Kindle Review – Kindle Fire Review, Kindle 4 Review

AKA – Why Amazon and Google are sharing free books and releasing their free and paid titles for cell phones and mobile devices.

The human mind is a wonderful thing, and yet, whenever possible we are compelled to take shortcuts. We get 10 million+ data points a second, and it becomes imperative to use distortion, deleting, shortcuts, stereotyping and other means to simplify this incoming data. 

This means that in every area of life that we can simplify things, we do. There are a lot of design principles and advice that hint at this -

1. Keep It Simple Stupid or KISS.
2. Mark Cuban’s Path of Least Resistance.  
3. And many more.

This also means that we see -

1. Monopolies. One of the reasons that Starbucks is popular is because of its familiarity and the ability to get the same coffee everywhere.  
2. Brands – Its training people to link a brand to a decision. Google for search. Amazon for books, and so forth.  
3. People choose the default. It’s why people are not going to leave Windows unless Microsoft screws up spectacularly (and Windows 7 is really good – so it’s not going to happen this year). Its why Google doesn’t have to create a whole new search paradigm and keep innovating (I mean true innovation – not throwing in image search results and calling it universal search).
4. Companies paying PC manufacturers to have their software installed by default. Google pays $1 per toolbar install. Anti Virus companies pay $40-$50 dollars per PC. Microsoft and Google fight for the privilege to pay hundreds of millions of dollars to companies like Verizon to be the default search provider.

How the Power of the Default applies to Books

Amazon has been expanding from the destination to buy books to the destination to buy everything.

Google has been expanding from the destination for search to becoming the whole Internet.

When it comes to books and making money off of books, we get two companies that have arguably the greatest knowledge of user behaviour and trends. If the Power of the Default really is as powerful as the facts seem to hint at, then Amazon and Google are the companies best positioned to be painfully aware of it.

What Amazon and Google are really doing with free books and targeting mobile devices and cellphones is trying to establish -

1. Them-self as the default for Books. That when people think books, they automatically think Company X.  

There are two very good reasons to focus on free books -

1. The first is that the default becomes stronger if people think of you as the default for anything whatsoever related to books – reviews, free books, paid books – it all helps.        Note: It is crucial to also have paid products – otherwise you set the wrong expectations, and have to resort to doing ridiculous things like Facebook Beacon.  
2. The second is reciprocation. If you are getting your free books from Source A, and then have to buy a book, you’re much likelier to buy your books from Source A too.

And there are some important reasons to get into mobile -

1. Cell phones are expanding and although there are not very many actual purchases through cellphones for books, you are still establishing yourself as the default.
2. As more appropriate devices like netbooks become popular, you will begin to see mobile really take off. A 10 inch laptop that women carry in their purses could very well revolutionize shopping as we know it (women account for 75%+ of retail purchases). Imagine people actually going into stores and checking on-line at the same time and then making a purchase.
3. The Kindle shows that people when provided with an appropriate device make most of their purchases from the device, and actually purchase more than they did before.  

Amazon Vs Google – Race to become the Default for Books

I’m not sure if it is the danger of losing the mobile market or the fear of no longer being the default option for books that has compelled amazon to start offering free books in the Kindle Store and to release Kindle Books on cell phones.

However, its a crucially important decision. There is a very small leap from Google becoming the source of free books to Google becoming the source of all books. To protect their territory Amazon has to beat Google at its own altruistic, reciprocity based strategy (I just read Matt Ridley’s The Origins of Virtue last week – so thankfully people much smarter than me see this too).

Amazon is not ready to give up its powerful position of being the default option for books. In starting an all out war Google has finally picked a foe that has, arguably, a better understanding and insight into human on-line behaviour than it does. On top of that Amazon has got a better insight into how online customers actually spend their money – Google knows what advertisers pay it, which is an indirect approximation of what people are buying (although a very good one).

Amazon Vs Google is going to become a huge and hugely important war. In fact – I would not be surprised to see Google try a takeover given Amazon’s current market valuation.

Filed under: thoughts