Rumors of a 7- to 7.85-inch iPad have been swirling around for a long while now. We’ve seen reports get killed moments after they initially break, only to be sneakily resurrected weeks or months later. The rumor simply won’t die.

The problem, however, is that this one in particular is a tough nut to crack. When you take all the evidence both for and against a little iPad, you’re still left with no real conclusion.

So conclusion aside, here are some of the reasons Apple may, or may not, introduce the little iPad:

For:

The greatest threat to Apple’s iPad is the 7-inch Amazon Kindle Fire. It retails at about $300 less than the iPad, sports a solid browser, has access to plenty of Android apps, and is a great hub for any and all of Amazon’s media content. It also happens to be a 7-inch tablet. Should Apple choose to offer a smaller iPad at a lower price (which the market would most certainly demand), it could snatch back the market share Amazon’s stolen in the past few months.

Gaming on tablets is big, but too big a tablet ruins the fun. According to numbers out of comScore in November, 2011, gaming topped the list of entertainment activities on a tablet, beating out watching video and listening to music, with 67 percent of owners gaming at least once a month, and 23 percent playing daily.

That said, Apple’s 9.7-inch iPad isn’t what I’d call the best for gaming. Graphics and display quality are top-notch, to be sure, but holding the device for very long — especially stretching that thumb around the edge — can be incredibly tiring. Despite the fact that it has failed me considerably, I still prefer playing games on my 7-inch BlackBerry PlayBook, even if there aren’t many games to choose from.

Most smaller Android tablets use a widescreen aspect ratio, leaving a dead zone in the middle of the screen that’s mostly untouchable. The iPad 2 sports a 4:3 screen, which makes even the 10-inch model full touchable. A 7-incher would only be that much better, with greater pixel density and a lighter, easier feel in the hand.

Apple is kind of obsessive when it comes to “thin and light,” and a smaller iPad would also mean a thinner iPad. See, if Apple were to build a smaller iPad, chances are it’d be built using the normal screen assembly technology that allows for the iPad 2′s incredibly thin profile.

However, a smaller iPad/screen means a smaller battery, which usually takes up a solid chunk of space under the hood. Less screen means less power needed for backlighting it, which inevitably takes us back to a smaller battery.

Thin and light! Thin and light! Thin and light!

Amazon may release a 9-inch Fire… Why not fight Fire with fire? The word right now is that Amazon has plans to release a 9-inch Fire to compete with the iPad. While, like the 7-inch Fire, it probably won’t have all the capabilities of the iPad, a larger Fire will still retail at a (much?) lower price point than its competitor. For people who mostly browse the web, read, email, and Facebook/Twitter, a lower price point will be more than enough incentive to venture away from the iPad.

To be clear, it’s not like Apple’s in some dire position. Cupertino still dominates the market with a 58 percent share as of January, 2012. But that’s down 10 percent from the previous quarter, while analysts claim that 40 percent of Android’s 39 percent share in the tablet market are attributable to the Nook Tablet and the Fire.

It’s undeniable: Apple is slowly but steadily losing share to Android, most notably the Fire, and what better way to steal it back then by launching a 7-incher right in Amazon’s face?

Against

The most notable and evidential reason why Apple wouldn’t release a little iPad is because Steve Jobs said so. In an earnings call in October of 2010, Jobs said that “7-inch tablets are tweeners: too big to compete with a smartphone and too small to compete with the iPad. These are among the reasons that the current crop of 7-inch tablets are going to be DOA — dead on arrival.”

Jim Dalrymple points out that Apple made both a 7- and a 9.7-inch iPad right at the beginning and chose to go with the bigger version, which at a first glance would indicate that it’s not going to happen. At the same time, that was a long time ago if we’re counting in tech years and it wouldn’t be the first time Jobs obliterated a product category only to announce something similar to it shortly after. Anyone remember iBooks?

Why release a product to compete in a market you already own? Though its market share has fallen since its debut, Apple still absolutely dominates the tablet market right now. A 58 percent share of a market, with not one of its competitors anywhere near that share, leaves Apple with no real reason to put anything smaller in stores.

I’m sure some of you will say I made an entirely contradictory point up there with Amazon grabbing share, but it’s all about perspective. Perhaps one person thinks that now is the time to plug up any leaky market share dribbling into Amazon’s hands, while someone else may think that Apple should wait until it absolutely has to throw a lower-priced option into the ring.

