EBay’s Strategy for Taking On Amazon

The passenger door opened, and out sprang John Donahoe, the chief executive of eBay, who began striding toward the store. It was earlier this year, and from the outside the Westfield Valley Fair mall near San Jose had a kind of ghost-town feel to it. But Donahoe thinks he can change that. As he walked from store to store — a nearly empty GNC, a quiet Foot Locker — he pointed out how little had changed in physical retail stores over the last 30 or 40 years and what would have to change in the next few years in order for these stores to compete with Amazon and Walmart.

As he sat in a patisserie on the mall’s ground floor, Donahoe touched on his usual themes: how technology has driven scale and automation; how the big-box retailers have crushed Main Street; the way in which our shopping experiences have become less dependent on human interaction. And these changes in the commercial landscape, he said, tend to be ‘‘phrased in zero-sum terms: big retailers versus the little guy. Local versus global. The Chinese imports will kill you. Online is going to disrupt offline.’’ 

There has been much talk about Amazon driving retailers out of business — most recently, and somewhat unbelievably, by proposing to use drones to deliver purchases. For some time now, physical retailers have lived in fear of the various ways in which Amazon can undercut them. If you’re looking for a product that you don’t need to try on or try out, Amazon’s customer analytics and nationwide network of 40-plus enormous fulfillment centers is awfully tough to compete with. And even if you do need to try something on, Amazon conveniently includes a bar-code scanner in its mobile application so you can compare prices while you’re in a store and then have the same item shipped to your home with just a few clicks. (Retailers call this act of checking out products in a store and then buying them online from a different vendor ‘‘showrooming.’’) Amazon holds such sway that for many it’s the default place to buy things online.

And yet online commerce currently accounts for only about 6 percent of all commerce in the United States. We still buy more than 90 percent of everything we purchase offline, often by handing over money or swiping a credit card in exchange for the goods we want. But the proliferation of smartphones and tablets has increasingly led to the use of digital technology to help us make those purchases, and it’s in that convergence that eBay sees its opportunity. As Donahoe puts it: ‘‘We view it actually as and. Not online, not offline: Both.’’ 

Most people think of eBay as an online auction house, the world’s biggest garage sale, which it has been for most of its life. But since Donahoe took over in 2008, he has slowly moved the company beyond auctions, developing technology partnerships with big retailers like Home Depot, Macy’s, Toys ‘‘R’’ Us and Target and expanding eBay’s online marketplace to include reliable, returnable goods at fixed prices. (Auctions currently represent just 30 percent of the purchases made at eBay.com; the site sells 13,000 cars a week through its mobile app alone, many at fixed prices.)

Under Donahoe, eBay has made 34 acquisitions over the last five years, most of them to provide the company and its retail partners with enhanced technology. EBay can help with the back end of websites, create interactive storefronts in real-world locations, streamline the electronic-payment process or help monitor inventory in real time. (Outsourcing some of the digital strategy and technological operations to eBay frees up companies to focus on what they presumably do best: Make and market their own products.) In select cities, eBay has also recently introduced eBay Now, an app that allows you to order goods from participating local vendors and have them delivered to your door in about an hour for a $5 fee. The company is betting its future on the idea that its interactive technology can turn shopping into a kind of entertainment, or at least make commerce something more than simply working through price-plus-shipping calculations. If eBay can get enough people into Dick’s Sporting Goods to try out a new set of golf clubs and then get them to buy those clubs in the store, instead of from Amazon, there’s a business model there. 

A?key element of eBay’s vision of the future is the digital wallet. On a basic level, having a ‘‘digital wallet’’ means paying with your phone, but it’s about a lot more than that; it’s as much a concept as a product. EBay bought PayPal in 2002, after PayPal established itself as a safe way to transfer money between people who didn’t know each other (thus facilitating eBay purchases). For the last several years, eBay has regarded digital payments through mobile devices as having the potential to change everything — to become, as David Marcus, PayPal’s president, puts it, ‘‘Money 3.0.’’

Jeff Himmelman is a contributing writer for the magazine and the author of “Yours in Truth: A Personal Portrait of Ben Bradlee.”

Editor: Dean Robinson

Bits Blog: Europe vs. Amazon: Anger Rising

Bits Blog: Amazon Web Services Gets Personal and Pretty

Bits: Amazon Updates Kindle Fire Line

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Bits Blog: A New Role for Amazon: An Engine for Jobs

Amazon Reports Small Loss as It Focuses on Investments

But with revenue up 22 percent, Amazon showed that it could still deliver the sales growth demanded by investors, who have lifted the company’s stock 21 percent this year. So far, those demands do not include an insistence on big profits.

Until it does, Amazon seems content to pour money into initiatives aimed at gobbling up an increasing share of spending by consumers.

For the quarter that ended June 30, Amazon said it had a net loss of $7 million, or 2 cents a share, compared with net income of $7 million, or a penny a share, in the same period a year earlier. Amazon’s revenue was $15.7 billion, up from $12.83 billion the year before.

The results were slightly below the estimates of analysts surveyed by Thomson Reuters, who expected Amazon to report earnings of 5 cents a share and revenue of $15.73 billion.

The miss did not seem to trouble investors too much. The company’s stock dropped less than 2 percent in after-hours trading after the release of its earnings report.

A good illustration of Amazon’s long-term bets is online video. The company is spending hundreds of millions of dollars on licensing rights to build a large library of video that its customers can watch through their Kindle tablets and other devices. These agreements are critical as movies, music and other media — which account for 28 percent of Amazon’s total sales — shift from physical to digital form.

The company recently cut its biggest such deal ever, with a multiyear agreement to license television shows from Viacom, including children’s shows like “Dora the Explorer” and “SpongeBob SquarePants.”

As a result, Amazon spent almost 47 percent more on technology and content in the quarter, for a total of $1.59 billion — roughly 10 percent of its total revenue. Included in that spending is the company’s investment in Amazon Web Services, a lucrative business through which Amazon rents capacity in its data centers to independent companies.

“We’re investing for the large opportunities we have in front of us,” Tom Szkutak, the company’s chief financial officer, said in a conference call.

