.
CNET News reported Friday that Apple was close to finalizing the sale and that one of the reasons Apple was interested in acquiring Lala is to obtain some of the company's payment and fulfillment systems, which a source with knowledge of the talks said could save Apple money.
However, it's unclear whether Apple may also be planning to launch some kind of streaming-music or so-called cloud storage feature.
The New York Times reported that Apple was approached by Lala after the company concluded that reaching profitability was unlikely. All Things Digital reported that Lala was acquired for a sum that meant a loss for its investors.
If things keep going this way, pretty soon there won't be any digital music space to cover. Many of the players around a year ago are gone: Ruckus and SpiralFrog closed. MySpace is gobbling up iLike and soon Imeem. Apple got Lala.
The frontrunners now appear to be Pandora, Amazon, Spotify, MySpace Music, Last.fm (owned by CBS, parent company of CNET) and Zune's Marketplace.
To this point, not one of them has generated the kind of market share to challenge iTunes.
(Updated 11.35AM PST Monday, with comment from Amazon)
There's a wonderful Borders bookstore in the middle of London's Oxford Street. Or at least there was. I went there in September and suddenly it was no more. Indeed, the U.K. arm of Borders recently reached for a form of bankruptcy protection.
So how interesting that one of the greatest successes in online book retail, Amazon, is rumored to be troubling real estate agents in its search for retail premises in the U.K. According to London's impeccable Times, Amazon is looking for very fine locations in order to, well, fulfill orders.
Perhaps some might find it a touch amusing that such a dot-com icon has decided to trouble the physical world. However, it appears that the British are suffering from frightful attacks of impatience while waiting for their erudite tomes, wickedly catchy tunes and other more substantial purchases to arrive by ponies that may be less than express.
The Times says that Argos, a U.K. catalog retailer of, oh, useful and useless stuff, has 18 percent of its online orders picked up in store. Indeed, the company believes that 50 percent of its holiday television sales will be transacted in this manner.
Amazon's customer service has become so progressive that its presence in American, as well as British, malls might serve as something of an inspiration to the more complacent establishments.
And now that Amazon seems to be able to sell you everything from woodworking equipment to vacuum cleaners, it surely puts extra pressure on postal services and that nice man in brown who comes to my house and always looks tired.
What a revolutionary concept it would be to go to a store and know that the thing you want is actually there. It just might catch on.
UPDATE: According to Reuters, Amazon denied Monday that it would open physical stores. However, the company would not comment on whether it might instead create partnerships with existing retailers, many of whom, Lord knows, could do with the business.
Some industry insiders told me that any potential steps towards physical retail by Amazon might be a reaction to the EU tinkering with distribution regulations.
The National Federation of the Blind is applauding the decisions of Syracuse University and the University of Wisconsin-Madison not to Amazon.com's Kindle DX as a textbook replacement.
Kindle DX
(Credit: Amazon)The universities cited the Kindle's inaccessibility to the blind as the problem.
The federation said Wednesday that while it appreciates the Kindle's text-to-speech feature, the "menus of the device are not accessible to the blind...making it impossible for a blind user to purchase books from Amazon's Kindle store, select a book to read, activate the text-to-speech feature, and use the advanced reading functions available on the Kindle DX."
For its part, Amazon believes in the Kindle's potential. An Amazon spokesperson wrote in an e-mail that "With a few modifications, Kindle has the potential to be a true breakthrough product for the blind, and we're already working on it. We're excited about it."
According to the federation, the University of Wisconsin-Madison experimented with the Kindle in upper-level history classes.
"The big disappointment was learning that the Kindle DX is not accessible to the blind," Ken Frazier, the University of Wisconsin-Madison director of libraries, said in a statement. "Advancements in text-to-speech technology have created a market opportunity for an e-book reading device that is fully accessible for everyone. This version of the Kindle e-book reader missed the mark."
Frazier added that a suitable device would include better "accessibility, higher-quality graphics, and improved navigation and note-taking. I think that there will be a huge payoff for the company that creates a truly universal e-book reader."
Pamela McLaughlin, director of communications and external relations at Syracuse University, said in a statement that her school bought two Kindle DX units to see if it could replace hardcover textbooks and course materials.
Although students are still evaluating the devices, she said, the university has "no plans to purchase any more of these units in light of the fact that they are inaccessible to blind students. If Syracuse University decides to use e-book technology on campus, we will require technology that can be used by all of our students, including those who are blind."