Too many choices can be a bad thing, and Apple’s well aware of this. Look at iPhone releases: one model at a time. Apple’s all about making one absolutely stellar, blow-your-mind, make-you-believe-in-magic product and selling it well. Design, sell, repeat.

Tablets are meant to be simple, easy-to-use products. It’s not like a PC, where users have to review list after list of specs and configurations before figuring out what fits. Some companies, like Samsung, want to stretch across every category of the tablet market with different spec’d and sized models under a shared brand. One of the iPads greatest advantages is being the iPad, rather than an iPad Lite, or an iPad Air, or whatever.

It would be a deviation from Apple’s current strategy and over-arching mission statement of “Keep it simple, stupid” if they were to start switching things up now.

So… Will Apple release a 7-inch iPad? Truth be told, your guess is as good as mine, but it would seem that there are advantages in either case.

Amazon used to be able to sell the Kindle based on its readability in sunlight. That’s a fair comparison to make and the old advertising featured little more than people being happy reading. To wit:

But the commercial above takes a different tack. The old “it works in the sun” line is still is still in there, but I assure you that Amazon is most interested in getting the more expensive and potentially more lucrative Kindle Fires out the door. What do they do? They suggest that the kids can hang out in the shade with their Fires while mom schools an old fool and his iPad. And all three of those devices still cost less than an iPad (or similarly outfitted tablet). Sneaky, sneaky, Amazon.

In fairness, two Fires and a standard Kindle are still cheaper than an iPad, but I suspect the kiddos in that Daiquiri-stained sloth tent would still rather watch videos and play games on a more capable device. But this is Amazon’s version of price-conscious Club Med, and who are we to judge?

According to GoodEReader, Amazon is planning to open a retail store in Seattle this year where they will sell Amazon-exclusive books and, more importantly, Kindles of all kinds. While this looks to be more of a pop-up retail presence than a fully-fledged store, if I were in publishing I’d be circling the wagons right now.

To be fair, Amazon’s own publishing offerings are pretty wonky so far. There haven’t been many runaway successes coming out of the house although Seth Godin and Tim Ferris will soon be bringing their own brand of publishing success and there are some interesting cross-cultural titles coming out. But that’s not why publishing has to worry.

The Kindle was Amazon incarnate, a way for Amazon to bring its online presence into the real world. A physical Kindle store – one that exists in a mall or popular area, even for a short period – is like the third coming. It’s basically a chance for Amazon to grab every else they have missed during the initial run up in Kindle popularity. We’re talking older folks, luddites, grumps, and folks who claim that “reading it in paper” is better. To have them walk up to a display of working Kindles, newly minted and displaying the latest Stephen King book, is the only way Amazon will convince them that going digital is the only way to go.

This will also encourage the movement from the agent-publisher-distributor model of book publishing into a direct to consumer model that Amazon will spearhead. By showing potential authors that they can get their books bound in handsome Kindle editions, they’ll be more likely to go that route instead of pounding fruitlessly against the gates of big publishing. It’s obviously a no-brainer to many of us, but old paradigms die hard.

As I said before, the Fire is Amazon’s Trojan Horse. However, rather than the wary hold-outs bringing in Amazon’s market by buying the fire, Amazon will bring the Trojans to their own branded stores.

The store will appear in Settle in the next few months and presumably be the first of a nation-wide roll-out. I suspect it will be a bit of a loss for Amazon but hopefully it will convert the last hold-outs to the benefits of ereading.

When Steve Jobs took the stage at Macworld in 1998, he did something unusual. For the first time in any presentation he had ever given, he ended with a slide reading, “Oh, and one more thing…” This phrase would of course enter the Apple lexicon in the subsequent years. But what was it that was hidden behind this first “one more thing”?

“Think Profit.”

You see, Jobs had just been named interim CEO in September 1997 after successfully pushing out the man who brought him (back) in, Gil Amelio. And he had good reason to do that: under Amelio, Apple had lost $1.04 billion in the prior year and was less than ninety days from being completely broke. Just a few months later, as he announced on stage, Jobs had the company back in black: a $45 million profit — the first profit the company had seen in more than two years.

Jobs’ move wasn’t magic. He slashed thousands of jobs and killed off dozens of products. Walter Isaacson details this time in his Steve Jobs’ biography. One part in particular stuck out to me.

In 1997 Apple was selling StyleWriter color printers that were basically a version of the Hewlett Packard DeskJet. HP made most of its money by selling ink cartridges. “I don’t understand,” Jobs said at the product review meeting. “You’re going to ship a million and not make money on these? This is nuts.”