While Amazon is feared as a seller of physical goods, it faces several formidable rivals in the digital content business, including Netflix, Apple, Hulu, Microsoft and Google.

Still, Amazon is also spending aggressively on the warehouses it needs to deliver physical goods, building them in locations that have been inching ever closer to big cities with the goal of offering next-day, or even same-day, deliveries to shoppers. This year, Amazon began selling groceries in the Los Angeles area, using its own trucks to shuttle fruit, meat and boxes of cereal from a new warehouse in the city to customers’ doorsteps.

The effort is expensive and risky, though Amazon would not say whether or how much money it was losing on it. The grocery business has killed Internet retailers before — Webvan was the most notable casualty — so Amazon chose not to expand the service beyond a test in Seattle until recently.

“The challenge we’ve had over the past several years is how to make it economically viable,” Mr. Szkutak said.

All the spending on warehouses and other projects has led to a surge in hiring at the company. Its head count swelled to 97,000, up more than 40 percent from 69,000 a year ago. The hiring earned the company a plum position as the backdrop for a speech on middle-class jobs that President Obama is expected to deliver on Tuesday at an Amazon warehouse in Chattanooga, Tenn.

A big part of Amazon’s allure for investors remains its pre-eminent position in e-commerce, which is expected to rise 14.8 percent to $248 billion in American sales this year, according to eMarketer. That is far better growth than the single-digit growth expected for retail sales over all in the United States this year.

Kerry Rice, an analyst at Needham & Company, said investors believed that Amazon could keep stealing market share from Walmart and other physical retailers, and that eventually its profits would improve.

“On some level, I think some people are buying the stock because they’re hoping for that investment cycle to begin to reduce,” Mr. Rice said. “If they pull back on spending, you’re going to see that operating margin tick up.”

Mr. Rice added: “I don’t think that’s going to happen for a long time.”

Bits Blog: Amazon Rejected as Domain Name After South American Objections

Mauricio Lima for The New York Times A group of Latin American countries, including Brazil, Argentina, Chile, Peru and Uruguay, argued that the “.amazon” domain was too intrinsically connected to the regions and communities within their borders to allow the online retailer access to use it.

A group of Latin American countries appears to have succeeded in an effort to block Amazon, the online retailer, from using. amazon as a new suffix for Internet addresses.

A committee of the Internet Corporation for Assigned Names and Numbers, an international governance group for the Internet, recommended this week that. amazon not be approved for use as a so-called global top-level domain — the letters that follow the dot in Internet addresses.

At a meeting in Durban, South Africa, Icann reviewed applications for new domain suffixes like these in what has been billed as the biggest expansion of Internet addresses. Scores of companies, countries and organizations have applied to use their names or other terms as global top-level domains, alongside the handful of existing ones like .com and .org.

While Icann has approved several new dot-terms, including the Chinese word for game and the Russian word for network, English-language brand names derived from geographical locations have proved to be more complicated.

In the run-up to the Durban meeting, a group of Latin American countries, including Brazil, Argentina, Chile, Peru and Uruguay, sent a letter to Icann, in which they argued that. amazon should be rejected because a river runs through it.

“In particular ‘. amazon’ is a geographic name that represents important territories of some of our countries, which have relevant communities, with their own culture and identity directly connected with the name,” the letter said. “Beyond the specifics, this should also be understood as a matter of principle.”

The group had also objected to another application, from the outdoor clothier Patagonia, to use its name as an address suffix. That application was withdrawn before the Durban meeting.

The decision on. amazon, by the Governmental Advisory Committee of Icann, is not necessarily final. The Icann board could overrule the committee, though in practice it rarely does so.

“We’re reviewing the G.A.C. advice and we look forward to working with Icann and other stakeholders to resolve these issues as the process moves forward,” Amazon said in a statement.

One thing that remains unclear is why the United States government, represented in the Government Advisory Committee by the National Telecommunications and Information Administration, an arm of the Commerce Department, went along with the decision.

The administration did not immediately respond to a request for comment. Before the meeting, it sent a letter to Icann in which it outlined its support for the use of names like. amazon as Internet suffixes, but added that it would stand aside if other governments objected.

“The United States affirms our support for the free flow of information and freedom of expression and does not view sovereignty as a valid basis for objecting to the use of terms, and we have concerns about the effect of such claims on the integrity of the process,” the administration said in the letter. “However, in the event the parties cannot reach agreement by the time this matter comes up for decision in the G.A.C., the United States is willing in Durban to abstain and remain neutral.”

One analyst said that while the specific reasons the United States government went along with the rejection were unclear, its position on Internet governance issues had been weakened by the recent leaks of information about a vast digital surveillance program by the National Security Agency. Several countries in South America — though not those in the Amazon basin or the Patagonian region — have offered the leaker, Edward J. Snowden, asylum.

“It is clear that the leaks of sensitive national security information have severely weakened the U.S. government’s ability to fight for our economic interests and have left the U.S. isolated in the G.A.C.,” said Nao Matsukata, chief executive of FairWinds Partners, a Washington-based consulting firm that specializes in domain name strategy.

Milton Mueller, a professor at the Syracuse University School of Information Studies, said there might have been an element of horse-trading. By yielding to a broader consensus on the advisory committee, Washington could have been seeking to shore up broader support for Icann, whose control over the Internet address system has long irked the governments of countries like Russia and China.

“My hypothesis is that the U.S. government has been scared to death for some time that if G.A.C. doesn’t get enough of what it wants, governments will give up on the whole Icann regime,” Mr. Mueller said.

E-Book Ruling Gives Amazon an Advantage

A federal judge ruled on Wednesday that Apple had illegally conspired with five of the six biggest publishers to try to raise prices in the budding e-books market.

The decision came two days after Barnes & Noble lost its chief executive and said it would not appoint another, signaling that the biggest chain of physical bookstores could be immediately broken up.

The verdict in the Apple case might have been a foregone conclusion, telegraphed by the judge herself, but it emphatically underlined how the traditional players in the book business have been upended. Only Amazon, led by Mr. Bezos, seems to have a plan. He is executing it with a skill that infuriates his competitors and rewards his stockholders.