Marc Maurer, president of the National Federation of the Blind, said his organization commends the universities' rejections of "broad deployment of the Kindle DX in its current form because it cannot be used by blind students and therefore denies the blind equal access to electronic textbooks."
Mauer pointed out that the federation does not oppose electronic textbooks and believes that "they hold great promise for blind students if they are accessible."
Updated at 10:14 a.m. PST to include Amazon comments.
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Don Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.
Kindle book buyers can now read their books right from their PCs without having to buy a Kindle reader.
Amazon onTuesday made available its new Kindle for PC, free software that lets Kindle customers read their e-books on tablet PCs, Netbooks, notebooks, and other personal computers.
The software can be downloaded from the Kindle for PC page. The quick installation sets up the reader application, prompting you to log in and register with your Amazon account or create a new one. After logging in, you can download books that you've already purchased at the Kindle store or click on a link to buy new ones.
Microsoft had demonstrated the Kindle for PC software at its Windows 7 launch event in New York last month.
(Credit:
CNET News/Lance Whitney)
Kindle for PC offers many of the options you'll find on a Kindle reader. You can increase or decrease the size of the font and change the width of the page and words per line. You can navigate from one page to another by clicking on the Next or Previous Page arrows or by using the scroll wheel on your mouse. You can jump to a specific page, such as the cover, table of contents, or last page read, and bookmark a specific location for future reference. You can also read notes and highlights created on your Kindle device, but you can't create them on Kindle for PC yet.
People with a Windows 7 multitouch PC can zoom in or out of a page by pinching it with your fingers.
Amazon has also tapped its Whispersync technology to automatically save and sync bookmarks across multiple devices. So you can read a book up to a certain page on your Kindle device and then automatically jump to that same page on your PC to resume reading where you left off.
"Kindle for PC is the perfect companion application for customers who own a Kindle or Kindle DX," Ian Freed, vice president, Amazon Kindle, said in a statement. "Kindle for PC is also a great way for people around the world to access a huge selection from the Kindle Store and read the most popular books of today even if they don't yet have a Kindle."
Amazon plans new features for the next edition of Kindle for PC. The company said it will offer the ability to create notes and highlights, search for words or phrases in your books, and click on an image to zoom in or rotate it.
With the launch of Kindle for PC, Kindle books can now be read on Kindle readers, the iPhone, the iPod Touch, and personal computers. Kindle for the PC is compatible with Windows 7, Vista, and XP. A Mac version is coming soon, promises Amazon.
Amazon Associates is the partner program the company uses as part of its affiliate advertising programs, allowing customers to make money advertising Amazon products.
Associates can now simply click a link in the toolbar to send a link (replete with sales-y text) to Twitter as part of their shopping and selling experience. Amazon gets a sale, Twitter gets traffic, and the associate gets revenue share. What could possibly go wrong?
Linking to Amazon or other online retailers is obviously nothing new, though Amazon has been particularly successful in using its link networks for both sales and to garner higher Google rankings for organic advertising.
This new program does introduce an issue related to link fraud, where spammers and scammers leverage URL-shortening services for spam links. Currently there is no way to verify that the link you click actually goes to Amazon. It's a bit surprising that it decided to use an URL-shortener that it doesn't own, though I suppose the network effect of the URLs helps perpetuate the life of the links.
There is also a risk of nondisclosure wherein in Twitter users attempt to push products that offer some kind of gain to them that they don't clearly state to you. While I understand the argument for disclosure on blogs and media in general, Twitter remains a playground for people to post whatever they want. I highly doubt all the celebrities with accounts would bother wasting their precious time if they weren't posting for their own gain.
Interestingly, there is no mention of whether Twitter is an Amazon Associate, suggesting that Twitter won't see any of the revenue share. I'd like to think that they cut a deal that gives them a piece of the pie, but to date we haven't seen Twitter monetize itself too effectively.
Twitter is quickly becoming the flash news vehicle for everything from news alerts to product placement. And based on a very quick review of my Bitly account, Twitter users just love to click on links. But, I still have to wonder if Twitter will ever get beyond its current role as a marketing tool?
Amazon's acquisition of shoes-and-more retailer Zappos is complete, the e-commerce giant said in a release Monday. The company in July had announced its intent to make the purchase, for about $850 million in cash and stock.
