What makes him powerful: Sixteen years after Jeff Bezos founded Amazon.com, the e-commerce juggernaut now ranks as America's largest online retailer, with annual sales revenues roughly three times larger than runner-up Staples. (Some credit goes to its aggressive mobile commerce efforts: In July 2010, Amazon said consumers worldwide ordered more than $1 billion in products via mobile device over the past 12 months.) But while Amazon remains a popular destination for the books, videos and CDs that first launched the company to prominence, in recent years it has shifted away from physical goods into digital media sales: Its Amazon MP3 music download service (the default music store on most Android smartphones) now makes up 12 percent of the U.S. digital music market--far behind Apple's (NASDAQ:AAPL) iTunes' 70 percent, but still growing. Rumors also persist that the company will introduce its own television and movie subscription platform, another direct assault on the iTunes digital media empire.
It's nevertheless the flourishing ebook space where Amazon's digital media impact is most profound. Amazon first introduced the Kindle platform in 2007--three years later, the ereader device is its bestselling, most gifted and most-wished-for product. The Kindle ebookstore offers more than 700,000 titles, including new releases and the vast majority of current New York Times bestsellers, most priced at $9.99 or less; this summer, Amazon said it now sells 143 Kindle ebooks for every 100 hardcover books. After the recent release of two new Kindle devices (one with built-in 3G support priced at $189, the other sans 3G at $139), Amazon reported that more new-gen Kindles were ordered in the first twelve weeks of availability than in the same timeframe following any other Kindle launch. Moreover, during that same period consumers ordered more Kindles than any other Amazon product. Kindle services now expand to smartphone platforms including iPhone, Android, BlackBerry and Windows Phone, and last month, Verizon Wireless (NYSE:VZ) began preloading the free Kindle ereader app across Android smartphones including Motorola's Droid 2 and Droid X.
Bezos' next move: An Amazon mobile app store. As of press time, Amazon.com has not yet formally announced the initiative, but multiple reports indicate that Amazon will roll out the effort in the imminent future. The storefront will offer both premium and free Android applications, awarding developers either 70 percent of the purchase price or "20 percent of the list price as of the purchase date," a stipulation presumably in place to dissuade developers from selling their software at a discount via competing stores. In addition, all applications will integrate DRM features to ensure they run solely on Amazon-approved devices.
Amazon's legitimacy as a serious rival to Google's Android Market (and other application storefronts) is clear. Android Market continues to pose major headaches for developers looking to distribute and bill for premium applications: Prior to a recent expansion, developers in only nine countries were able to offer paid apps via the store, with paid apps available for purchase in just 14 of the 46 countries it serves. On top of that, consumers must first register for a Google Checkout account to download paid Android applications, except in locations where operator billing is available. Not only does Amazon already accept payments in more countries than Google Checkout does, but the website attracts more than 71 million unique visitors per month, many with credit card billing information already stored in their user accounts. Amazon also excels at promoting and recommending products based on each consumer's browsing and purchasing history, a skill that seems even more noteworthy in light of the app discovery challenges that continue to hamper Android Market. In short, Amazon likely will offer a far more efficient and seamless customer experience for most if not all Android users--a consumer demographic that continues to grow with astonishing speed. The next chapter of Bezos' illustrious entrepreneurial career could be the most interesting to date. --Jason