“We’re at a moment when cultural power is passing to new gatekeepers,” said Joe Esposito, a publishing consultant. “Heaven forbid that we should have the government telling our entrepreneurs what to do, but there is a social policy issue here. We don’t want the companies to become a black hole that absorbs all light except their own.”

The Apple case, which was brought by the Justice Department, will have little immediate impact on the selling of books. The publishers settled long ago, protesting they had done nothing wrong but saying they could not afford to fight the government. But it might be a long time before they try to take charge of their fate again in such a bold fashion. Drawing the attention of the government once was bad enough; twice could be a disaster.

“The Department of Justice has unwittingly caused further consolidation in the industry at a time when consolidation is not necessarily a good thing,” said Mark Coker, the chief executive of Smashwords, an e-book distributor. “If you want a vibrant ecosystem of multiple publishers, multiple publishing methods and multiple successful retailers in 5, 20 or 50 years, we took a step backwards this week.”

Some in publishing suspected that Amazon had prompted the government to file its suit. The retailer has denied it, but it still emerged the big winner. While Apple will be punished — damages are yet to be decided — and the publishers were chastened, Amazon is left free to exert its dominance over e-books — even as it gains market share with physical books. The retailer declined to comment on Wednesday.

“Amazon is not in most of the headlines, but all of the big events in the book world are about Amazon,” said Paul Aiken, executive director of the Authors Guild. “If the publishers colluded, it was to blunt Amazon’s dominance. Barnes & Noble’s troubles may stem from a misstep with its Nook tablets, just as Borders’ bankruptcy might have been hastened by management mistakes, but its precarious position is that of any rent-paying retailer facing a deep-pocketed virtual competitor.”

Last week, Penguin and Random House officially merged, creating a publishing behemoth that might be able to determine its future rather than suffer the fate of Barnes & Noble, a once-swaggering entity that now seems adrift. Random House was not a target of the Justice Department; Penguin was.

Penguin and Random House were innovators who made paperbacks into a disruptive force in the 1940s and ’50s. They were the Amazons of their era, making the traditional book business deeply uneasy. No less an authority than George Orwell thought paperbacks were of so much better value than hardbacks that they spelled the ruination of publishing and bookselling. “The cheaper books become,” he wrote, “the less money is spent on books.”

Orwell was wrong, but the same arguments are being made against Amazon and e-books today. Amazon executives are not much for public debate, but they argue that all this disruption will ultimately give more money to more authors and make more books more widely available to more people at cheaper prices, and who could argue with any of that?

This was not a prospect that many on Wednesday were putting much faith in.

Amazon, its detractors argue, is not a nonprofit or public trust but a hard-nosed company whose investors hope will make lots of money someday soon. It shares closed Wednesday at $292.33, a record.

“The Justice Department’s guns seem pointed in the wrong direction,” Mr. Aiken said.

But the more pressing concern for the industry is the fate of Barnes & Noble. When Borders collapsed two years ago, analysts said there was an unexpected consequence to the loss of 400 stores: the e-book growth rate began to taper off, as readers could no longer examine new titles before ordering them from Amazon.

E-books, in other words, were not a magical technology that could shed all the existing infrastructure of publishing. They needed the existing ecosystem.

“If all of those corporate outlets vanish, there is suddenly a hell of a lot less space devoted to showcasing a large number of titles,” said J. B. Dickey, owner of the Seattle Mystery Bookshop. “We’ll probably see a continuing shrinking in print runs, maybe fewer titles published, fewer authors published and the New York houses retreating into the known best-sellers. Which means more novice and midlist authors scrambling to find a way to stay in print and more authors self-publishing their print books — or more likely releasing their works as e-files.”

All of that sounds dire. Perhaps the only consolation for those who fear the power of Amazon is the knowledge that all companies eventually peak, no matter how unlikely that seems when they are in the ascendance.

Mr. Esposito, the consultant, remembered that 30 years ago there was a book called “The Media Monopoly,” which worried about the excessive power of the Gannett chain of newspapers as well as the three major television networks.

“The book reads almost quaint now,” Mr. Esposito said.

Bits Blog: The Price of Amazon

Jeff Swensen for The New York Times Jim Hollock’s first book, “Born to Lose,” has been losing momentum, yet Amazon has increased the price by nearly a third.

The Amazon.com story is remarkable. Within living memory, bookselling was a local activity. A major city would have two or three large independent stores selling new books and other large, scruffier stores selling secondhand books. Paperbacks would receive wide if uneven circulation on bus station and drugstore racks. It was not a perfect system, but it had the advantage of being diffuse and thus hard to control. The hippie, black and women’s movements of the 1960s would not have been so successful in challenging authority without the bookstores, which made their ideas widely available and sympathetic in a way that television, for instance, did not.

That transmission system has now been largely dismantled, killed by high rents and new technology. With little discussion, Amazon has skillfully absorbed a large part of the book trade. It sells about one in four new books, and the vast number of independent sellers on its site increases its market share even more. It owns as a separate entity the largest secondhand book network, Abebooks. And of course it has a majority of the e-book market.

The company is a marvel in many ways. You can get almost any print book you want, by the end of the week! And Amazon will pay the postage! For book lovers, it was a dream come true. Amazon presents itself as less a company and more a public utility. One of its greatest accomplishments is the way it has made the future of bookselling seem as if it will inevitably be owned by Amazon.

One consequence of this shift is that soon no one will know what a book’s “real” price is. Price will be determined by demand and perhaps by whim. The first seeds of this can be seen in the Justice Department’s suit against the leading publishers, who felt that Amazon was pricing their e-books so low that it threatened their viability. The government accused the publishers of colluding to raise prices in an anti-consumer move. Amazon was not a party to the case,  but it emerged the big winner.

Perhaps as a result, the question of how Amazon prices books is now a radioactive topic with some publishers. While reporting my article in Friday’s New York Times, I tried to ask the University of Chicago Press why Amazon seemed to be cutting discounts on its books, effectively making them more expensive and thus possibly less salable. Laura Avey, promotions manager, replied: “This just isn’t something that anyone here is going to be able to comment on. Pricing questions involve proprietary information, and we just aren’t able to share that.”

