From the pinnacles of power by Fortune editor at large Patricia Sellers
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March 30, 2009, 3:07 pm

Amazon: thinking beyond the Kindle

We love companies that underpromise and overdeliver. Apple (AAPL) is one. Another is Amazon.com (AMZN). Founder and CEO Jeff Bezos thrives on overdelivering.

I had my own Jeff Bezos multimedia experience last night as I sat in my living room and played with my new Kindle 2 while watching Bezos on the Charlie Rose show. (Click here to see the show from late February–yes, I was playing DVR catchup.) The Amazon boss certainly doesn’t set his bars low. “Every book in every language” is his goal for the Kindle, in terms of acquiring e-content.

Bezos’ ambition got me thinking: What if he could get Kindles–or the next generation of his reading device–into the hands of the poorest of the poor? Give everyone a Kindle to learn–a la Bill Gates setting as Microsoft’s (MSFT) mission “a computer on every desk and in every home.” For now, the Kindle’s wireless connectivity works only in the U.S. But  Amazon, which already does half its business abroad, obviously has sights set on the Kindle’s global opportunity.

The Kindle already does much more than you might expect from its marketing pitch. (For instance, I can send any document from my computer to my Kindle–and click the text-to-speech function to listen to my docs if I prefer audio to reading them.) No question, the Kindle and its rivals will transform the book market. We’ll see lots of custom e-books–like Stephen King’s Ur, the novella he wrote for the Kindle 2. We’ll see a dramatic shrinkage in time to market. Want an e-book? Send us your manuscript and we’ll publish tomorrow! Bezos also talks about music embedded in e-books. Cool.

If you want a quick fix on the upheaval in publishing, check out the front page of the business section of today’s New York Times. One story: “You’ve Read the Headlines. Now, Quick, Read the Book” tells how publishers are rushing manuscripts to market, with the help of e-books. “Do-it-Yourself Magazines, Cheaply Slick” details a new Hewlett-Packard (HPQ) web service called MagCloud that enables you–yes, you–to produce your own magazine cheap and quick. Like YouTube for wanna-be publishers.

On the same front page is a story about how Hearst may shutter the San Francisco Chronicle if it doesn’t find a buyer for the money-losing paper. Yes, it’s all about survival of the fittest. The head of Hearst Interactive Media happens to be Ken Bronfin, my college pal from 30 years ago. (We worked together on the University of Virginia’s newspaper, back when we cut and pasted copy–literally, with glue.) Ken is also the chairman of E Ink, the hot little company that provides the technology for the Kindle, the Sony (SNY) Reader, and other e-book devices. There’s lots of hope in publishing, Ken will tell you. But success hinges on adaptability.

My colleague Michael Copeland lays all this out smartly in his recent Fortune story, “The end of paper?” Also check out his exclusive on Hearst’s plans to launch a device custom-designed for newspapers and magazines this year. Read on!pattie-signature15

As another commenter noted we need a way to rent or check out books (or some other subscription-based model) for the Kindle to truly be a good value. As it stands, $359 for the device and then 75% of the cost of the physical book for everything you read on it is no deal at all.

Posted By P Diddy, Dallas Texas : July 29, 2009 4:44 pm

Kindle is pretty cool. A friend of mine bought one recently so I have had the chance to check it out. It’s convenient and actually comfortable to read on. It’s not the same as the normal backlit LCD.

Amazon has done a great job with the new Kindle. It’s probably a matter of time that it clashes with Microsoft, Google, and EMC on clouding computing. Speaking of which, I recently also came across a pretty neat “filler finder” for Amazon’s free shipping. It is at:
http://www.superfiller.com

Perhaps others will find it useful too.

Posted By John, Vancouver, WA : April 2, 2009 6:29 pm

Such arrogance from A in Atlanta. You complain, “A,” that we don’t like reading things in the manner that you like. You then tell us that we will certainly like your way, and you go on to predict that the way we like to do things is going to disappear because yours is so much better.

How about this: you read things as you like, and I’ll read things as I like. Stop trying to push your way onto others, and I promise I won’t try to convert you back to paper books. Okay?

Posted By Adam, Mount Vernon, Ohio : March 31, 2009 10:31 am

I’m with George that free public access through libraries is good, but I must clarify one issue here. George said about high book prices: “This is by design, since publishers have long wished to overturn the social balance between copyright owners and the public interest.”

The situation is worse. Publishers have never been copyright owners. Authors are copyright owners and Publishers are licensors. Yet they control between 85% and 98% of the price the consumer pays, paying only 2% to 15% of the price to Authors often delayed by two years. Ebook readers from Amazon and Sony and the iPhone are promising, but a current agreement between ebook makers (Amazon is also the retailer) and Publishers locks Authors out of this channel. This must change.

Posted By Ashley Grayson, Los Angeles, CA : March 31, 2009 10:20 am

Why does everyone here seem so hellbent on supporting or criticizing this device? Can’t a person just like or dislike something without launching a crusade to polarize others into their point of view?

Posted By Jason, Atlanta, GA : March 31, 2009 10:06 am

Just what the world needs. Another reason to spend countless hours staring at an electronic screen ignorant of the effects these types of activities will have in the long run….

Posted By Jayson, Yuba City, CA : March 31, 2009 2:37 am

I think that it is a great idea, and a step in the right direction. Anything that can get more people to read is a good thing. Many people don’t have time to go to the library, and no one said you have to buy it if you can’t afford it.

