Netflix Inc. shares closed at a near 10-week high today as rumors swirled that online commerce giant Amazon.com Inc. was looking to buy the 12-year-old online movie rental company.
Netflix rose $2.12 to $42.19 with a trading volume of 4.2 million, one of the highest in months.
A Bloomberg report quoted an analyst attributing the trading activity to "renewed takeover talk" surrounding Netflix, with Amazon at the center of the conversation.
But other analysts were skeptical.
"Adding another business that would essentially cannibalize from the moves they’re already trying to make just doesn’t make a whole lot of sense," said Steve Weinstein of Pacific Crest Securities.
"Amazon is ramping up digital distribution very quickly," he said. "They’ve obviously done a good job with e-books, and they’re making some progress with music. So I don’t think anyone’s that much farther down the road than they are."
Neither Amazon nor Netflix would comment, saying that they don't respond to rumors and speculation.
Both companies are big players in the online streaming business, where consumers can watch movies through special set-top boxes like those made by TiVo and Roku. Amazon, which charges for each viewing, tends to have newer, more popular films available for download, while Netflix streams a more limited selection of older films to its subscribers.
Netflix has a catalog of over 100,000 movies and television shows available by mail -- its primary delivery mechanism -- but streams only about 12,000 of those shows via its set-top software. Amazon has made at least 40,000 movies available for streaming.
Will a $60 price drop make more book lovers shelve their hardcovers for a digital display? Amazon hopes the answer is yes.
The Seattle-based online retail giant dropped the price today on its Kindle 2 e-reader to $299 from its recent price of $359. This new pricetag is a $100 drop from when Amazon introduced the original Kindle reader in 2007, when it gained a minor a cult following. Kindle 2, the second and current incarnation released six months ago in February, is about the width of a pencil and weighs about 10 ounces. It has enough memory to store more than 1,500 books. In addition, this version includes a somewhat controversial text-to-audio feature, plays MP3s music files and could hop onto the Internet over a 3G wireless connection, which is offered through an arrangement with Sprint.
Readers can wirelessly download books to the device and subscribe for a monthly fee to blogs, magazines and newspapers (including the Los Angeles Times) that will automatically download.
In May, Amazon unveiled the Kindle DX, a large-screen version targeting newspaper and magazine readers.
Amazon spokeswoman Cinthia Portugal told the Associated Press that the price cut, a classic electronics marketing strategy, is not simply a short-term promotion. "We've been able to increase the volume of Kindles we're manufacturing and decrease the cost of doing so," she said.
Amazon has not released figures on how many devices have sold or the revenue generated by sales of electronic books to the Kindle.
However, ThinkEquity analyst Ed Weller called the move smart business for a company that started out serving readers. "They are serving the most important component of their consumer franchise by enhancing that connection and facilitating future sales," he said.
The Cool-ER electronic reader in the color "blue sky." Credit: Interead
Intrepid techies and avid readers who want to have hundreds of books with them wherever they go have had very little choice on electronic readers. It's either Amazon's Kindle ($359) or Sony's Reader ($270 to $350).
Now, there's a new kid on the block -- the Cool-ER, made by Interead.com, a British startup called that appeared just five months ago. (Right now it's available only on the company's Coolreaders website, but Chief Executive Neil Jones said he's in talks with major U.S. retailers.) At $249, it's the lowest-priced reader thus far. It has the same screen size as its rivals and uses the same E-Ink display, but is lighter and smaller.
That's because the Cool-ER doesn't have a lot of the bells and whistles the Kindle and Reader do -- no accelerometer, no wireless Internet adapter, no Bluetooth, no 3G connection and no keyboard. That's led some reviewers to give it a thumbs-down.
"The device in and of itself doesn't really break any new ground," said Sarah Rotman Epps, an analyst at Forrester Research. "What's interesting about them is that they went from nothing to putting out a product in less than six months. It shows that the bar for entering this market is very low, and that we can expect to see a lot more competition in this space in the coming months."
That spells good news for electronic bookworms, who can look forward to lower prices, more innovation and a wider selection of devices, said Rotman Epps, who estimated that prices could drift below $200 by the end of next year.