One of the few publishers willing to speak his mind about Amazon is Dennis Loy Johnson, proprietor of the Melville House, one of the most interesting new presses since its founding in 2001. Melville had an immediate hit last month with a rediscovered article by James Agee, “Cotton Tenants.” But as sales slow in the days since publication, Amazon is charging more for it.

The price-tracking site camelcamelcamel shows “Cotton Tenants,” which lists for $24.95, moving from $16 on Amazon shortly after publication to $19.79 last week before falling back slightly to the current $19.23. If you were a few weeks late getting the news about “Cotton Tenants,” you paid 20 percent more.

But it is still cheaper than the neighborhood bookstore, assuming of course there is one left. Right?

“I don’t like the fact that there’s one retailer able to so massively underprice other retailers, especially in a business that so desperately needs more retailers,” Mr. Johnson said. “And I don’t like the inconsistency of the pricing, either — the raising, the lowering — because it sends a confusing message that good books are worth less, and because it encourages buying based on something other than the quality of the book. It’s just an unhealthy business if people are buying a thing mostly because of its price, not its quality. That’s how you sell widgets, not books.”

“Discounting, and especially inconsistent or shifting discounting, really messes with a publisher’s ability to price a book fairly and accurately to its cost,” he added. “You have to consider the fact that whatever price you put on the cover, Amazon is going to reduce it by as much as half — unless they don’t — or they may, but only for a while. But in short they’re going to make your book look like a thing with a cost lower than the one you placed on it.

“So do you raise the price, knowing they’re going to lower it, so that the price will then appear closer to what you need it to be? But if you do that then you’re screwing the more honest retailers who can’t discount. And we’ve gotten a long way from recognition of the fact that publishers have costs in making books, and that should have something to do with the price.”

Bits Blog: Today’s Scuttlebot: Web Page No. 1 and Amazon in China

Here are some of the more interesting items that the tech reporters and editors of The New York Times found on the Web recently. More Scuttlebot can be found here.

Stop Watching Us
Optin.stopwatching.us |  Mozilla urges Firefox users to join privacy coalition demanding full disclosure of N.S.A. spying. — Vindu Goel

Search for First Web Page Takes Detour Into North Carolina
Hosted2.ap.org |  A page created in 1991 is locked in a NeXT computer, behind a password long forgotten. — Ashwin Seshagiri

Apple’s War Against ‘Jailbreaking’ Now Makes Sense
ZDNet |  How Apple’s new anti-theft Activation Lock feature may disrupt the practice of “jailbreaking” iPhones, or freeing them from limitations imposed by Apple or the carrier.  — Amy O’Leary

Amazon’s Kindle Goes on Sale in China
Minyanville.com |  You know what’s hard? Selling books in China. Actually, selling anything in China is hard. Even if you are Amazon.  — Howell Murray

Inside the N.S.A.’s Ultra-Secret China Hacking Group
Foreign Policy |  Foreign Policy on N.S.A. hacking: “It turns out that the Chinese government’s allegations are essentially correct.”  — Nicole Perlroth

Prism Suit
Scribd.com |  And the Prism class action lawsuits begin.  — Nicole Perlroth

Developers Conference Explained in One Photo
Twitter.com |  The gender divide in tech, perfectly captured in a photo from Apple’s Worldwide Developers Conference.  — Claire Cain Miller

R-Stonze Releases "Rock S.T.A.R." The Album (iTunes Exclusive)

This is something refreshing. Imagine your favorite rapper and your favorite rock group collaborating together to make a song. This is what Rock S.T.A.R. sounds like. This album is a independent release from R-Stonze under his label Stakk Money Ent.

S.T.A.R. stands for "Strive-Towards-Anything-Reachable." The sound of this album is rich and energetic with the epic samples of Bon Jovi on the opening track, to the dope chill of "I'll Be Alright". If you enjoy "GOOD" music, then you must listen to this album.

Amazon - http://www.amazon.com/Rock-S-T-a-R-Explicit/dp/B00COAAM6G

iTunes - https://itunes.apple.com/us/album/rock-s.t.a.r./id645516972

Google Play - https://play.google.com/store/music/album/R_Stonze_Rock_S_T_a_R?id=Bs3dezgapnhideqxosv3akdzfvy&feature=nav_result#?t=W251bGwsMSwxLDMsImFsYnVtLUJzM2RlemdhcG5oaWRlcXhvc3YzYWtkemZ2eSJd

Gadgetwise Blog: Q&A: Covering Up Your Amazon Tracks

Can I erase things I recently looked at on Amazon.com so they don’t show up on the home page when I return?

You can remove certain products from your Amazon shopping trail, or turn off your browsing history on the site altogether. To remove specific items from the Recently Viewed section when you are logged into your Amazon page, click the “View or edit your browsing history” link under a row of products. On the resulting “Your Browsing History” page, find the product you want to remove and click the “Delete this item” link.

In the “Manage Your Browsing History” box on the left side of the page, you also have options to delete all the items on list at once or turn off your browsing history completely. You can also get to your browsing history settings by clicking the Your Account button at the top of the Amazon page and scrolling down to the Personalization section.

Amazon, Bracing for Strikes in Germany, Plans to Hire Engineers

Werner Vogels, the chief technology officer at Amazon, said the company chose Germany because it was the largest market in Europe and because Berlin was a good source of qualified software engineers and application developers.

Mr. Vogels said Amazon’s sales of cloud-computing were accelerating in Europe, as technology managers sought to cut costs and were increasingly reassured that sensitive corporate data could stay secure in remote data centers.

“All I can say is we are very happy with the development of cloud-computing sales in Europe,” Mr. Vogels said during an interview at the cloud-computing conference in Berlin, which was attended by 935 software developers.

The engineers would work with a team at Amazon’s European headquarters in Dublin but be based in Berlin and Dresden.

At the same time, the U.S. tech giant is girding for possible strikes by workers at two of its largest distribution centers in Europe.

Amazon employees in Bad Hersfeld who belong to ver.di, a German trade union, voted Monday to authorize a strike. Mechthild Middeke, a ver.di spokeswoman organizing workers at the Bad Hersfeld plant, said 97.6 percent of ver.di workers at the facility had voted to strike.