I was thinking about this in relation to Amazon’s recent earnings. The company posted a record $17.4 billion in revenue in Q4 2011, but from all those sales, they were only able to squeeze $177 million in profit. Compare this to Apple’s most recent quarter in which they posted a record $46.33 billion in revenue and, more importantly, a record $13.06 billion in profit. The margin difference could not be any more stark.

Obviously, the first thing everyone jumps to is to say that Amazon and Apple are in two different types of businesses. Amazon is a retailer while Apple sells hardware. But the line is increasingly blurring between the two companies. Amazon now sells a number of hardware products thanks to its Kindle line. Apple, meanwhile, sells plenty of content via iTunes.

The thing is, even with Amazon entering the hardware game, they’re not making the kind of money that Apple is. In fact, with the new Kindle Fire tablet, it’s believed that they’re losing a small amount of money on each one sold. “This is nuts,” you could imagine Steve Jobs saying once again.

But is it nuts?

Amazon clearly views products like the Kindle Fire as a loss-leader to keep customers happy and keep them shopping for more content. Apple’s model is the exact opposite. Content sales are a loss-leader to keep customers happy and keep them buying new hardware.

At least for now, one model is working, one isn’t. Not only did Amazon only make $177 million on sales of $17.4 billion last quarter, they’re warning that they could actually lose money this quarter. They have enough money in the bank to sustain this for sometime, but at some point, they’re going to have to get back in the black in a meaningful way. And if they keep selling hardware, investors are going to look at their margins compared to Apple’s and wonder what the hell is going on?

Amazon has said time and time again over the years that they’re perfectly happy to live in the low-margin space. But these most recent margins are likely getting too thin for comfort. The Q4 profit numbers are 58 percent lower than they were a year earlier. Presumably, they have a plan that justifies these losses for the sake of the bigger picture. But again, it’s not unreasonable to think that this bigger picture will eventually pit Amazon against Apple directly.

Amazon may find itself in a race to get to Walmart-size revenues before there’s true competition in the space. Last quarter, Walmart pulled in $109.5 billion in revenue, which led to $3.3 billion in profit. As with Amazon, the margins are awful, but at that scale, it doesn’t matter. Walmart’s quarterly revenue more than doubled Apple’s which resulted in profit less than a quarter of what Apple saw — but at the end of the day, Walmart still walked away with over $3 billion in their pockets. That’s all that matters.

As their dance with the dreaded red line proves, Amazon isn’t anywhere close to operating the way Walmart does yet. In fact, Amazon’s margins are so slim that Facebook, which just filed to go public today, recorded nearly double the profit of Amazon last year ($1 billion versus $631 million). That’s pretty crazy when you think about it.

Jobs’ decision to exit Apple from the printer business 15 years ago proved to be a smart move. Of course, had Apple been selling ink — which has ridiculously high margins — it may have been a tougher call. Amazon’s problem is that the “printers” they’re selling have crappy margins and the “ink” they’re selling has crappy margins. It’s starting to sound a little nuts.

Amazon has just released fourth quarter 2011 earnings, missing sales expectations but beating earnings estimates. Net income decreased 58% to $177 million in the fourth quarter, or $0.38 per diluted share, compared with net income of $416 million, or $0.91 per diluted share, in fourth quarter 2010. Net sales increased 35% to $17.43 billion in the fourth quarter, compared with $12.95 billion in fourth quarter 2010. Analysts are expecting earnings of $0.17 cents a share on revenue of about $18.3 billion.

“We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our bestselling product across both the U.S. and Europe,” said Amazon CEO and founder Jeff Bezos. “Our millions of third-party sellers had a tremendous holiday season with 65% unit growth and now represent 36% of total units sold.”

Operating income was $260 million in the fourth quarter, compared with $474 million in fourth quarter 2010. Operating cash flow increased 12% to $3.9 billion for 2011 compared with $3.5 billion in 2010. Free cash flow decreased 17% to $2.09 billion in 2011, compared with $2.52 billion in 2010.

Full year 2011 sales increased 41% to $48.08 billion, compared with $34.20 billion in 2010.

North America sales were $9.9 billion, up 37% from fourth quarter 2010. International sales, representing the company’s U.K., German, Japanese, French, Chinese, Italian and Spanish sites, were $7.53 billion, up 31% from fourth quarter 2010.

