Kindle Review – Kindle 3 Review, iPad Review

As Amazon and Google battle in the realm of books, its worthwhile to dig a little deeper and see why this clash is important and why it might be just the first of many that’ll occur.

Is Amazon consciously trying to become WalMart Online?

Actually, Amazon already are WalMart. Fundamentally Amazon are moving towards -

1. Becoming the #1 retailer for everything. If you disagree, check out Amazon Fresh.
2. Becoming the marketplace i.e. even when you want to buy from Land’s End or Dunlop or HP you do it via Amazon.
3. Where possible (i.e. in books) take over as much of the buying process as possible. Kindles are fundamentally direct to customer channels.  

Amazon are basically moving towards complete control of all purchase actions. They are going to make WalMart look small.

Towards that end Amazon is encouraging a particular mindset in its customers -

1. The best customer service possible. 
2. The best prices so you don’t have to check elsewhere. 
3. All retailers at one place so you don’t have to check elsewhere. 
4. More and more range so you don’t have to leave.

Prime, Kindles, and a lot of other Amazon initiatives all revolve around this aim of becoming THE place to buy. And creating the mindset in customers that Amazon is the buying destination.

One crucial thing is that with Amazon customers know exactly what they are getting.

Is Google trying to become bigger than the Internet?

Google, on the other hand, is encouraging a different mindset because it has a different aim. What we know of its aims has been evolving -

1. Initially we thought it was to dominate search, and it did. 
2. Then it began to expand into being a portal and a producer of content and we believed it when it said it was only to protect its search business.  
3. Now, its becoming more and more apparent that Google don’t just want to be the beginning point for everyone’s Internet journey. Google want to become the Internet. And the Mobile Internet too.

Google wants you to live in GoogleNet.

When your aim is so huge you have to approach it very orthogonally. Thats why you see Google encourage a completely different mindset -

1. Things should be free and for the greater good.  
2. We ‘do no evil’ and you can trust us.  
3. More and more features for free.
4. We are focused on customers.

Google’s aim is so huge that they really, really need to have people trust in them and believe that they will not abuse their power. Also, they’ve seen what the Justice Department and the EU have done to Microsoft. So they know that being altruistic to a fault is the only way to transform the Internet and the Mobile Web into GoogleNet.

The crucial thing here is that most people have no idea what the free services are costing them. For that matter, they don’t understand that what they earn Google via ad-clicks is the basis for free everything.

The engine that is letting Google give away all this free stuff is the massive profits from search. However, they are beginning to realize that they need to find alternate revenue streams, and fast.

Which brings us to books.

Why is Google fighting Amazon over Books?

Of all the potential revenue streams Google has, books are one of the most appealing because -

1. Electronic Books are really, really convenivent to store and sell.
2. Movie Studios are too powerful. Ditto TV. Apple already owns music and the direct to customer channels. Video Games are also owned by direct to customer devices.
3. Publishers are dying out – means there is little resistance and often desperation.
4. There are 7 million orphan works that Google has scanned ready to sell for $10-$20 each. A huge untapped longer tail. 
5. They already have millions of people using Google Book Search. 
6. They have the huge pipeline of search users to channel into Google Books.   

It all adds up to a new revenue source that, while not as big as search, would be considerably big.

Which brings us to the HUGE importance of Kindles and Kindle Apps for various platforms.

The Kindle 2, Kindle for iPhone etc. are Amazon’s huge advantage over Google.

It doesn’t matter how  good people think Google is. If they own a Kindle or Kindle 2, 90%+ of their book purchases are going to be from Amazon.

Google are well aware of this, and that is why they are partnering with Sony. That is why, in direct opposition to the ‘greater good’ mantra, they are creating 500,000 ePub books that are available only for Sony Readers.

And it’s also why they’re striking up a book settlement with the Author’s Guild that would give them monopoly power over out of print books and the right to make money off of books that they have not produced. Its an opt-out and not an opt-in. So dead authors who have out of print books in copyright would have their works sold for the profit of Google and the Author’s Guild.

Fundamentally the Books War is really important for Amazon and Google.

Amazon is better placed as it is already gathering up the most lucrative book buyers. In addition Amazon doesn’t need the eBooks market as much as google does.  

Google need a new revenue stream desperately. Its really interesting that Google Books is the first product where Google are very actively selling something other than advertising or free. They’ve made it clear that orphan works will be sold – not given away and supported by ads.

For the moment, Amazon, and potentially Apple, stand in the way of Google being able to dominate books. That might be a very good thing.