The employees want Amazon to sign a collective bargaining agreement used by some local employers, which ver.di says could increase the annual pay and benefits of Amazon workers as much as a third. Amazon has refused to sign the agreement, arguing that the U.S. company pays workers at levels comparable to other local online retailers, Ms. Middeke said.

Ver.di wants Amazon to pay the roughly 9,000 workers at its eight logistics centers in the country as “retailing” workers under German law, which would qualify them for the higher pay. Amazon says the workers are “logistics” employees, who on average earn €9.30, or $12.10, an hour in their first year of service and more than €10 an hour thereafter.

“We will do everything possible should there be strikes to make sure that our customers in Germany are served,” said Christine Höger, a spokeswoman for Amazon Germany in Munich. Ms. Höger said that Amazon paid its logistics employees more than comparable German businesses pay for logistics workers.

Ver.di members at Amazon’s distribution center in Leipzig voted last month to strike. Dates for the strikes have not been set, Ms. Middeke, the union representative, said. She declined to say if her union represented a majority of workers at either Amazon facility.

“A work stoppage will take place in the near future,” Ms. Middeke said.

Ms. Höger said Amazon had attempted to reach agreement with ver.di representatives, but had made little progress.

“We had several informal talks with ver.di over the past few weeks,” Ms. Höger said during an interview. “While we are willing to continue our conversation, we also see too little common ground for negotiations at the moment.”

Heribert Jöris, the managing director of Handelsverband Deutschland, the main association representing employers in the German retailing industry, said he estimated the chances of a strike at Amazon’s facilities as “very high.”

The employers’ association in January canceled a nationwide collective bargaining agreement covering workers at 100,000 retailing businesses, saying it wanted changes in compensation and work practices that date from the 1950s.

Employers and unions are expecting to begin negotiations on a new contract within weeks. Ver.di this year organized a strike by workers at Zara, the clothing retailer, and has threatened work stoppages at Globus, a discount chain, Mr. Jöris said. But in neither case have employers agreed to new wage pacts, he added.

“I’m pretty sure there will be strikes now,” Mr. Jöris said. “But that doesn’t mean the strikes will be successful.”

Mr. Vogels, a Dutchman who is based in Seattle, declined to comment on the labor situation at Amazon’s retailing operations in Germany.

The new engineers would be hired by a division of Amazon, Amazon Web Services, over the next 12 months. The developers would work for a new subsidiary, Amazon Development Center Germany, which would make applications and other software tools for customers of Amazon’s cloud-computing business.

Amazon offers its European business customers like Royal Dutch Shell; Kempinski Hotels, a chain based in Geneva; and Unilever the option of storing their data in computing centers that it runs inside the European Union to satisfy a law that requires business to handle the data of E.U. citizens within the 27-nation bloc.

Jeremy Ward, a senior vice president for information technology at the Kempinski chain, which is majority owned by the sovereign wealth fund of Thailand, is in the middle of a five-year project to shift its corporate computer functions to Amazon’s cloud.

Mr. Ward said Kempinski was on track to cut its annual I.T. costs by 40 percent as it moved functions like an internal employee telephone directory, training videos and corporate news, currently run by 143 Kempinski servers, into the cloud.

“I think increasingly businesses are dropping their preconceived notions and are beginning to take advantage of the savings in the cloud,” Mr. Ward said in an interview at the conference.

Amazon to Buy Goodreads

With bookstores closing, Internet sites have become critical places for telling readers about books they might be interested in. This deal further consolidates Amazon’s power to determine which authors get exposure for their work.

Until the purchase, Goodreads was a rival to Amazon as a place for discovering books. Goodreads, which is based on networks of friends sharing reviews, was building a reputation as a reliably independent source of recommendations. It was also of great interest to publishers because members routinely shared their lists of books to be read.

By contrast, Amazon had several well-publicized cases involving writers buying or manipulating their reviews on its site. As a result, authors said Amazon was deleting reviews from its site at the end of 2012 as a way of cracking down.

The deal is made more significant because Amazon already owned part or all of Goodreads’ competitors, Shelfari and LibraryThing. It bought Shelfari in 2008. It also owns a portion of LibraryThing as a result of buying companies that already owned a stake in the site. Both are much smaller and have grown much more slowly than Goodreads.

Otis Chandler, a founder of Goodreads, said his management team would remain in place to guard the reviewing process that had made the site attractive to its 16 million members. “Amazon has a real history of building independent brands and running them as independent companies,” he said in a phone interview.

Reaction online, however, was swift and laced with skepticism. “Say hello to a world in which Amazon targets you based on your Goodreads reviews,” Edward Champion, a writer and editor, posted on Twitter. “No company should have this power.”

The deal did get some support from Hugh Howey, whose book “Wool” was originally self-published on Amazon and promoted through Goodreads and became a best seller. “The best place to discuss books is joining up with the best place to buy books — to-be-read piles everywhere must be groaning in anticipation,” he said in the companies’ news release.

Russ Grandinetti, Amazon’s vice president for Kindle content, said the integration of the companies was beneficial. For example, it will make it “super easy,” he said, for authors that self-publish through Kindle “to promote their books on Goodreads.”

Amazon and Overstock Lose Challenge to Online Sales Tax

Amazon.com, the biggest online store, and its much smaller competitor Overstock.com had separately sued to challenge a 2008 state law that required online retailers to collect sales taxes on purchases made by New York residents. That served effectively to raise prices on the sites by nearly 10 percent, reducing their competitive advantage against brick-and-mortar retailers.

In a statement, Amazon denounced the New York Court of Appeals ruling as conflicting with precedents by the United States Supreme Court and decisions by other state courts. Overstock said it was considering appealing to the federal Supreme Court.

Central to the dispute was the question of affiliates, which are independent sites that link to a retailer in return for a commission. Thousands of Amazon affiliates are based in New York.

“The bottom line is that if a vendor is paying New York residents to actively solicit business in this state, there is no reason why that vendor should not shoulder the appropriate tax burden,” the appeals court wrote in its decision. The suits had been dismissed by lower courts.