Worldwide Media sales grew 15% to $6.01 billion. Worldwide Electronics and Other General Merchandise sales grew 48% to $10.91 billion.

Amazon says its Appstore for Android customers nearly tripled in the fourth quarter compared to the third quarter. In addition, customers downloaded more apps from the Amazon Appstore during the fourth quarter than they had during all previous quarters combined. Amazon also said the number of videos purchased or rented from Amazon Instant Video and the number of Amazon Instant Video customers both more than doubled year-over-year in the fourth quarter. In addition, the number of Prime Instant Video streams increased nearly 300% in the fourth quarter compared to the third quarter.

All signs point to the Kindle Fire selling very well. One analyst recently updated Q4 Fire sales to six million units from five million. Amazon said that Kindle device sales as a whole tripled over the holidays.

Amazon has also been rumored to be taking on Netflix with with a more comprehensive video-streaming product.

For people who have been doing just one thing for a long, long time, it’s amazing how many content distributors get things so catastrophically wrong.

These last few weeks brought us quite a few unique situations, including the launch of Apple’s iBook Author software as well as a number of announcements from the studios to withhold streaming rights for Netflix viewers. Cory Doctorow points to a particularly delightful bit of DRM making the rounds in publishing right now, something that will be familiar iTunes users who found their real names embedded in music files a while back.

In a column at Publishers Weekly, he writes:

If there is anything that exemplifies the delusional nature in some publishing boardrooms today, however, it is the phrase “social DRM.” For those unfamiliar with the term, social DRM is another name for an unencrypted e-book that has the purchaser’s name (and often contact information) inserted in it, via some kind of digital watermarking. The idea is that e-book customers will be reluctant to share their e-books around if they know that their name and information will travel with the books, either because they don’t want to be shamed for being patient zero in a widespread epidemic of unauthorized copying, or out of fear of legal reprisals from publishers should a copy with their name on it show up on the Pirate Bay.

The delusion of publishers isn’t in their belief that social DRM will keep people from sharing. The real delusion lies in the use of “social DRM” in connection with the marketing and sale of e-books. Recently, I discovered some publishers actually advertising their use of social DRM.

Social DRM and release speed-bumps are, in the end, as laughable as SOPA/PIPA, CSS, Kindle encryption, and all of the DRMs and “road blocks” that came before them. The only real DRM – digital rights management, in its purest sense – is a reasonably-priced product sold everywhere in the the world quickly, easily, and, in the case of media like books and shows, the ability to be shared. Amazon and B&N clearly know this, and the gaming industry is learning. Music distributors have had this truth foisted upon them and they seem to be accepting it – with some hiccups – quite gamely. However, books and movies are still fighting the endless fight, attempting to make Amazon, Netflix, and other distributors bow to their will just as, once upon a time, book sellers and movie theaters went along with their harebrained schemes just to stay in business.

Piracy is a huge problem, but it’s a problem that’s solved through distribution, not DRM. As Paul Carr notes, “people who illegally copy books on a large scale, for personal profit, should be buried up to their necks in sand until ants eat their lungs from the inside.” End of story and replace books with anything created by a person who loves to make art.

The books/discs and mortar stores worked because in any town anywhere in the world, a kid could walk down to the local Buzzard’s Nest or B. Dalton or Barnes & Noble and plunk down $12.95 for a cassette of Duran Duran. These days, that same kid can get the cassette for nothing. The key, then, is to supplant that model through fair and easy pricing world-wide, ensuring less “effusive” but similar revenue streams. If I can buy a bestseller with one click on the Kindle, I’m far less likely to steal it.

To be clear, this is a 36-year-old’s view of the landscape. There are plenty of folks for whom the prospect of spending $12.95 or $10 or even $0.99 on an album is not feasible. But you don’t sell to those folks. You sell to your customers and hope the rest of the world becomes potential customers.

This is the tipping point for DRM. We are at a stage where our devices are so divorced from the actual plumbing of content distribution that to download an MP3 or MP4 will soon be as alien to coming generations as sliding a punch card through an IBM reader. You could argue that this is already true in that Kindle and iPhone owners can get music and books instantly, without understanding the format, the methodology, or networking. Whispernet, for example, is a perfect book distribution system. It works anywhere, it works with one click, and it is so ridiculously easy that you forget you’re spending money.

As much as free software folks bemoan the loss of the general purpose computer, in a few years our experience in consuming content will be mediated beyond recognition. Distributors and artists can do it the right way – at a fair price that will ensure folks will actually pay for content – or the wrong way by putzing around with release dates, ridiculous pricing differentials in different markets, and consistent dedication to the false church of DRM.

