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.”

Corner Office: So Who Says a New Business Has to Be Small?

Q. Did you have the entrepreneurial itch early on in your life?

A. I did. My parents were entrepreneurs. They ran a small ad agency in upstate New York.

Q. What were your high school years like?

A. I never did particularly well in school, but I did get really into things. I used to build robots, and dove right into computers to the point where my schoolwork suffered. Then I really became inspired by people like Steve Jobs and Bill Gates. In high school, I started my first company, called M Cubed Software. We named it that because it was me and two other guys named Mike.

Q. So did you bypass college?

A. My dad died from cancer when I was 18, and my mom was in a really tough spot. So I wanted to try to help at home. I had started doing some technology consulting. Then a friend of the family got me an interview at I.B.M. They hired me basically as an intern, and they told me not to plan on being there beyond the internship. They also said they don’t hire anyone who doesn’t have a degree.

But I was determined to make sure that I became so valuable that they couldn’t let me go. And that was what happened, and they eventually hired me full time. I.B.M. was my college education, effectively. They were very good at teaching you management.

Q. And the next big step?

A. I left I.B.M. in 1989, when I was 22, to start a company called Paper Software.

Q. What did you learn from that?

A. The first lesson was that I’d bought all these business books because I hadn’t gone to school. And I really got into the theoretical aspects of starting a company. Then what I finally realized after about six months is that I just needed to do it. I just needed to actually build something. And that was a good lesson — do something, build something and everything will happen from there.

I was able to recruit three really awesome I.B.M. engineers. I had to pay them a lot of money to join. One day, two of them said, “Hey, can you come outside and go for a walk with us?” They told me they were going to quit and start a company that was basically going to do what we were doing. I had two other guys working for me who were up-and-coming engineers, and I was paying them a fraction of what I was paying these guys. I came back to the office and I pulled my small team together and said: “O.K., I have good news and bad news. The bad news is, we just lost half of our engineers, but the good news is we kept the best half.”

And that was a great moment, when I learned how you rally people around hardship, and give them the opportunity to step up. You can actually get better output from people when you give them more than what they normally would be expected to handle.

Q. You eventually sold Paper Software to Netscape and moved to the West Coast to join Netscape. Lessons from that experience?

A. One of the biggest mistakes I made at Netscape was to focus too much on competition. Microsoft was trying to kill us. And that caused us to think about what we were going to do about Microsoft. What we really should have been thinking was: How do we focus on what our users want? Why did they love our product? How do we make it more of something that they love? So my advice is, every time you have a thought about the competition, replace that with a thought about your customer and you’ll do far better as a business.

Q. Other lessons for would-be entrepreneurs that you’ve learned over the years?

A. I think a lot of entrepreneurs go into building a start-up thinking they should focus on a niche, and do the simplest thing that can be done. But there is a problem with that approach. In fact, it may be even harder to build that kind of niche company than it is to build a giant company that might someday be able to change the world. It’s going to take the same amount of life force. You’re going to get up in the morning, work 12 to 15 hours every day. You’ll make huge, hard decisions, hire and fire people and build teams. It literally takes the same amount of energy.

So what I think is counterintuitive is that if you focus on the big idea, the biggest thing you can possibly do, that’s actually somewhat easier, because you can attract more investment that way. You can attract more talent that way. It’s more fun, and you have way more room to maneuver.

Q. How do you hire? What qualities are you looking for? What questions do you ask?

A. I ask people what’s driving them, and what’s motivating them. I’m looking for answers along the lines of: “I want to be a part of a great team. I want to learn from really great people. I love the people I’ve met here, and I’d love to just be part of this.” I also look for people who are into doing something really meaningful and great. So I’m looking to see if their answers are centered around those two pillars. I’m trying to build a culture that’s focused primarily on the camaraderie of the team, because we’re going on a really big, important and giant journey together.

I don’t hire anyone who doesn’t genuinely share that motivation, no matter how good they are on paper. Because you have to have a durable team so that when you do hit hard patches, people are just as motivated to continue to drive forward. The team sticks together. That’s what is really required in building a company. You’re going to hit those hard spots, and you’re actually defined by how you come out of those at the end.