The struggle over Internet taxes has intensified in the last few years. Brick-and-mortar retailers have been increasingly insistent that Amazon in particular was unfairly avoiding its responsibility to make sure its customers paid sales taxes. Other states began debating measures like New York’s.

In response, Amazon struck deals in California, New Jersey and a few other states to build warehouses in exchange for finally agreeing to collect taxes. In states where it does not need warehouses, Amazon has generally refused to budge.

The retailer says it supports a national solution rather than a state-by-state effort. After many years of inactivity, progress is being made on that front, with a majority of United States senators indicating this month that they would support an Internet tax measure.

All Or Nothing, The Movie Promo 1

Official promotional video for the movie "All Or Nothing". The movie will be released in 2014. Until then, you can read the entire book right now. This production will be by Stakk Money Films.

"All Or Nothing" On Amazon.Com -http://www.amazon.com/dp/1461172683/ref=cm_sw_r_tw_dp_HR0Kpb18SNJ3

Fear of Amazon Pushes Stores to Offer Same-Day Shipping

This holiday season, same-day shipping has replaced free shipping as the new must-have promotion. It’s logistically complicated and money-losing — and may not even be a service that consumers want or need, analysts say. But retailers from Walmart to small shops like Shoptiques are willing to take the risk. Even the Postal Service has introduced a same-day option for retailers. And the reason is simple: fear of Amazon.com.

Amazon, the world’s biggest online retailer, has hinted that it will expand its same-day shipping service, giving customers the immediate gratification that has been the biggest advantage of brick-and-mortar stores.

For small outfits like Shoptiques, it is not an easy proposition. The courier who showed up at Ms. Wu’s office was the company’s head of boutique operations, who has put aside her regular job this holiday season to make deliveries by hand. Bigger retailers, like Toys “R” Us, Macy’s and Target, have worked with eBay to deliver items the same day, as have other old-line stores. Google has begun testing a local delivery service with several chains.

“There’s lots going on in this space, and it’s all driven by Amazon,” said Tom Allason, founder and chief executive of Shutl, a British same-day delivery service that will expand to the United States next year. “It’s not really being driven by consumers at the moment.”

The same-day delivery idea was a spectacular failure during the dot.com boom. Companies like Kozmo.com and Webvan went under because the services simply cost too much to be profitable. Amazon has offered same-day shipping since 2009, but with limits — only in big cities near Amazon warehouses on certain items ordered in the morning.

The geographical limits exist because Amazon had built warehouses far from major cities to avoid charging sales tax in certain states. But it has now given in on the sales tax fight, and in return, is erecting warehouses near cities like San Francisco, which analysts say is paving the way for faster, more widespread same-day delivery and spurring competitors.

“It’s the old idiom, ‘time is money,’ ” said Lina Shustarovich, an eBay spokeswoman. “How much time are you saving by not going to the store? People want it now, they want it fast.”

Walmart, which is the nation’s biggest retailer but sells just a fraction of what Amazon does online, is testing same-day shipping during the holiday season in five markets. Generally, it gives shoppers a four-hour delivery window and charges $10 for same- or next-day delivery. The idea is “to give customers convenience, by way of combining our online shopping with the local presence of stores,” said Amy Lester, a Walmart spokeswoman for global commerce.

But, Ms. Lester said, the test is showing that consumers often pick next-day delivery rather than same day. She declined to give a specific figure for same-day orders, but said thousands of same- and next-day orders had been placed.

Net-a-Porter, the designer apparel e-commerce site, said its same-day service is quite popular. Its $25 delivery service in the London and New York areas pays for itself, said Alison Loehnis, its managing director. But its clients are accustomed to paying for concierge service, like the customer who ordered clothing to be delivered the same day to her private jet before a vacation.

With the eBay Now iPhone app, introduced this year in San Francisco and New York, customers choose items from physical stores and eBay sends a courier to the store to pick it up and drop it off — at an apartment, office, coffee shop or bar — for a $5 fee.

EBay declined to say whether it loses money on the orders, but analysts who study logistics say it is not profitable.

“The goal with this pilot was never to monetize,” Ms. Shustarovich said. But in the future, it could make money, she said, for example if retailers pay eBay a fee for bringing them customers.

The Postal Service is testing a same-day service in San Francisco that is meant to offset its declining carrier business, a spokesman said. Consumers can order items until 2 p.m. from 1-800-Flowers.com, the first retailer offering the service, and a Postal Service employee will pick up the package and deliver it between 4 and 8 p.m.

Smaller companies are trying different approaches.

TaskRabbit, which offers à la carte personal assistant services, noticed last summer that delivering items from local stores was the most popular task requested.

Now, it charges $10 for delivery from local stores, starting in San Francisco.

This article has been revised to reflect the following correction:

Correction: December 27, 2012

A photo caption with an earlier version of this post misspelled the given name of an employee of Shoptiques.com who was making a same-day delivery. She is Arianna Simpson, not Arriana.

Amazon Book Reviews Deleted in a Purge Aimed at Manipulation

After several well-publicized cases involving writers buying or manipulating their reviews, Amazon is cracking down. Writers say thousands of reviews have been deleted from the shopping site in recent months.

Amazon has not said how many reviews it has killed, nor has it offered any public explanation. So its sweeping but hazy purge has generated an uproar about what it means to review in an era when everyone is an author and everyone is a reviewer.

Is a review merely a gesture of enthusiasm or should it be held to a higher standard? Should writers be allowed to pass judgment on peers the way they have always done offline or are they competitors whose reviews should be banned? Does a groundswell of raves for a new book mean anything if the author is soliciting the comments?

In a debate percolating on blogs and on Amazon itself, quite a few writers take a permissive view on these issues.

The mystery novelist J. A. Konrath, for example, does not see anything wrong with an author indulging in chicanery. “Customer buys book because of fake review = zero harm,” he wrote on his blog.

Some readers differ. An ad hoc group of purists has formed on Amazon to track its most prominent reviewer, Harriet Klausner, who has over 25,000 reviews. They do not see how she can read so much so fast or why her reviews are overwhelmingly — and, they say, misleadingly — exaltations.