Zappos, which made a name for itself based on outside-the-box customer service principles, will stay independent from the Amazon.com brand and will continue to operate out of its Las Vegas headquarters.
Numbers released by J.P. Morgan Research in conjunction with the acquisition announcement predict that Zappos will post moderate, single-digit growth for the 2009 fiscal year after raking in $635 million in revenues last year.
A simple phrase and pin code may be all you need the next time you pay for that book or CD at Amazon.
The online retailer on Thursday debuted a new feature called Amazon PayPhrase, designed to let busy shoppers store their name, address, and payment information in a single phrase and pin code. Instead of entering all that data at the online checkout counter, you type your phrase and pin number when it's time to cough up the cash.
PayPhrase doesn't just work at Amazon--it can be used at any online retailer that lets you pay via Amazon Payments. That covers a range of cyberstores, including Buy.com, J&R Electronics, DKNY, and Car Toys.
PayPhrase also omits the need for a user name and password to store your personal info on every shopping site that uses Amazon Payments. However, you will need an Amazon.com account to set up and maintain your phrase.
Amazon sees PayPhrase as a benefit to consumers trying to juggle different accounts at different retail sites.
"PayPhrase solves the headache of trying to keep track of all the different user names and passwords people use to shop on various sites across the Web," said Matt Williams, general manager of Amazon PayPhrase, in a statement. "With PayPhrase all you need is one phrase and one PIN to pay online."
Here's how the process works:
- You first set up your PayPhrase. The phrase can be two or more words, and the entire phrase must be at least four characters but no more than 100. Amazon provides a list of suggested phrases, or you can create your own. (With Amazon's suggested phrases of "Unusually Obese," "Contraceptive Cream," and "Bush's Education Department," you might want to create your own.) Since everyone's PayPhrase must be unique, Amazon will tell you whether or not your phrase is taken.
- You set up your four-digit pin number.
- You enter your Amazon.com user name and password.
- You either confirm or enter your mailing address and credit card information.
- After your PayPhrase is set up, you'll receive an e-mail from Amazon confirming the details.
- The next time you check out to buy an item on Amazon or an Amazon Payment retailer, a field for PayPhrase Express Checkout will appear. You enter your phrase. You then review your order details and total cost and finally enter your pin number to submit the purchase.
Of course, a feature like this always shouts out one question: Is it secure? Amazon naturally believes so.
Though Amazon stores your credit card information, the company points out that your payment information is not shared with other online retailers. And to modify your PayPhrase settings, you have to log in to the PayPhrase site with your Amazon.com username and password.
You can establish monthly cash limits on your account ranging from $10 to $500. Finally, you can opt to receive an approval request by e-mail or cell phone for all orders that are placed.
Check out Amazon's promo video page for a brief tour of PayPhrase.
Amazon.com is apparently shelving its planned effort to sell wine online.
A little more than a year after word of the effort trickled out, a senior Amazon account manager told wineries about the decision to cork it in an e-mail last week.
"As you know, we were excited to work with you to build the AmazonWine business," Dini Rao said in an e-mail first reported by WineBusiness.com. "For that reason, this was a very tough choice for us. Many of you took the time and leap of faith to really support us."
Amazon representatives did not immediately respond to requests for comment.
Word of the effort leaked out in September 2008 when a nonprofit vintner group announced it had partnered with Amazon to drum up interest from its members to sell wine through the retail giant. However, its fulfillment partner New Vine Logistics briefly suspended operations this summer before securing additional financing from Inertia Beverage Group.
Since the Supreme Court ruled in May 2005 that states must grant the same shipping rights to out-of-state and in-state wineries, winery-to-consumer shipping has become legal in 35 states, according to wine advocacy group Free the Grapes. But state laws governing direct wine shipping vary greatly, creating an onerous task in managing compliance.
Amazon had dabbled in the wine business before, investing $30 million for a 45 percent share in Wineshopper.com in 1999, a start-up that was acquired by Wine.com in 2000 before going through a series of layoffs. Wine.com has a storefront on Amazon, through which it sells gourmet food baskets but not wine.
You wouldn't know there's been a slowdown in consumer spending by looking at Amazon.com and Netflix.
Both companies have continued to grab customers at a record pace, leading to higher earnings and sales for their third quarters.
Net income for Amazon jumped 68 percent to $199 million, or 45 cents a share, in the quarter that ended September 30, compared with $118 million, or 27 cents a share, in the prior year's quarter.