Q. What other questions do you ask?

A. I’ll ask them about the hardest situation they’ve ever been in, and how they navigated through it. I’ll ask: What’s your greatest triumph? What’s the thing that you’re most proud of that you’ve done in your career? And then: What are some of the core lessons you’ve learned? You can have a 90-minute conversation just with those questions.

This interview was edited and condensed. (The New York Times shares content with Flipboard through a revenue-sharing agreement.)

Pogue's Posts Blog: Don’t Forget the Small Ideas That Make a Difference

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Gadgetwise Blog: A Small Subwoofer With Case-Busting Bass

The normal formula of high fidelity says bigger speakers equal more bass, but Sunfire has turned that calculus on its head with the Atmos subwoofer. Designed by the physicist and audio rule-breaker Bob Carver, the Atmos is about the size of five or so stacked hardback books.

Packing powerful bass into a box measuring roughly 8.5 inches by 9 inches by 10 inches and weighing 32 pounds was technologically daunting.

For one thing, the device has a built-in 1400-watt amplifier, which would normally produce a lot of heat and require big cooling fins. The company said a circuit called a “tracking down converter” constantly adjusts the current so the Atmos draws no more than it needs to move the drivers, resulting in little excess heat. After about 40 minutes of play at modest volume, the Atmos was still cool to the touch.

Another problem the company faced was that the two 6.5-inch drivers move enough air to cause air pressure changes of as much as 50 pounds per square inch in the small cabinet; that was enough to break apart the composite wooden cases used for prototypes. To withstand the pressure changes, the final Atmos cabinet chassis was made of extruded aluminum.

Finally, even at 32 pounds, the subwoofer vibrated powerfully enough for it to walk around the floor. The tire manufacturer Goodyear was enlisted to produce rubber feet that would keep the device stuck in place.

Playing a variety of music, the Atmos put out enough bass that the gain had to be turned to a low setting not to overpower the rest of the system. It has a nice tone, taut and well controlled.

The drawback is that this serious engineering costs serious greenbacks; list price is $2000. That also means it won’t be widely available. You’ll have to search out a high-end boutique audio shop if you want to hear it yourself.

Sony Posts a Small Profit, Its First in 5 Years

The Tokyo-based electronics and entertainment giant said that it had booked a net profit of 43 billion yen, or $435 million, in the financial year that ended March 31. That compares with a loss of 456.7 yen billion ($4.6 billion) a year earlier. Sales grew 4.7 percent to 6.8 trillion yen ($68.4 billion).

Sony said it expected net profit to increase 16 percent in the current year to 50 billion yen ($505 million). It projected that sales would rise 10 percent this year to 7.5 trillion yen after the company releases a new video game console, the PlayStation 4, during the holiday season and bolsters its smartphone offerings.

The weaker yen, which makes Japanese products more price-competitive in foreign markets, was especially pronounced in the fourth quarter, from January through March. Sony said net profit was 93.9 billion yen ($949 million), compared with a net loss of 255.2 billion yen ($2.6 billion) in the same quarter a year earlier.

Higher revenue from its financial services unit contributed significantly to full-year profits. Sony has also streamlined to claw its way back to profit, dissolving flat-panel television manufacturing ventures with Sharp and Samsung, shedding its chemical product business and selling off its office buildings, including its New York headquarters, for $1.1 billion.

“We set out this year with the aim of doing everything we can to get back in the black,” Masaru Kato, Sony’s chief financial officer, said in a conference call with analysts in Tokyo. “This year, we absolutely intend to make a profit in electronics.”

Kazuo Hirai, who took over as chief executive in April 2012, is trying to revive Sony’s electronics division, which continues to lose money. Last week, Sony announced that dozens of top executives had agreed to forgo bonuses after continued red ink in the unit.

Mr. Hirai faces a struggle. Once a consumer electronics powerhouse, Sony has in recent years been outshone by the likes of Apple and outgunned by the marketing and manufacturing prowess of Samsung.

Profits in the games division were lower last year after the disappointing performance of its PlayStation Vita hand-held machine, which made its debut in late 2011. Sony slashed the device’s price this year.

Though Sony booked an annual profit, its television business lost money for the eighth straight year, with sales slumping 30 percent from a year earlier. But its losses have been narrowing as Sony has outsourced its panel-making, falling by 137.9 billion yen ($1.4 billion) from a year earlier to 69.6 billion ($707 million). Sony said it expected to finally break even in televisions this year.