“Everyone in this group will tell you that we’ve all been duped into buying books based on her reviews,” said Margie Brown, a retired city clerk from Arizona.

Once a populist gimmick, the reviews are vital to making sure a new product is not lost in the digital wilderness. Amazon has refined the reviewing process over the years, giving customers the opportunity to rate reviews and comment on them. It is layer after layer of possible criticism.

“A not-insubstantial chunk of their infrastructure is based on their reviews — and all of that depends on having reviews customers can trust,” said Edward W. Robertson, a science fiction novelist who has watched the debate closely.

Nowhere are reviews more crucial than with books, an industry in which Amazon captures nearly a third of every dollar spent. It values reviews more than other online booksellers like Apple or Barnes & Noble, featuring them prominently and using them to help decide which books to acquire for its own imprints by its relatively new publishing arm.

So writers have naturally been vying to get more, and better, notices. Several mystery writers, including R. J. Ellory, Stephen Leather and John Locke, have recently confessed to various forms of manipulation under the general category of “sock puppets,” or online identities used to deceive. That resulted in a widely circulated petition by a loose coalition of writers under the banner, “No Sock Puppets Here Please,” asking people to “vote for book reviews you can trust.”

In explaining its purge of reviews, Amazon has told some writers that “we do not allow reviews on behalf of a person or company with a financial interest in the product or a directly competing product. This includes authors.” But writers say that rule is not applied consistently.

In some cases, the ax fell on those with a direct relationship with the author.

“My sister’s and best friend’s reviews were removed from my books,” the author M. E. Franco said in a blog comment. “They happen to be two of my biggest fans.” Another writer, Valerie X. Armstrong, said her son’s five-star review of her book, “The Survival of the Fattest,” was removed. He immediately tried to put it back “and it wouldn’t take,” she wrote.

In other cases, though, the relationship was more tenuous. Michelle Gagnon lost three reviews on her young adult novel “Don’t Turn Around.” She said she did not know two of the reviewers, while the third was a longtime fan of her work. “How does Amazon know we know each other?” she said. “That’s where I started to get creeped out.”

Mr. Robertson suggested that Amazon applied a broad brush. “I believe they caught a lot of shady reviews, but a lot of innocent ones were erased, too,” he said. He figures the deleted reviews number in the thousands, or perhaps even 10,000.

The explosion of reviews for “The 4-Hour Chef” by Timothy Ferriss shows how the system has evolved from something spontaneous to a means of marketing and promotion. On Nov. 20, publication day, dozens of highly favorable reviews immediately sprouted. Other reviewers quickly criticized Mr. Ferriss, accusing him of buying supporters.

He laughed off those suggestions. “Not only would I never do that — it’s unethical — I simply don’t have to,” he wrote in an e-mail, saying he had sent several hundred review copies to fans and potential fans. “Does that stack the deck? Perhaps, but why send the book to someone who would hate it? That doesn’t help anyone: not the reader, nor the writer.”

As a demonstration of social media’s grip on reviewing, Mr. Ferriss used Twitter and Facebook to ask for a review. “Rallying my readers,” he called it. Within an hour, 61 had complied.

A few of his early reviews were written by people who admitted they had not read the book but were giving it five stars anyway because, well, they knew it would be terrific. “I am looking forward to reading this,” wrote a user posting under the name mhpics.

A spokesman for Amazon, which published “The 4-Hour Chef,” offered this sole comment for this article: “We do not require people to have experienced the product in order to review.”

The dispute over reviews is playing out in the discontent over Mrs. Klausner, an Amazon Hall of Fame reviewer for the last 11 years and undoubtedly one of the most prolific reviewers in literary history.

Mrs. Klausner published review No. 28,366, for “A Red Sun Also Rises” by Mark Hodder. Almost immediately, it had nine critical comments. The first accused it of being “riddled with errors in grammar, spelling and punctuation.” The rest were no more kind. The Harriet Klausner Appreciation Society had struck again.

Mrs. Klausner, a 60-year-old retired librarian who lives in Atlanta, has published an average of seven reviews a day for more than a decade. “To watch her in action is unbelievable,” said her husband, Stanley. “You see the pages turning.”

Mrs. Klausner, who says ailments keep her home and insomnia keeps her up, scoffs at her critics. “You ever read a Harlequin romance?” she said. “You can finish it in one hour. I’ve always been a speed reader.” She has a message for her naysayers: “Get a life. Read a book.”

More than 99.9 percent of Mrs. Klausner’s reviews are four or five stars. “If I can make it past the first 50 pages, that means I like it, and so I review it,” she said. But even Stanley said, “She’s soft, I won’t deny that.”

The campaign against Mrs. Klausner has pushed down her reviewer ratings, which in theory makes her less influential. But when everything is subject to review, the battle is never-ending.

Ragan Buckley, an aspiring novelist active in the campaign against Mrs. Klausner under the name “Sneaky Burrito,” is a little weary. “There are so many fake reviews that I’m often better off just walking into a physical store and picking an item off the shelf at random,” she said.

Bits Blog: On Amazon, Cooking Up Friendly Reviews

Beneath the placid surface of Amazon, authors and reviewers have been in a ferment this fall. After several well-publicized episodes involving writers soliciting or paying for reviews, the retailer seems to be cracking down on log-rolling. Thousands, perhaps tens of thousands, of book reviews have been killed. Amazon has not explained exactly why.

One possible target: authors who have sent gift certificates to reviewers to buy their books. While it’s easy to see the potential for abuse here — “Here’s a $100 gift certificate. Buy a copy of my novel for 99 cents and keep the change” — some writers argue it is no different than sending a physical copy of a book to someone, which is what publishers do in the offline world and therefore is allowed by Amazon. At least, the line between the two is blurry.

Consider the case of Tim Ferriss, the self-help specialist whose extensive promotional activities help power his books onto the best-seller lists. He gave away a thousand advance copies — many more than most authors — before “The 4-Hour Body” was published two years ago. Some went to friends, some to companies where Mr. Ferriss had been a guest speaker, still more to those who helped or volunteered to help with the book. On publication day, all the recipients were sent an e-mail marked urgent asking them to spend 30 seconds writing a review. Many complied. But some readers saw something suspicious.