Personal recommendations have always been a part of ecommerce, but there has been little innovation since Amazon introduced retail and product personalization 10 years ago. But with the increasing mountains of data at digital retailers’ fingertips, ecommerce is about to get even more personal.

The fact is that right now there is little iteration from personalized ecommerce beyond what is taking place on Amazon. So you’ll see suggestions of what other shoppers who bought a certain item also purchased, or recommendations to similar items to what you have purchased, but there is a whole world of social data, and even more-in-depth purchase data that can be mined by retailers to help increase sales.

Kleiner Perkins partner Aileen Lee agrees with me, “In the future, the best  retail sites will know you much better and show you things that are much more relevant.” Lee has helped lead investments in a number of e-commerce companies including Offermatic, One Kings Lane, Plum District, Rent the Runway, and Trendyol and held operating roles at The Gap and North Face.

“We are just at the beginning of a revolution of e-commerce, and existing retailers are going to have to get better at personalizing the experience for consumers,” Lee says.

“Personalization was really important in enabling Amazon to differentiate itself and grow in past ten years,” David Selinger, CEO and co-founder of RichRelevance. Selinger also was Amazon’s Manager, Consumer Behavior Research and helped build some of the site’s personalization features a number of years ago. “Personalization will be the differentiating factor in e-commerce and digital commerce going forward, especially for multichannel retailers and new entrants online.”

Amazon and Netflix represent the first wave of personalization. I believe that we are going to enter into the next wave of a more personalized e-commerce experience as retailers and e-commerce sites move towards mining data to improve sales and conversions.

It’s highly likely that you have helped boost Amazon and Netflix’s conversion rates on movies, books, or other products thanks to personalized suggestions of items that you may like based on your previous purchase data, other consumers’ purchase history and more. In fact, it’s so seamlessly baked into the user experience for both companies, that I tend to not even notice how impactful personalization is on what I purchase.

That’s not to say that Amazon is the only retailer experimenting with personalization. eBay has also been personalizing the marketplace experience with recommendations of similarly viewed or bought items for some time, and is looking to expand personalization efforts with PayPal. And with the recent acquisition of Hunch, we know eBay is going to ramp up data mining.

Recently, I started to receive emails from Gilt Groupe that suggested similar earring to like those those I had added to my wait-list on the e-commerce site. The company also sends personalized email notifications on sales that are tailored to each customer. Gilt, who declined to comment for this piece, seems to realize that personalization is going to be a key product driver for the site in the future. And brick and mortar retailers like Saks Fifth Avenue, and many others are also starting to jump on the personalized email bandwagon.

The Challenges

The best way begin understanding the opportunity of personalization in the future is to realize the immense challenge that retailers face when approaching personalization. As DJ Patil, Data Scientist in Residence at Greylock Partners, explains, “When you go to Nordstrom you have a shopping assistant helps direct you, basically says ‘I’m here to help, what do you need and here’s where to find this.’ No online retailer has quite nailed that,” he explains.

For most retailers, the toughest hurdle is to have enough data on an individual to actually help personalize the experience. For the majority of buyers who purchase from a specific site once every few months, or even less frequently, a retailer may have no real sense of direction on how to present similar products.

Getting these data points is the biggest challenge that retailers face. But retailers do have significant data for the small amount of regular, routine customers for an e-commerce site, including clicks, purchase history, shopping cart information, shares and Likes, and more. Retailers face challenges on how to store and organize this data, and then turn this into personal recommendations

And data comes in various forms. There’s implicit data (which is gained from your everyday actions on a retailer’s site) and explicit data (which you offer to sites via surveys or quizzes). While retailers are doing more with the implicit data (i.e. reminding you when you left items in your shopping cart); no one has yet mastered the art of capturing that precious explicit data.

Google’s Boutiques.com tried its hand at this, as a search engine and fashion site which allowed users to receive personalized clothes and accessory recommendations based on preferences and actions. But Google subsequently shut the portal down last September.

Asking for users to fill out surveys of what they love or like perhaps isn’t the ticket to drawing explicit data, such as brands you love, colors, styles and more. As Patil explains, retailers who ask for this information need to present this as more of a conversation as opposed to replicating the feel of a doctor’s appointment where you are filling out your life history via forms.