"From the consumer perspective, pricing is really important," she said.
So is style. With a choice of eight colors, Cool-ER is hoping to tap into a segment of consumers who consider personalization and fashion a factor in their gadget purchase.
They must be relatives of the wolves on Three Wolf Moon T-shirt. Credit: star5112 via Flickr.
When it comes to T-shirts, ugly is in the eye of the beholder. You might love your human anatomy T-shirt that shows guts, while your girlfriend might be more partial to the bright orange behemoth she bought to wear to the Lakers game.
But it's hard to dispute that the Three Wolf Moon T-shirt would be at the top of anyone's ugly list. It shows three wolves howling at a moon that is tinged by some sort of green fog, which could just be wolf halitosis. Which is why it's a little surprising that it's the top apparel item on Amazon right now. It's been one of the top 100 bestselling Amazon apparel items for 18 days now. It even beat out Crocs and an ugly baby yoga T-shirt!
The shirt, made by a New Hampshire company called the Mountain, rocked to popularity after reviewers mock-plugged the shirt.
"After checking to ensure that the shirt would properly cover my girth, I walked from my trailer to Wal-mart with the shirt on and was immediately approached by women," one wrote. Another, who also gave it five stars, commented that "Unfortunately I already had this exact picture tattooed on my chest, but this shirt is very useful in colder weather." A third wrote that after he wore the shirt, he was more popular with the ladies and that he could "expect to be promoted to cashier soon."
Nearly 500 people have reviewed the shirt thus far, with 374 giving five-star reviews. Some bemoaned that five was not enough stars.
The Mountain at first wasn't sure what to make of the comments.
"Some say: 'Bad publicity is better than no publicity at all. We however disagree if it's at the expense of others in a Classist, Racist or Prejudice manner,' " it wrote in a posting on Amazon.
It seems to have capitalized on the reviews since then, though. Its website boasts that it's the home of the "hottest shirt on-line." Mountain promises a Four Wolf Moon T-shirt is coming soon. Whether sales of other products, such as the shirt picturing a dragon wrapped around a tree, or the one showing Native Americans with their faces painted with stars and strips, have skyrocketed too is unclear.
It makes you wonder though -- who would buy a T-shirt just because it's accompanied by an ironic review? Those who bought the shirt also looked at Zubaz striped pants and a tube of Uranium Ore, according to Amazon. Maybe these people just appreciate strange things. Ugliness is, after all, in the eye of the beholder.
Now you can read newspapers, textbooks and PDFs -- all for just $489!
That's because Amazon.com unveiled the third iteration of Kindle, its digital book reader, at a press conference in New York today helmed by CEO Jeff Bezos. Called Kindle DX, the device features a 9.7-inch screen, compared with 6 inches in the previous model, and the capability to store 3,500 books, up from the previous model's 1,500.
Being a digital bookworm doesn't come cheap, though. The $489 price tag is quite a bit higher than that of the $359 Kindle 2. The Kindle DX costs more than some netbook computers and as much as some big-screen TVs.
But it's a small price to pay for saving the newspaper industry, right? Amazon announced partnerships with the New York Times Co. and Washington Post Co. to deliver the New York Times, Boston Globe (if it's still around) and Washington Post on the Kindle DX to readers outside their subscription areas. They have to sign up for a long-term subscription to the newspapers to be eligible for the deal.
"We will extend our reach to our loyal readers who will more readily be able to enjoy their favorite newspapers," Arthur Sulzberger Jr., chairman of the New York Times Co., said in a release.
Other new features include a PDF reader and auto-rotation so that the Kindle can be read in portrait or landscape mode. It's one-third of an inch thick and has 3.3 GB of memory. The device is expected to ship this summer.
Amazon also struck a deal with colleges including Princeton University and the University of Virginia to make Kindle DX available to students this fall. The new model is more suited for reading textbooks, Amazon says.
Updated, 12:10 p.m.: Here's the take on the Kindle DX by Carolyn Kellogg at the LA Times' books blog, Jacket Copy.