Sales rose 28 percent to $5.45 billion versus $4.26 billion in 2008's third quarter, the company said Thursday.
Amazon's stock shot up $23.75, or 25 percent, to $117.29 in Friday trading.
Amazon's two-year stock chart.
(Credit: Yahoo Finance)Amazon attributed its earnings to several key factors.
Chief Financial Officer Tom Szkutak said Thursday in a conference call with reporters that consumers continue to spend at Amazon because of its low prices and large selection. The company noted that it had 98 million customer accounts by the end of the third quarter, 17 percent higher than a year ago.
Worldwide sales from books, CDs, DVDs, and other media grew 17 percent to $2.93 billion, while revenue for electronics and other general merchandise soared 44 percent to $2.36 billion.
Another solid driver for growth was the Amazon e-book reader, Kindle.
"Kindle has become the No. 1 bestselling item by both unit sales and dollars--not just in our electronics store but across all product categories on Amazon.com," Amazon CEO Jeff Bezos said in a statement. The company did not release specific sales figures for the Kindle.
Amazon managed to clobber analysts' expectations. J.P. Morgan had forecast earnings per share of 31 cents on sales of $5 billion. Broadpoint.Gleacher analyst Ben Schachter had been eyeing earnings per share of 33 cents and said that sales were 7 percent higher than he expected.
In a report, J.P. Morgan said Amazon's strong sales growth shows that the company is grabbing significant market share from other e-commerce players, such as eBay.
In his report, Schachter called the results "phenomenal." He noted that Amazon was able to keep its costs in check while gaining market share in virtually every product category. The analyst also said he was "shocked" to hear Bezos' statement that the Kindle has become the company's top-selling item.
For the current quarter, Amazon is looking for sales of $8.13 billion to $9.13 billion, 21 to 36 percent higher than last year's fourth quarter, and racing past analysts' estimates of $8.11 billion.
Collins Stewart analyst Sandeep Aggarwal said in a report that improving e-commerce trends and continued growth for the Kindle, among other factors, could make Amazon the fastest growing large-cap Internet stock.
Another beneficiary of solid customer growth, Netflix also surpassed analysts' expectations for the third quarter.
The company's earnings jumped 48 percent to $30.1 million, or 52 cents a share, versus $20.4 million, or 33 cents a share in the prior year's quarter. Sales grew 24 percent to $423.1 million, compared with $341.3 million in 2008's third quarter.
Overall, analysts had been expecting earnings of 46 cents per share on sales of $420 million.
Growth in subscribers was the key driver for Netflix in the third quarter. The company ended the quarter with around 11.11 million subscribers, a 28 percent jump from the 8.67 million subscribers at the end of 2008's third quarter. Of the current total, 98 percent, or 10.84 million, were paid subscribers, while the remaining 2 percent were free subscribers.
"Our business momentum is strong and our third quarter performance keeps us solidly on course for a record 2009," Netflix co-founder and Chief Executive Officer Reed Hastings, said in a statement.
Though most Netflix customers still prefer to get their movies by conventional mail, Internet streaming has gradually taken off. In the third quarter, 42 percent of Netflix subscribers streamed at least 15 minutes of video, compared with only 22 percent in the prior year's quarter.
Customers can stream their Netflix picks not just through the PC but via gadgets like Microsoft's Xbox 360, which has helped attract new customers.
Now Netflix has reportedly struck a deal to add streaming to another device, which Hastings said is already in people's homes. Though the company has been mum about details, analysts believe it may be a video game console made by either Sony or Nintendo.
Netflix shares were up $4.58, or 9 percent, to $54.22 on Friday.
For the fourth quarter, the company believes customer growth and sales will be higher than anticipated three months ago. Netflix now expects to end the current quarter with 12 million to 12.3 million subscribers, up from the prior estimate of 11.6 million to 12 million. That would represent an additional 900,000 to 1.2 million customers.
Fourth-quarter sales are likely to reach $440 million to $446 million, up from the previous estimate of $431 million to $445 million.
However, the company forecasts a downturn in earnings from the third quarter, eyeing fourth-quarter net income of $21 million to $26 million, or 38 cents to 47 cents a share.
Expenses may be one factor affecting current earnings. Hastings said the company expects to spend more on marketing and licensing fees for Internet streaming. Netflix also believes its postal costs will continue to grow, surpassing $600 million next year and $700 million in 2011.
