• Ladies & Gentleman…finally there’s something worth writing about.  After literal years of rumors and predictions, Apple has unveiled its tablet-based computer, appropriately titled the iPad.
• Watch a quick video overview of it here.
• Price starts at $499 for the 16GB WiFi ranging all the way up to $829 for the 64GB WiFi & 3G.
• Does this signify the soon-to-come death of Amazon’s Kindle?  Will the device be widely adopted by the health industry? ….only time will tell, but surely it will be exciting to see.

Amazon today announced that it has reached an agreement to acquire Zappos.com, a leader in online apparel and footwear sales (and Twitter customer service). “Zappos is a customer focused company,” said Jeff Bezos, Founder and CEO of Amazon.com. “We see great opportunities for both companies to learn from each other and create even better experiences for our customers.” 
• Under the terms of the agreement, Amazon will acquire all of the outstanding shares and assume all outstanding options and warrants of Zappos in exchange for approximately 10 million shares of Amazon common stock, equal to approximately $807 million based on the average closing price for the 45 trading days ending July 17, 2009. In addition, Amazon will provide Zappos employees with $40 million in cash and restricted stock units. The acquisition is expected to close during the Fall of 2009.
• Following the acquisition, the Zappos management team will remain intact and Zappos will operate its successful brand, customer experience and unique culture of service independently with headquarters in Las Vegas, NV. “We are joining forces with Amazon because there is a huge opportunity to utilize each other’s strengths and move even faster towards our vision of delivering happiness to customers, employees and vendors,” said Tony Hsieh, CEO of Zappos. “We will continue to build the Zappos brand and culture in our own unique way, and we believe Amazon is the best partner to help us do this over the long term.”

Update: The selling price was $920M. Also, sources close to Zappos said that the company was forced to liquidate by Sequoia Capital (their major investor). Zappos had plenty of cash to hold out until the IPO market recovered, pulling in over $1B in gross revenue in 2008, $625M in net revenue and had an EBITA greater than $40M. Times must be tough for the Sand Hill legend. (PE Hub)

• Netflix stock surged today on news that it may be acquired by Amazon. The stock is currently up over 5% in trading today, at an 11-week high. Both Amazon and Netflix are in the midst of a full-on push to get digital video content into the living room. Amazon via its On Demand service, and Netflix through its streaming service(TC). The two are battling the likes of Apple (with the Apple TV) and to some extent Microsoft (though Netflix also works on the Xbox 360 — and Netflix CEO Reed Hastings is actually on Microsoft’s board).
• NetFlix may have struck gold with their $1 million challenge to developers who could come up with a reccomendation algorithm that beats theirs by 10%. The contest has been running since 2006, and supposedly there is a winner. Amazon is the king of consumer reccomendations, and this offering from NetFlix paired with their movie rental market share, could make a killer addition to the Jeff Bezoz empire. NetFlix’ (NFLX) current market share is $2.43B.

• Foodista.com, the online cooking encyclopedia everyone can edit, announced today that it has completed a Series A financing led by Amazon.com, Inc. (NASDAQ: AMZN). The amount of Amazon’s investment and the terms were not disclosed, but it’s rumored to be at or around $600K. “In less than a year, Foodista has created an exciting new way for food lovers everywhere to share their culinary passion online,” said Jorrit Van der Meulen, Amazon.com Vice President, Content Sites.

Amazon’s new Kindle DX boasts a newspaper/textbook friendly screen is 2.5x bigger than the standard Kindle. Partnerships range from the New York Times to Arizona State Univesity. Stats inlcude:

• 9.7-inch E-Ink screen (1200 x 824 with 16 shades of grey)
• 1/3 of an inch thick (10.4″ x 7.2″ x 0.38″)
• 4GB Storage for 3,500 books (a bump from 1,500)
• Unspecified but “long” battery life
• Native PDF support through built-in reader
• Automatic landscape/portrait text rotation
• Line length adjustments (determine the width of text on the screen)
• Navigation buttons moved to right side of screen only
• EVDO (of course) for 60-second book transfers

What’s the biggest setback? Prcie point will be $500. Count me out.