Thanks to Amazon.com's Kindle, the e-book reader has gone from a niche curiosity to a mainstream, oft-cited technology in a little more than a year. But now buzz is snapping and crackling about a second wave of electronic readers coming down the pike to give Amazon a run for its undisclosed monies.
A post by Ars Technica pointed to the array of media interests rumored or reported to be entering the e-reader field -- from telecom heavies such as Verizon, AT&T and Sprint, to Barnes & Noble, to news companies such Rupert Murdoch'sNews Corp, Hearst, and the owners of the Detroit Free Press, the last two of which have faced crippling challenges to their print products. Upshot: More than a few big shots are betting that even if electronic readers can't print money, they can still make some.
But the possibilities really start to hit home when you watch these YouTube videos of laboratory-stage e-reader technology. Note that the following video of Plastic Logic's flexible screen is almost 3 years old.
This video of a Sony plastic color TV screen is 2 years old:
Also from 2007 is the following demo of a cellular device that contains an actual folding screen:
Put the pieces together and you have enough technology to build portable, flexible, touch-screen color reading devices -- just the sort of gadget that the publishing world needs. Both the Kindle and the iPod have suggested that it takes a new hardware platform to get people to pay for electronic content. You're not just buying the song or the book, it turns out, but the ability to consume it anywhere -- a value proposition that much bulkier computers still can't satisfy.
You've got interest from the distribution companies, and you've got a technology that's starting to become viable. A digital newspaper is now visible at the end of the tunnel. The problem is, there's also a train coming.
UPDATED, 3:03 p.m. Amazon spokesman Drew Herdener sent us the following statement, blaming the entire situation on a "cataloging error":
This is an embarrassing and ham-fisted cataloging error for a
company that prides itself on offering complete selection.
It has been
misreported that the issue was limited to Gay & Lesbian themed titles - in
fact, it impacted 57,310 books in a number of broad categories such as Health,
Mind & Body, Reproductive & Sexual Medicine, and Erotica. This problem
impacted books not just in the United States but globally. It affected not just
sales rank but also had the effect of removing the books from Amazon's main
product search.
Many books have now been fixed and we're in the process
of fixing the remainder as quickly as possible, and we intend to implement new
measures to make this kind of accident less likely to occur in the future.
-----
The unexplained de-ranking of books on Amazon.com this weekend kindled an inferno of Internet outrage, the likes of which is seen only a couple of times a year. Meanwhile Twitter has shown that if you're looking to start a righteous conflagration, there's no better way to quickly add ten thousand twigs to the fire.
Amazon now appears to be undoing the damage -- as of this writing the so-called "adult" books that were at the center of this controversy are now ranked again -- Mark Probst's "The Filly", Leslea Newman's "Heather has Two Mommies," and "Lady Chatterley's Lover" by D.H. Lawrence. (Bloggers have speculated that when a book loses its sales ranking, it becomes harder to find on the site.) Ranks have also been given back to a bunch of the other books on this list kept by the bloggers at Jezebel.
But for most of the day, cries of censorship, boycotts plans and petitions were flying around like dollar bills in a money tornado, characterized -- as in most mob frenzies -- by a striking absence of facts.
Blame Amazon for that. After more than a day of exceptionally bad PR, the online sales giant -- whose stated goal is to "be Earth's most customer-centric company" has said nothing except that their system had experienced a "glitch." "Glitch," of course, has entered the public relations lexicon as a synonym for "a bungle you'd like to sugarcoat by blaming it on computers." In this Twitterized world, Amazon's tortoise-like slowness is even more stark -- would it kill them to tweet one small update?
Meanwhile, the thousands of participants in the AmazonFail conversation are moving the mystery forward themselves. Earlier today, a LiveJournal blogger took credit for the situation, saying he'd used some simple programming to systematically catalog all gay and lesbian books in the Amazon database, then used that information to mount a feedback attack on the books in question: the idea being that if a book gets enough negative user feedback, it is automatically de-ranked.
Another LiveJournal blogger named Bryant Durrell took the first guy's programming code and showed that it didn't work. But both he and Bart Leib, a third LiveJournal blogger (I haven't seen this much LiveJournal since the other mass-deletion controversy) speculated that even if the phony bad guy didn't do it, the scandal still has the pungent aroma of online pranksterism. If there was indeed a way for determined saboteurs to flag books as inappropriate, it might have made sense for Amazon to remove the entries while it considered the merits of the complaints.
