Amazon: The dark horse of 2012
By Hayley Tsukayama,
Amazon has earned a reputation as a dark horse in the tech industry, walking its own road to success through low profit margins to long-term profits. It’s not as splashy as Apple or Google. It doesn’t have a social network. Its operating costs are huge. But Amazon’s plans for the future came into focus this year as the company released new Kindle models and forged new partnerships to build out its streaming video catalog.
Hardware commitment: Amazon rolled out more models of its low-cost Kindle Fire this year, as well as new versions of its Kindle e-readers. All adhered to the principle that Amazon has always had with its hardware: to make low-cost devices in order to hook users into the content over time. By offering tablets that can compete against 7-inch and 10-inch devices, Amazon has made it clear that it’s taking the tablet space very seriously and intends to compete on all levels.
Taxation changes: The company’s battle over sales taxes continued this year, with Amazon agreeing to collect sales taxes in California, Texas and Pennsylvania. The company had previously argued that it should be exempt from state sales taxes simply because it had distribution centers in those states.
Amazon has since lent its support to the idea of unified interstate sales tax, which it says will allow retailers to collect taxes easily without having to deal with a patchwork collection of tax law across the country.
Content partnerships: To support its hardware sales and its Web presence, Amazon partnered with several studios and television producers to provide a wider breadth of streaming content through its site. These included big partnerships with Discovery Communications, Epix and ESPN -- all of which added to its Netflix-like movie service, Amazon Instant Video. LivingSocial dragged down the company’s profits, but most of the new alliances worked out in Amazon’s favor.
Amazon also introduced a system that lets authors easily self-publish books and released its first mobile and desktop games through Amazon Game Studios. And it benefited from a case at the Justice Department that alleges Apple and major publishers were fixing prices on e-books; the company was able to drop prices on e-books even further.
Cloud services: Amazon’s Web Services power a good deal of the Web, and had its own triumphs and tribulations this year. AWS powered the Obama campaign’s data collection tool, and the campaign has not been shy about mentioning how Amazon’s cloud tools helped with data management throughout the election.
Yet Amazon also saw its fair share of public outages -- most recently when a service outage took out the Netflix movie service on Christmas Eve. Problems with AWS this year, particularly after storms, led to intermittent outages at several Web properties including Reddit, Instagram, Foursquare and HootSuite.
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