Amazon founder and CEO Jeff Bezos loves to talk about the Kindle e-book reader. He's even got media mogul Oprah Winfrey pitching the device: "I'm telling you, it is absolutely my new favorite thing in the world," she recently said.
Every time I go to Amazon I am greeted with a huge Kindle ad that takes up most of the screen space. Amazon's computers know that I have seen this ad hundreds of times but they persist in showing it to me instead of products that are based on my viewing and purchase history and would have a higher probability of getting me to spend money.
At the same time, Amazon refuses to talk about the number of Kindles sold, but willingly discloses that the wireless device provides instant access to more than 185,000 books, blogs, newspapers, and magazines.
Apple, on the other hand, is happy to let the world know that 6.9 million iPhones and 11 million iPods were sold in the last quarter, and the iTunes catalog has 8.5 million titles.
One can only presume that Bezos worries that the sales numbers are not sufficiently stellar to share with the world. Disclosure of what could be perceived as lackluster Kindle or e-book sales would heap a lot of negativity on the fledgling device on Amazon, which pulled in $4.26 billion in its last quarter.
For Bezos, the Kindle is a second revolution. He started Amazon more than a decade ago as an online bookstore, and gradually added other product lines. As iTunes and Netflix took off, Bezos moved into digital music and movie delivery, and with the Kindle he is laying the groundwork to empty Amazon's warehouses of physical books.
During the Q3 earnings call, Bezos downplayed any cannibalization of print book sales by the Kindle: "Kindle's effect is additive to physical book units. Post the purchase of a Kindle, owners buy 1.6 times as many book titles and the same amount of physical books."
Reading his statement, it's apparent that Kindle buyers are already book lovers, and haven't yet weaned themselves off of print. But Bezos is very patient, and clearly willing to invest long term in his Google-like vision--digitize the world's information and sell it through Amazon.
Perhaps with Oprah's help and a new and improved version due next year, the Kindle will achieve escape velocity and Amazon can stop showing me the annoying Kindle ad and disclose how many units have been sold.
As for eliminating physical books from the warehouses, books are lagging music and video. The end of print is not near, but the writing is on the virtual wall. The economics of the Internet, as well as technology innovations such as improved virtual paper, instant translation, and always on, fast connections to a universe of knowledge indicate that Bezos is on the right track, just as he was in creating a virtual shopping mall for physical goods in 1994. And, he will have lots of company, or competition, as the digital age gets into full swing.
CARLSBAD, Calif.--Amazon.com founder and CEO Jeff Bezos kicked off the morning proceedings here at D6 after a night of polite carousing by industry luminaries. During the interview with D co-host Walt Mossberg, Bezos announced a streaming-video service and explained his foray into hardware with the Kindle e-book reader.
On the subject of video and music delivery, Bezos said, "We are working on a new version of video-on-demand, a for-pay streaming service we will release in the next couple of weeks. The streaming service will start instantly, and it's a la carte, for pay."
Regarding competing with Apple's iTunes services, Bezos said it is clearly in the self-interest of music companies to have competitors.
Walt Mossberg asks Jeff Bezos about the Amazon Kindle.
(Credit: Dan Farber/CNET News.com)The Kindle is clearly a passion for Bezos. It follows on his love for selling books online, which was the origin of Amazon, and developing a new market for digital content delivered over wireless networks.
"We base our strategy on customer needs instead of what our skills are...Customers will eventually need things that you don't have skills for, so (you) need to renew yourself with new skills," Bezos said. If Amazon doesn't extend into new product categories, the company will get outmoded, he said.
Bezos wouldn't disclose Kindle sales. "On a title-by-title basis, with 125,000 titles for Kindle, and you look at Amazon's physical sale of the same books, Kindle sales are more than 6 percent of the universe of 125,000 titles," he said. Amazon reduced the price of the $399 Kindle by 10 percent this week.
While Bezos said he was happy with the sales of the Kindle, the price cut and the heavy promotion of the device on Amazon's site could mean sales aren't spectacular. The Kindle could be a meaningful financial component in Amazon's business, Bezos said, but he didn't put a figure on the Kindle's contribution to annual revenue.
Regarding the fate of physical books, Bezos said the vast majority of books will be read electronically. Just as horses haven't gone away, books will be around, he quipped. "We see Kindle as an effort to improve the book, even though it hasn't changed in 500 years," he added.
"You can't ever outbook the book, so you have to do things that you can't do with a book, such as in-stream dictionary lookup, changing fonts, and wireless delivery of content in 60 seconds," Bezos said. "We have to build something better than a physical book."
Bezos said he did research into the smell of the book--glue, ink, and mildew. "We can never capture that," he said, adding that the container is not important; the narrative is. He wants to make long-form reading more frictionless so that people read more.
Mossberg asked Bezos about adding new features to the Kindle and its utility as a Web browser.
"There are things that fit into the Kindle form factor and don't interfere with the purpose of the device. But the device is not a cell phone or bunch of things. It should be able to browse the Web," he said. "If you were trying to build the perfect Web-browsing device, you wouldn't use electronic ink. It's not the right display technology for high-quality Web browsing."
"You might say the Web is the most important book in the world," he added, but that's not something the Kindle is designed to read as well as other devices.
Click here for full coverage of the D: All Things Digital conference.
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