The company will be helped by a major decline in the value of the yen, part of the economic policy of Prime Minister Shinzo Abe of Japan. The weaker yen buttresses the bottom line of exporters like Sony by increasing the value of their overseas earnings. Sony said, however, that as its business became more global and the company incurred more of its costs in dollars, currency fluctuations would have less of an effect.

Sony also struggled in its digital camera and video business, hurt by a shrinking market for compact cameras and camcorders as more users chose to snap photographs and take video with their smartphones. However, Sony has found some success with high-end cameras with interchangeable lenses for photography buffs.

Sales in Sony’s film business grew 11 percent, thanks to blockbusters like the James Bond movie “Skyfall” and “The Amazing Spider-Man.” The sluggish market for packaged music continued to weigh on the music division, though hits like “Take Me Home” and “Up All Night” from the boy-band sensation One Direction helped stave off a sales decline.

Sony is still seeking to exploit the relationships between its hardware business and its vast catalog of music and films. Though its entertainment business has generated healthy profits, the company has yet to deliver on its long-promised strategy of leveraging that material to sell more electronics — for example, by offering exclusive content on Sony devices.

Gadgetwise Blog: A Big Picture From a Small Projector

The iPower Sight measures 4 by 4 by ¾ of an inch.

Sometimes even a four-inch smartphone screen may not seem enough. If so, would 200 inches do?

The iPower Sight can — according to the manufacturer, iPowerUp — take what is on your phone, tablet or computer screen and enlarge it, projecting an image up to 200 diagonal inches from a device that is itself pocket-size.

Both measures may be a shade optimistic. No doubt the projector is small, at about 4 by 4 by ¾ of an inch and just over three ounces, but you would still need a pretty big pocket. And while it can project a focused image at up to 200 inches, you wouldn’t want to do that unless you had a completely darkened room and a nicely reflective projection screen.

It was easy enough to watch an image enlarged to around 50 inches on a white wall on an overcast day. Considering the size of the projector, the quality was quite good. The Sight uses a DLP chip, which is covered with minuscule mirrors to reflect LED light to the screen. It is the same technology that has long been used in many full-scale, high-end projectors.

The Sight’s lamp kicks out 85 lumens, which is brighter than most similarly sized projectors, and it has resolution of 854 by 480 pixels, which qualifies as high definition, but you will not want this to replace your 1080p plasma TV. Unlike your TV, the Sight can run about two hours on battery power, or plugged in for a movie marathon.

The videos I projected from YouTube looked good. Noise didn’t distract me from Psy’s horsie dance, but I could find it if I looked for it.

The projector’s built-in speaker is as anemic as the one you would find on your phone or tablet. If you want to add some quality sound, you will need to connect to a separate speaker dock.

If what you’re looking for is a decent picture from a small package, perhaps for presentations, entertaining the kids on a trip or making video games wall-size in a dorm room, the iPower Sight is far, far superior to huddling around your phone.

Currently the projector is only available direct from iPowerUp for $350.

Crowdfunding for Small Business Is Still an Unclear Path

Mr. Caldbeck and his peers on the panel fumbled for a response. The fact is, most private equity investors and venture capitalists won’t touch a consumer products company until it has surpassed $10 million in sales — anything else is too small to bother with.

The best advice the panel could offer was for the entrepreneur to tap his credit cards.

“The purpose of the panel was to help entrepreneurs raise money, but we had no answers,” Mr. Caldbeck remembers. “That’s when I knew that there is a big issue here.”

That big issue caused Mr. Caldbeck to leave his job to start CircleUp, a company that aims to connect up-and-coming consumer products companies with investors.

Right now, the people allowed to invest through CircleUp must be accredited, meaning they have a high net worth. CircleUp hopes that soon not just the wealthy few, but the general public — whether friends, family members, customers, Facebook friends, or even total strangers — will be able to invest in deserving companies through a hot new area of finance known as crowdfunding.

To its advocates, crowdfunding is a way for capital-starved entrepreneurs to receive financing that neither big investors nor lenders are willing or able to provide. To others, it represents a potential minefield that could help bad businesses get off the ground before they eventually fail, and in some cases could even ensnare unsophisticated investors in outright fraud.