• Amazon is holding yet another press conference regarding the next generation of the Kindle. The last time Amazon  held a press conference in New York City was in February, when it introduced the Kindle 2.0. Now the company has scheduled another one for Wednesday morning at Pace University in Manhattan.
• It’s almost a guarantee the event revolves around Amazon’s new large screen Kindle. It is already publicly knowledge that they are partnered with the New York Times on the project, which is going to attempt to revitalize the dying newspaper industry among other things. What I have yet to see covered on other blogs thus far is the duality of this device. Just as important as the newspaper partners are the Text Book publishing houses, who have been interested in the idea of a larger screen electronic device since word started to spread last year. The revenue associated with text books is far more compelling than what just an electronic newspaper device can bring in. Amazon currently sells a subscription to the Times for $14 a month. That version has fewer features than the paper’s free Web site–no video, no color photography, and just one update a day. In February, the paper said Kindle subscriptions were a “modest” business (AllThingsDigital).
• One set back to the launch of this new device is increased competition compared to what the original Kindle had to deal with.  News Corp. (NWS) is said to be building one, and world renowned publisher, Hearst, is already working on its own. Alternatively, there are many other smaller players attempting to do the same thing.
• Will these devices help save the newspaper industry or is this just a last chance effort that won’t work?

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• Once touted as the company taking on Amazon’s Kindle by developing an eReader app for the iPhone (Stanza), Lexcycle has now been acquired by well, Amazon. Stanza allows users to browse a library of around 100,000 books and periodicals for the iPhone, many of them in the ePub format — a widely accepted standard for e-books that Amazon has yet to support with its proprietary Kindle platform (Bits, NyTimes)

Lexcycle said, “We are not planning any changes in the Stanza application or user experience as a result of the acquisition. Customers will still be able to browse, buy, and read e-books from our many content partners.”

The Lexcycle team will join Amazon and help them lay the ground work for owning more platforms such as Android, Palm Pre and Windows Mobile devices. Amazon said Lexcycle is a smart, innovative company, and is looking forward to working with them.

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• Yep. That just happened. The labels are getting what they want all across the board now with variable song pricing showing up on Amazon, Walmart, Rhapsody, etc. This comes a day after Apple made their big push to move 90% of songs in the top 100 to $1.29. Notice the top screenshot however, which contains almost all the same songs as the iTunes top list. Only a few of the songs in Amazon’s are selling for $1.29. We polled yesterday if anyone would go to Amazon to pay $0.30 less for a song. 67% said yes, others wouldn’t bother with the inconvenience.

Stay up on your Apple news:

iTunes Variable Pricing. A Deal Breaker For Consumers?

Next iPhone To Have FM Transmitter

Apple Order Confirms Major Camera Upgrades For iPhone

• With the end of Q1 2009 almost here, trying to cut costs at the last minute to impress investors is becoming a quick trend. We just heard about Google layoffs, now 5,000 people from IBM are losing their jobs in the U.S.  Amazon cut 210 people at three distribution centers in Nevada, Indiana, and Pennsylvania. The New York Times also announced a 5 percent cut(1oo people) of its business operations. This is not a good sign of what is to come out of Q1 earnings. Companies are clearly trying to look more lean as they woo  investors on staying with them through tough times.

• GameStop CEO Dan DeMatteo isn’t the slightest bit concerned about online retailer Amazon’s venture into the used videogame trade-in business. “I give the probability of this working at zero,” DeMatteo told Edge in a Thursday phone interview. Sounds like a major bluff.
• DeMatteo is referring to Amazon introducing a program this week, in which consumers can ship, for free, games in good condition and receive an Amazon gift card in an amount dependent on predetermined trade-in values. GameStop tried the same model several years ago, and it failed. He thinks immediacy for currency when consumers want to buy a new game outweighs the convenience or value factor for shipping a game into Amazon.
• Keep in mind, business models that have failed in the past with other companies, has never stopped Amazon from succeeding in those areas. Amazon CEO, Jeff Bezos, is fearless.

• It’s been a heated discussion over the past few months, whether or not the iPhone could be a worthy competitor to Amazon’s Kindle. Multiple eBook reader applications were popping up on the iPhone, some reaching as many as 500,000 book downloads in a short period. I had said that those who already own an iPhone, but don’t want to shell out $359 for a Kindle, will gladly settle with a free iPhone app that gives you access to most the same books, only on a smaller screen. Today, Amazon came out of the blue with their own Kindle iPhone App squashing all competition rumors. Those with or without a Kindle can now enjoy over 240,000 books, including 104 of 112 New York Times Bestsellers, on the iPhone and iPod touch. Amazon’s new Whispersync technology saves and synchronizes a customer’s bookmark across their original Kindle, Kindle 2, iPhone and iPod touch, so customers always have their reading with them and never lose their place. Bravo.