I am a student, and if they offered more textbooks on it I would buy one in a second. The fact that I could have all my textbooks in one small device is genius.

Posted By Joe Hansey, Albany Oregon : March 31, 2009 1:34 am

As a person who is not rich, but who loves to read – I saved my pennies for several months and bought a kindle just as version 2 came available. I love it, I love the functionality of it, and I recommend it to everyone who loves to read. It is astonishing to me that individuals who have never even seen one, held one, or used one have such negative things to say about it.
Don’t knock it until you try it – you will be pleasantly surprised.

Posted By Rebecca, Colorado Springs, Colorado : March 30, 2009 11:27 pm

AAlthough they are a wonderful resource, libraries are not free, or almost free. Taxpayers subsidize libraries. If you use them, you may be getting fair value for your tax dollar, if you do not use them, you certainly are not receiving fair value. In addition, there is a transportation cost for accessing a library and the value you place on your time. Note I support libraries, as I think they serve an important purpose; I am simply correcting a potential misconception about their cost.
Frankly, with the right blend of copyright reform and technology, we may see a new form of library. What if Amazon and/or other companies offered e-books for rent, say $1.99 for two weeks or created a subscription model, say $15.99/month for unlimited access to any e-books. This would have a significant impact. As would companies offering a subsidized option, say $25.99/month and the e-book reader is free, if you agree to a two-year contract.
Lastly, e-book reader will not be the only methodology for reading, at least in the near future. I for one like real books and I collect them. I will not stop collecting, just because of some cool e-book features. There will also be times where I will want to access a book via my computer or via my smart phone. There needs to be a purchase all access methods version for these needs.

Posted By Scott, Madison, WI : March 30, 2009 9:17 pm

The Kindle has possibilities, but consider this: I have read over 9000 books, current fiction and nonfiction, for free (or almost free) via my local library. They have obtained books on my behalf from as far as 2 states away, again for free.

Amazon and the Kindle demand an absurdly high price per book/reader compared to printed books, without even a nod to durability or reuse. This is by design, since publishers have long wished to overturn the social balance between copyright owners and the public interest.

I have no interest in paying hard cash for a “product” that is worth even less than the paper it’s not printed on!

Posted By George, San Antonio, Texas : March 30, 2009 6:45 pm

I agree with Manny. You can buy a lot of books for that $359. Better yet, hit the library!

Posted By Lisa, Folly Beach, SC : March 30, 2009 5:15 pm

I’m so tired of the criticism of the Kindle by people who have never even seen one first hand. I own both versions and it has changed my reading habits for the better. If I am reading a “traditional” book, and it becomes available on the Kindle, I’ll purchase the Kindle book so that I can finish it there. The experience is so much better. Also, as to price, again people are nuts. Sure, it’s not 50 bucks. But, a large memory ipod is the same cost. I don’t hear people complaining about that. Try one…it’s just a matter of time before we are all reading everything from an electronic device. Like it or not, that’s a sure thing.

Posted By A, Atlanta, GA : March 30, 2009 5:09 pm

Last time I checked, “the poorest of the poor” didn’t have enough money to purchase e-books that cannot be shared for $10+. That’s precisely why we have public libraries, where anybody can check out latest books for free. Don’t get me wrong – eventually, the Kindle (or one of its competitors) will replace books but it won’t be anytime soon if the prices and copyright restrictions remain the way they are now.

Posted By Grigory Lukin, Reno, NV : March 30, 2009 4:32 pm

Col in Seattle—Michael Copeland’s story details Hearst’s plans, based on sources who didn’t want attribution. We prefer not to use anonymous sources, but in this case we did use them because the sources were very strong. Hope this helps!

Posted By Patricia Sellers : March 30, 2009 4:01 pm

Kindle is a rich man’s gadget, who in the rest of the world can afford??

Posted By Manny, L.A., CA : March 30, 2009 3:57 pm

Re: “Also check out his exclusive on Hearst’s plans to launch a device custom-designed for newspapers and magazines this year.”

The article you reference has no hard facts about Hearst’s “plans” to launch a device. It’s based on unattributed “industry insider” comments – nothing on record from Hearst.

May I suggest that the reason that news outlets are failing is their ever increasing use of unsubstantiated claims, conjecture and rumor. Just the facts, please.

Posted By Col, Seattle WA : March 30, 2009 3:44 pm
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Pattie SellersPatricia Sellers has written some of Fortune's most talked-about cover stories, including "Can Meg Whitman Save California?", Melinda Gates ("The $100 Billion Woman"), "MySpace Cowboys," Martha Stewart ("I cannot be destroyed"), Ted Turner ("Gone with the Wind") and Oprah Winfrey ("Oprah Inc."). And she has broken ground with insightful pieces on career management issues such as ego ("Get Over Yourself!"), and "Charisma: Do You Need It? Can You Get It?" Pattie chairs the annual Fortune Most Powerful Women Summit, the preeminent gathering of women leaders in business, philanthropy, government, academia, and the arts. And she has helped oversee Fortune's "Most Powerful Women in Business" cover package since its launch in 1998. She started at Fortune in 1984, covering the big consumer brand companies.
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Jessica ShamboraJessica Shambora started with Fortune as a reporter in June of 2008, following a stint as assistant editor at Travel+Leisure Golf. Shambora has written for Sports Illustrated, SI Latino, Women's Health, and Triathlete. She is a frequent contributor to Postcards.
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