Those fears are partly why the Securities and Exchange Commission has delayed rules allowing crowdfunding that were supposed to take effect this month as part of the JOBS Act (Jump-Start Our Business Start-Ups), signed by President Obama last April. The S.E.C. is wary of loosening investor protections that have been in place since the 1930s.

Despite the uncertainty, the outlines of a new industry are emerging as a few crowdfunding start-ups have found ways to raise money within current rules. They include companies like CircleUp and SoMoLend, which lends money to small, Main Street-type businesses that typically wouldn’t interest private investors.

By themselves, of course, a few start-ups can’t completely democratize finance. But they begin to illuminate what the future of crowdfunding could look like, as the debate continues over a vast widening of the private investor pool.

Mr. Caldbeck formed CircleUp last fall along with Rory Eakin, a former business school classmate who was working for a philanthropic foundation. Through their start-up, the two men seek to finance food, personal care, apparel and pet-related companies, often with an environmental or social bent.

CircleUp considers applications from companies with $1 million to $10 million in revenue. Companies whose applications are accepted make their pitches to investors behind a firewall on the CircleUp Web site, offering equity stakes in return for capital. CircleUp, which helps companies raise up to $3 million, takes a small cut of the money.

Under current federal regulations, CircleUp wouldn’t be able to arrange such deals on its own. But it struck a partnership with W. R. Hambrecht, a registered broker-dealer that can handle investments from accredited, or high-net-worth, individuals whom the S.E.C. considers sophisticated enough to invest in private companies.

“Living here in Silicon Valley, a lot of people don’t understand the need,” Mr. Caldbeck says. “If you’re a tech company with a good idea, you can raise money. But it’s a different story for food, agriculture, retail and other consumer-oriented businesses.”

Mr. Caldbeck sees a big opportunity. Consumer goods companies account for a sizable portion of the nation’s businesses, yet very little capital — from private equity funds or from accredited investors — flows to them, he says.

What’s more, only a tiny percentage of those who qualify as accredited investors actually invest in private companies, he says. (These are people with a net worth of at least $1 million, not including their primary residence, or who have earned more than $200,000 — $300,000 for couples — in each of the last two years.)

Amy Cortese is the author of “Locavesting: The Revolution in Local Investing and How to Profit From It.”

Start-Ups Take on Special Tasks for Small Business

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Small-Business Guide: Small Companies Seek to Push Sales and Marketing With Own Apps

Ms. Gurock deployed an app that allowed in-store customers to bypass the cash registers and check out their purchases themselves, on their mobile devices. Magic Beans got the app at no charge by working with its creator and agreeing to be a retail testing ground.

The app also allowed customers to scan a bar code to get product information, descriptions and reviews that had previously been available only to customers shopping online. When a customer bought an item using AisleBuyer, the app would automatically recommend two related products in the store and offer discounts and coupons. That resulted in an 8 percent increase in sales to those who used the app, Ms. Gurock said.

But the app has been used by just 5 percent of customers, Ms. Gurock said. Although she contends mobile self-checkout represents the future of retail, Magic Beans, which has five stores in the Boston area and 50 employees, was “very early to the party,” she said. “This app was on a mission to change 100 years of shopping habits, where the in-store experience is bringing your items to a cashier.”

As a result, she said Magic Beans was phasing out AisleBuyer, but she expected to try again — and with good reason. By the end of this year, according to the digital marketing firm eMarketer, there will be 116 million smartphone users in the United States.

At that point, reports Cisco, the number of mobile-connected devices globally will exceed the number of people. That is a large and expanding canvas for apps when consumers have come to expect one for almost everything, said Noah Elkin, an analyst with eMarketer. “It’s getting to the point where apps are similar to search,” he said. “If you don’t get any results for a brand, that brand doesn’t exist.”

That puts growing pressure on small businesses to create and publish their own apps. This guide looks at the experiences of several companies that have tried.

BUILDING IT: THE BASICS There are essentially two kinds of apps. Native apps are written for specific operating systems — Apple’s iOS, for example, or Google’s Android — and are installed directly on a device. They are available through online stores like iTunes or Google Play. Mobile Web apps run on a device’s Web browser — and because of that can be slower — but they work on a variety of systems. There is no app store for the mobile Web so those apps can be harder for consumers to find.