• Just as Hearst released there plans to release a notepaper sized e-reader today, rumors of a competing Kindle 3 have been leaked from inside Amazon says FastCompany. Even though the Kindle 2 has just been released, there are still complaints that the screen is “still relatively tiny, there’s no touch-screen function and stylistically it’s still somewhat of a mess with about 30% of its top surface dedicated not to its primary function as an e-book visualizer, but for a keyboard”
• Just like the Hearst model, the Kindle 3 is also said to have a notepaper-sized screen, better for viewing magazine and newspaper-style content, plus room for advertisers. As I said in my last post, the only chance a large screen e-reader has is if it finds its way onto every-one’s coffee table and is loaded up with the latest papers from around the country when I turn it on. But will that succeed? The price point will be a major factor, as competing low-priced laptops and netbooks along with the upcoming tablet computers offer more than just reading capabilities. Example: I sleep with my laptop 5 feet away from me when I sleep. As soon as I wake up I can take care of email, blogging and of course, reading the news. It will take something special for me to want to reach over for an e-reader with limited functions as my morning replacement. Also consider the fact that a 6-inch Kindle is ultra-portable and can fit in my laptop bag. A notepaper sized product will have to find it’s own ride as I don’t have room for it, not to mention anything I can do on my e-paper, I can get done and more on my laptop. I think Bezos, Amazon’s CEO is smart enough to consider these major factors, and will steer clear of the large screen devices. Trying to find a new device for the news is just not practical. It is widely known that Amazon is working with schools to find a solution to digital text-books, which is about the only thing a large screen makes sense for.
• I think a large Kindle for newspapers is a terrible rumor at best.

• You know print is dead when the CEO of your publishing company wants to put out an e-Reader to cannibalize business. Such is the case with Hearst Publishing’s CEO due to plummeting ad revenue for newspapers and magazines, and rising costs for paper and delivery. Hearst publishes magazines such as Cosmopolitan & Esquire as well as newspapers like  the San Francisco Chronicle. According to CNN, Hearst has developed a wireless e-reader with a large-format screen fitted with reading and advertising requirements of newspapers and magazines. Distributing their paper through a wireless device will cut costs of up to 50%.
• When asked about the Kindle, Hearst seemed to think that they wouldn’t be competing heavily. While the Kindle has a 6inch screen, Hearst’s eReader will be the size of a sheet of paper, offering readers a similar experience to reading the paper, and giving advertisers the space and attention they require. The device is set to release late this year. Hearst and its partners plan to sell the e-readers to publishers and to take a cut of the revenue derived from selling magazines and newspapers on these devices. Payment methods and subscription prices will be up to the publisher.
• I commend Hearst for beginning the revolution to save the $300 billion global publishing industry from becoming completely destroyed as it transitions to digital, but a paper sized device does not seem feasible. Just because something doesn’t have a keyboard, and it’s light, doesn’t mean that it is all the sudden different than a laptop. 9-inch netbooks can be purchased for under $400 now. Alternatively, we will see  large changes in the laptop/netbook industry offering tablets with a touch screen interface in the next two years. Both offerings will have many consumers questioning why they would ever want two different devices, one which can only deliver the newspaper and the other that can do everything. It just doesn’t make sense. The Kindle is a global distributor for books, a much needed device that replaces the need to lug around multiple books, and is a must-have travel companion. Why I would ever want to find a place to put a paper sized e-reader to fetch the paper, I have no idea. Distribute them for free, I’ll put it on my coffee table and see if I ever turn it on. Sorry guys, let me offer you some free consulting. It’s a dead idea.

• Coming February 24th. The price stands at $359. They weren’t kidding when they said the Kindle 2 would make generational strides like the iPod. Thinner than a pencil, and looking so clean. [Images: Engadget]

• As we prepare for the launch of the Kindle 2.0, Amazon’s famous e-Reader, many have been wondering just how many have actually been sold. Citigroup analyst Mark Mahaney estimates that Amazon sold 500,000 devices last year and will become a $1.2B a year business by 2010. Mahaney derives his 500,000 number via Sprint’s filing, who powers the wireless connectivity for Sprint. Will Sony let another newb come in and embarrass them once again in an industry they could have dominated or will they rise to the challlenge? (cough cough, iPod).

Other Must-Read Amazon Stories:

How Amazon Will Fare In The Earnings Call

Amazon Kindle 2 Coming February 9th

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Amazon’s Latest Blow To eBay, Stops Offering BillMeLater

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