The problem is, there's no button to complain about a given book or product. Instead, users are offered the chance to leave text-based feedback for a product, a mechanism that would be much harder to manipulate with any real speed.
Well, anyway, we'll probably have our answer soon. We've just heard that Amazon is planning to release more information about the glitch.
The Reading Rights Coalition, a group that says it represents disabled readers, staged a protest today outside of the Authors Guild's New York offices. Its complaint: The guild's objections to the read-aloud feature of Amazon.com's Kindle 2 electronic book harms people with disabilities.
In February, the guild complained about the Kindle 2's text-to-speech function, which uses an electronic voice to recite text. The organization said then that the feature "presents a significant challenge to the publishing industry," suggesting that it could hurt the $1-billion market for audio books. Amazon, which introduced the second-generation Kindle in February, later backed off and said it would allow authors to disable the feature for their own titles.
Though that may have mollified some writers, it incensed another constituent -- people who can't read print because they are blind or learning disabled. The Reading Rights Coalition, whose members include the National Federation for the Blind and International Dyslexia Assn., maintains that the read-aloud feature should be available for all Kindle titles, which currently include more than 260,000 books and several dozen newspapers, including the Los Angeles Times.
The group organized this afternoon's rally, with protesters chanting such slogans as, "No need for greed, we want to read."
The guild issued a statement to the Associated Press, saying that the protest was "unfortunate and unnecessary." It did not return calls seeking further comment.
What if you don't want Google or Project Gutenberg to get their paws on your library, but still would like to scan your material onto hard drives so it isn't lost forever, like the books in the Royal Library of Alexandria, when fires come? Enter Atiz, a Los Angeles company that will create digital copies of your books without sharing them with anybody -- all for just $1,595 and up.
"It's an inexpensive solution that allows everyone to digitize their content and preserve it for prosperity," said Atiz President Nick Warnock, who, incidentally, was a contestant on the first season of The Apprentice.
It may make sense for some publishers to make digital copies of books without giving access to Google or Project Gutenberg. For example, Warnock said, the Conjuring Arts Research Center in New York turned down Google's request to scan its collection because its magician’s library is filled with trade secrets. If Google were to scan those books and puts them online, people anywhere could pull rabbits out of hats and turn each other into newts. That simply wouldn't do. So the research center bought a book scanner from Atiz to create its own private digital collection.
Amazon, in a bid to expand its book sales, this morning released a free application that lets iPhone and iPod Touch users read electronic books purchased at its online Kindle bookstore.
The software performs many of the same functions featured on Amazon's $359 Kindle 2 reading device released last month, including bookmarking, noting, highlighting and adjusting the font size, the company said. There are, however, several notable differences.
The iPhone application does not have the Kindle's read-aloud feature that garnered controversy when publishers and authors questioned whether the function violates audio book copyrights. The Seattle online merchant last week said it would let rights holders disable the feature.
The application also does not allow users to access the Kindle store directly from the application to shop among Amazon's selection of more than 240,000 electronic book titles. Instead, users must access the store via the phone's Web browser or from a computer.
Today's move could cut into sales of the Kindle device, but it also greatly expands the number of customers who can buy Amazon's books. Amazon has declined to disclose its Kindle sales, but analysts peg that number at fewer than half a million devices. Apple, by comparison, sold more than 13.7 million iPhones in 2008, according to ABI Research. That's not counting millions of iPod Touch devices also in consumers' hands.
But Amazon will have competition on those Apple devices. Lexcycle's free Stanza application lets readers read electronic books purchased at online merchants such as eReader and Fictionwise, which has its own application called eReader. Both eReader and Fictionwise have more than 60,000 electronic book titles, some of which are free.
Digital book sales surged 68.4% last year even as growth in the overall book publishing business fell 2.4%, according to the American Assn. of Publishers.
Depending on the model, your device features either a hard drive or flash drive that allows you to read and write files to it just like an external drive.
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