Small businesses can build native and mobile Web apps using do-it-yourself tools or by hiring a developer to custom-design one. Tiggzi, a development platform made by Exadel, offers drag-and-drop tools for building apps and integrates services like Facebook and OpenTable.

Titanium from Appcelerator does not require developers to have deep programming experience, but they do need to know JavaScript, HTML or CSS. EachScape, which also uses drag-and-drop tools, lets users build and manage apps that are delivered to a device as a native app.

Most platforms allow the builder to add features like push notifications (alerts that can announce sales, for example) and the ability to connect to social networks.

The cost depends on the scope and complexity of the app, Mr. Elkin said. For example, using Tiggzi, which is a cloud-based subscription service, the cost ranges from free for one app to $50 a month for 50. Custom designing an app can cost several thousand dollars.

MARKETING TOOL PrimeGenesis, an executive consulting firm in Stamford, Conn., created an iPad app last year to encourage users to buy the firm’s book, “The New Leader’s 100-Day Action Plan,” written by three of the company’s founders.

The firm has 13 partners and about $2 million in annual revenue, and it used Mobile Distortion, an app developer in San Diego. The app, which cost about $35,000, provides executives entering a new company with an interactive, mobile template for creating and carrying out a 100-day action plan.

PrimeGenesis sells the full app for $9.99 (a basic version is free), but George Bradt, managing director, says the firm measures the app’s success by the number of clients it produces. “The app is there to drive people to the book, which markets our firm,” he said.

Each new client it attracts represents about $50,000 in revenue. “If we sell 10,000 books a year and convert five buyers into consulting assignments,” Mr. Bradt said, “that’s a quarter of a million dollars.”

Small-Business Guide: Small Businesses Open Storefronts on Facebook

Ms. Miller put up a Web site, but about five months later her sister created a Got What It Cakes Facebook page. That’s when the business started to grow. Cake orders went from two or three a weekend to six to 10; now Ms. Miller is turning away another 10 each weekend. Annual revenue at the end of her second year in business was a little more than $40,000.

Got What It Cakes is part of a new wave of online commerce: F-commerce. Social media specialists say the term was coined in 2009 to describe the growing number of businesses that sell through a Facebook page. Payvment, a start-up that provides support for Facebook shopping transactions, says it has 170,000 clients and is signing on about 1,500 stores a week, most with fewer than five employees.

The rise of F-commerce has been largely haphazard, something Facebook did not instigate or promote. A spokesman declined to discuss the phenomenon, except to acknowledge, “Retailers are experimenting in a number of ways.”

Small businesses seem to be having more success on Facebook than large companies, said Sucharita Mulpuru, a retail analyst at Forrester. Those doing well, she said, generally have less than $100,000 in revenue and fewer than 10 employees. Gap, Nordstrom, J. C. Penney and GameStop, on the other hand, have all shut down Facebook stores in the last 12 months, mostly, Ms. Mulpuru said, because consumers are accustomed to the richer experience on retailing Web sites.

But Facebook can present challenges to businesses of all sizes. Some consumers do not feel safe buying directly from a Facebook storefront, said Krista Garcia, a social commerce analyst with a market research firm, eMarketer. And business owners should be aware that they do not own their Facebook pages — Facebook does, and it can change the appearance and rules whenever it wants.

GETTING STARTED It’s easy for a small business to open a Facebook storefront by creating a page in the business’s name, loading photos of the product and adding shopping functions. Because Facebook storefronts can look generic, small businesses have to find ways to differentiate themselves, said Jay Bean, chief executive of an online marketing firm, OrangeSoda.

Customizing a page is done by installing applications that enable customers to do things like shop, enter contests or see a menu. Apps are available from Facebook and outside vendors, or they can be custom-developed.

Payvment’s tools let businesses create a storefront with a shopping cart and promotions like discounts and coupons.

USE YOUR PERSONALITY Unlike larger businesses, small businesses can build on their personal relationships to end users, said Wendy Tan-White, chief executive of Moonfruit, which builds and supports e-commerce Web sites. She advises using a cover image for a business’s page that relates not only to the product or service but to customers, too.