“Although this generated a fair amount of backlash from skeptics, it was an immense boon for us to have a solid foundation of 200 positive reviews in the first week,” a Ferriss marketing associate wrote in a guest post on the author’s blog in March 2011. “Having a solid Amazon rating gives the book an enormous amount of social proof that can last for years, and (although immeasurable from our end) boosts the conversion rate on the sales page substantially.”

Two weeks ago, Mr. Ferriss brought out his third book, “The 4-Hour Chef.” Published this time by Amazon itself, the nearly 700-page tome came equipped with many five-star reviews posted on the date of publication. Only a few of the reviewers said they had gotten advance copies. Once again, some readers saw something suspicious. “Tons of fake ratings have been posted on the first day that this book came out,” posted a reader who goes by carmex. “Please do not encourage this type of behavior.”

A debate sprang up about whether it was permissible to solicit advance reviews from friends and others you strongly suspected were going to give you a rave. “Would you consider those reviews as being within the spirit and integrity of what a review should be or is that more akin to network marketing?” asked one reader, who put himself in the second group.

Mr. Ferriss said in an e-mail message that he sent out from 200 to 300 advance copies of “The 4-Hour Chef” to “people I identified as being potentially interested in my book and who would probably enjoy the content. Does that stack the deck? Perhaps, but why send the book to someone who would hate it? That doesn’t help anyone: not the reader, nor the writer. ”

Some critics noted that some of Mr. Ferriss’ fans had written no other reviews — usually a tip-off that the reviewer has been paid or was a friend of the author. “No conspiracy required,” Mr. Ferriss said. “How many people routinely leave Amazon reviews? Very few. Even reading as much as I do, I very rarely leave book reviews. But if a writer I loved, one who’d written more than 400 blog posts for free (as I have) — posts I benefited from — asked me to do so as a 30-second favor, would I be inclined? Absolutely. That would make me a new reviewer.”

The most controversial of Mr. Ferriss’ reviewers are not reviewers at all. These are fans who straightforwardly admit they haven’t read the book, but nevertheless give it four or five stars:

“It baffles me how excited I am to have this book in my hands — Just arrived home and it was sitting on my porch waiting for me,” wrote one “reviewer.” “Just ordered this hope it’s as good as the other titles,” said a second. “I’ll write a review once I’m finished,” exclaimed a third.

Some people review books on Amazon before they read them.

Surprisingly, Amazon says it is completely legitimate to do this. “We do not require people to have experienced the product in order to review,” Craig Berman, an Amazon spokeman, said. “Some people write reviews on why they decided not to buy, or write a review as a gift giver rather than the product owner.”

Perhaps, but I see a future where we have virtual enthusiasm for virtual books. Reviews are crucial to online commerce in a way they never were to offline sales. If Amazon can devise a system that is transparent and fair to all involved — author, reviewer and customer — it will be a greater achievement than same-day delivery.

Amazon Reports Weak Results, Shares Fall Over 5 Percent

Amazon shares slipped slightly to $220.75 in after-hours trading after the results.

The company said its third-quarter net loss was $274 million, or 60 cents a share, versus net income of $63 million, or 14 cents a share, in the third quarter of 2011. Part of the loss related to an impairment charge from Amazon's investment in daily deal company LivingSocial.

Third-quarter revenue was $13.81 billion, up 27 percent from a year earlier, Amazon also said.

Amazon was expected to lose 8 cents a share in the third quarter on revenue of $13.9 billion, according to Thomson Reuters I/B/E/S.

The last time Amazon reported a quarterly net loss was in the third quarter of 2003, according to Thomson Reuters data.

For the crucial fourth-quarter holiday shopping period, Amazon forecast revenue that missed analysts' expectations. The company also gave a wide forecast for operating income in the period - and the mid-point of the range was lower than some analysts' estimates.

"There's increased competition from mass merchants and big box retailers embedded in that guidance," said RJ Hottovy, an equity analyst at Morningstar. "There's a lot of competition this holiday, and it's not clear how this will play out, even for smart operators like Amazon."

Amazon is facing more competition this holiday season from big retailers such as Target Corp and Best Buy Co Inc, which are planning to match some of the company's prices online.

Wal-Mart Stores Inc, the world's largest retailer, is also testing same-day delivery in some cities this holiday, while Target is selling more exclusive products that cannot be bought at lower prices online.

Amazon is also spending heavily on new distribution warehouses and technology to support its cloud-computing businesses, Amazon Web Services. It is also investing hundreds of millions of dollars a year on digital content to sell through its Kindle tablets and e-readers.

Amazon Chief Financial Officer Tom Szkutak said the company will continue investing heavily in technology, infrastructure and digital content.

The company spent $1.51 billion on shipping and warehouses in the third quarter, up from $1.12 billion a year earlier. Technology and content spending reached $1.19 billion, up from $769 million in the same period last year.

The Kindle gadgets are being sold at cost, pressuring earnings in the short term. Amazon hopes to make money when customers use them to buy more physical and digital products from the company.

Amazon launched new Kindle Fire tablets in September and CFO Szkutak said demand has been "fantastic."

Chief Executive Jeff Bezos said in a statement that the new $199 Kindle Fire HD, the new Kindle Paperwhite e-reader and the entry-level $69 Kindle e-reader are the top three best-selling products on Amazon, based on unit sales.

Szkutak said Kindle Fire tablet users are purchasing a lot more digital content through the devices, as well as watching free video content.

The introduction of new tablets and e-readers should be good for digital content sales going forward, he added.

Europe's sovereign debt crisis and recession is reducing consumer demand, sparking concern that even fast-growing Internet companies may be affected.

EBay Chief Financial Officer Bob Swan said last week that the company expected an "OK" holiday season, partly because of macro pressure in Europe.

Amazon said on Thursday that revenue from North America was $7.88 billion, up 33 percent from a year earlier. International sales, including Europe, totaled $5.92 billion, up 20 percent from the same period in 2011.

(Reporting By Alistair Barr; Editing by M.D. Golan)