On the Got What It Cakes storefront, for example, the cover photo shows the owner, Ms. Miller, in her home, with baby photos on the wall behind her and several cakes scattered about the sitting room; the smaller-profile photo is the company logo.

Many of Ms. Miller’s customers are busy mothers like her, and she communicates frequently with them on Facebook. “I am a local, one-person business but I have 5,000 fans,” she said.

Ms. Miller gives the kinds of tips her customers might get from a friend, like what to do with leftover chocolate cake batter: “Put some butter on your griddle and make pancakes with it.”

POST, PIN AND TAG To attract fans and friends, a storefront needs to be dynamic, with frequent posts — status updates and photos. Tagging people in a photo may cause the photo to show up on the tagged person’s page, where friends (and often friends’ friends) can see it.

Deann Kump, founder of TuTu Cute, which sells hair accessories and clothing for mothers, babies and toddlers, hosts a monthly photo contest on her page.

“If someone posts a photo of their daughter wearing one of my products and tags it, their friends will wonder, ‘What is TuTu Cute?’ and go to my page,” she said.

Mrs. Kump opened on Facebook last December and about half of her sales occur on the site.

Ms. Tan-White of Moonfruit suggested that a business give customers incentives to spread the word, offering a discount if they tag its product in a photo. Facebook’s “pin” feature allows users to pin a post, which might be a product of the week or a special discount and pushes the post to the top of a business’s page.

FOCUS ON COMMUNITY Magical Moments Modeling made TuTu Cute a “boutique of the month” on its Facebook page in April so friends of both pages could see it. And Mrs. Kump often promotes the work of children’s photographers she likes; they in turn promote her accessories.

Patrick Skoff, a painter who sells 90 percent of his paintings on Facebook, said some visitors to his page might have been hesitant about buying until they saw the comments and “likes” on new and sold paintings.

“They see all the likes and think, ‘Oh, I better buy that before someone else does,’ ” Mr. Skoff said.

In July he painted 10 paintings a day for 10 days and sold all of them through Facebook.

Darren Gann, co-owner of the Baby Grocery Store, started his Facebook storefront in February (he also has a kiosk in SouthPark Mall in Charlotte). Thirty-five percent of his sales come through Facebook, and Mr. Gann gives lots of help and advice to his customers. “They communicate with us there about everything, from asking about a shipment to what do we recommend for a gluten-free 9-month-old."

Heather Logrippo opened a Facebook storefront in 2009 for We’ve Labels, which sells clothing labels. She routinely goes to the Facebook pages where her customers spend time, like those for quilters or knitters.

“I log on as We’ve Labels and start interacting with people, writing things like: ‘That’s a beautiful scarf you’ve knitted,’ ” she said. Those knitters and quilters will often click on the We’ve Labels page out of curiosity.

OFFER OPTIONS While some small businesses sell only through Facebook, others maintain separate Web sites or have bricks-and-mortar outlets, because not all consumers feel comfortable using their credit card information on the site.

Ashley Gall, owner of Méli Jewelry, which sells jewelry she designs and makes, said buying on Facebook was still too new for many of her customers — 15 percent of her sales happen there — so she also sells on Etsy, Indie Fashion Marketplace and her own Web site.

Most of Mandie Miller’s customers order on Facebook and pay when she delivers the cake or when they pick it up. Yet she still maintains a Web site of her own.

“I do a lot of wedding cakes, and it’s the moms and dads of brides usually paying and they often want to go to a regular business Web site. I also have grandmothers in their 80s and 90s that come to my cake tastings,” she said. “They aren’t on Facebook.”

This article has been revised to reflect the following correction:

Correction: July 25, 2012

An earlier version of this article referred imprecisely to recent changes that Facebook made to its site to allow more than one-time payments by letting customers store credit card information on the site. Those changes apply to virtual goods, not real products.

Digital Domain: Movie Screens, Small to Big to Small Again - Digital Domain

The earliest motion-picture viewing was a solitary experience. One looked through a peephole at the top of a Kinetoscope, a waist-high cabinet in which a light illuminated the frames of a continuous film loop. A magnifying lens was attached to the peephole, but the images remained tiny. That means the first cinematographers didn’t have much to work with.

When projection arrived, movie images could be made life-size in a theater, then larger than life, on a big screen accompanied by big sound. Taking in a movie became not just an immersive experience, but also a social one, with members of the audience sitting in the dark together, laughing, crying and shrieking.

Today, we’ve reached the acme of technical sophistication — and have come nearly full circle. Movie watching is, again, a solitary experience, involving small images on a laptop, a tablet and, tinier still, a cellphone. The convenience is wonderful, of course, but it comes at a price: the loss of the immersive cinematic experience.

Americans will pay to watch 3.4 billion movies online this year, IHS Screen Digest estimates. That’s much more than double the number for 2010.

It’s impossible to say exactly how many of those movies will be viewed on which portable devices. A spokesman for Netflix, the leader in streaming older movie titles, declined to share details about streaming device destinations.

We do know that the newest movie titles, including the most visually spectacular, are available through Apple or Google for inexpensive rental on the small screen. (Apple made movie rentals available for phones starting in 2008, and Netflix introduced a smartphone app in 2010). Cellphone owners can rent “Hugo,” the 2012 Academy Award winner for cinematography, for $3.99 and watch it on a screen whose size is not much larger than the image seen through the Kinetoscope’s peephole.

When an online movie is viewed at home on a giant flat screen and heard through an expensive sound system, the sensory experience surely exceeds what might be had at a rundown multiplex on a bad day. But movies viewed on mobile devices aren’t going to give the brain’s sensorium much stimulation.

“It’s a sensual experience when you go to a theater, if there’s sharp projection and six-track sound,” says John Belton, a professor of English and film at Rutgers University. “That is a very different experience than watching on an iPad” or on other portable devices.

Professor Belton points out that the first projected images in theaters were not all that large. In a movie palace that might hold 5,000 people, an early screen might have been only 15 feet wide. But the images became larger around the time that sound arrived in the 1930s.

Then, in the 1950s, as Hollywood found itself competing against television, it used special lenses to create movies for screens of expanded width. Marilyn Monroe’s body, in languorous repose, would stretch across screens as wide as 64 feet. This was an intentional shift, Professor Belton says, to “an image that overwhelms the spectator,” part of Hollywood’s campaign “to show the limitations of television.” Later, Hollywood reversed course and began selling to television, though that meant cropping its wide-screen pictures so they would fit on a small screen.

The most glorious attempt to fully engage the theater spectator’s senses was Cinerama, introduced in 1952. Filmed with three cameras outfitted with wide-angle lenses, it used three wide screens, put together in a sumptuous near-semicircle of 146 degrees.

“This gives you a ‘first-person’ experience,” says Thomas Hauerslev, editor of the Web site In70mm. “You see what you’d see if you were sitting where the camera is.” He says IMAX “is not a first-person experience — it’s just big.”

Each frame in Cinerama is 50 percent taller than a regular frame, providing more detail. This makes the cinematic illusion “extremely realistic,” Mr. Hauerslev says.

Cinerama was costly both to film and to exhibit, and its commercial life was short. It was used only for travelogues, except in 1962, when the only two story-centered features were released: “How the West Was Won” and “The Wonderful World of the Brothers Grimm.” The Cinerama name was transferred to a smaller format, and then that format, too, was abandoned.

Cinerama was the high-water mark in sensory immersion. Yesterday’s Kinetoscopes and today’s smartphone screens, the low-water marks.

“If you look at the great Hollywood classics in the 1930s and 1940s, you’ll see many wide master shots and sparing use of close-ups,” says John Bailey, a cinematographer with more than 60 feature credits who serves on the executive board of the American Society of Cinematographers. “But with the advent of TV and now also with smaller screens, we’re seeing more close-ups.”

The problem, he says, is that “if you use close-ups immoderately, then when you need to make a more dramatic point, you have no other option but to use extreme close-ups.”

“The best camera,” the old saying goes, “is the one you have with you,” and a similar thought is apparently held by increasing numbers of movie viewers, happy with the screen they always have with them. And movie producers, just as they have in the past, will probably keep adapting, changing movies themselves so that they look better on a tiny screen.

“You can say it’s ‘watching a movie,’ ” says Professor Belton of viewing on mobile devices. “But it’s not cinema.”

Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University. E-mail: stross@nytimes.com.