Getting these signals from consumers is very difficult from a UI and user experience stand point, he says. His advice to retailers is to find a way to replicate how a store owner or shop keeper would engage you in a conversation when walking into a store and looking for something open-ended, such as a birthday gift. One way to do this is to present a personalized item suggestion but ask the consumer (in a Pandora-like fashion) if the recommendation sucks and how they can make the shopper’s life better “People want to help the system and love to correct things,” Patil says.

And similar to Pandora, people become more invested in a platform that knows their preferences and will be more likely to return.

There’s also the issue of finding the balance between providing serendipity in terms of discovery and personalization. Retailers still want their sites to be this Pandora’s box of discovering items, literally, but personalization can cut down on this discovery process. So retailers need to both anticipate what consumers may want to purchase on the site but also provide items that consumers will be able to feel like they ‘discovered’ on the site.

Patil draws an interesting comparison with how grocery stores have been able to structure their layouts to provide serendipity and useful discovery. “When you go to the supermarket, the stores know you are definitely going to milk aisle, so they often put it in the back of the store, so you can find serendipitous stuff on the way. Online retailers need to replicate that on e-commerce sites.” In the end, the goal is to be able to deliver personalization without being predictable.

At a macro level, retailers also face challenges in finding talent to sort this big data. The difference between doing data personalization well are radical shifts financially for retailers, Selinger explains. The engineers who are able to parse these massive amounts of data are hard to come by, and expensive.

Social

Social data (i.e. the Facebook Likes of products, what products people are recommending on Facebook or Twitter) is going to be a big part of personalization for retailers in the future. Already plenty of retailers are using Facebook social plugins and Connect integrations to leverage Facebook data to show visitors what friends bought or shared, what products relate to their Likes, and which friends they might want to invite.

The problem with this data is that much of it is unstructured, and there is really no one who has effectively nailed social personalization in the commerce arena the way Amazon was able to do with data from purchase behavior. Blippy attempted to socialize purchases, but it failed. Amazon also allows you to connect to Facebook to access your friends’ Likes and recommendations but I find this UI to be clunky, and not very useful.

Selinger thinks that mining social data for ecommerce may lose steam before it takes off, drawing the comparison to email. “In 2007, if you were to walk into VC’s office with an idea about ecommerce and email, you would have been sent out the door,” Selinger says. But he explains that while there is an inherent enterprise value in this social data, it will take a long time to take off, similar to the way it took awhile for personalized email and commerce models to enter the market. “When someone figures out how to do it and do it well, it will grow really quickly,” he maintains.

The challenge for retailers is making sense of the Facebook news feed — i.e. streamlining recommendations, attaching brands and tags to this data and then serving this to shoppers in a useful, personalized format. Basically, your social network can become your Consumer Reports.

The challenge for the data mining community, explains Patil, is actually figuring out the intent in much of the unstructured data that is posted about retail products and brands on Facebook. And it’s important to keep in mind that some of this data from Facebook users is private.

This past week, Facebook partnered up with sixty different startups to add their “stories” to Facebook Timeline, through apps that span different verticals from Food, Fashion to Travel. Part of this involved adding new actions (in addition to ‘like’) to Timeline story options. That includes the verbs ‘bought’ and ‘want.’

There is tremendous potential in developers and retailers being able to mine this data from ‘boughts’ and wants’ as opposed to the open-ended ‘like.’ You can see details on what social shopping mall Payvment is doing with the new protocols here, but basically, the ability to add these targeted buttons could be game-changing for social discovery in e-commerce.

Privacy

Echoing Lee’s thoughts, Patil is confident that there will be a new wave of personalization and e-commerce. But without data, there is no personalization. So consumers both on Facebook as well as on retail sites will have to be more willing to give up key data like purchase history, Likes and other social actions, and even location in order to get a more personalized shopping experience on retail sites.

The key will be getting consumers to understand that more data will improve their shopping experience, and making the choice of opting-in a no brainer.

Selinger agrees that privacy is going to be an important issue in the next tranche of personalization innovation. “Now more than ever, consumers are more cognizant of what’s happening with their data,” he says. But what retailers have in the favor is a strong foundation of privacy practices, because these companies have had to protect consumer financial and credit card data for time. Selinger believes that retailers will be very thoughtful about privacy and data sharing going forward.

Perhaps sites like Blippy and Boutiques.com were ahead of their time when it came to consumers willingly handing over the keys to their shopping and payment preferences. I envision a day when there will be an app that reads all of your purchase history via your email account and then serves you recommendations based on this data. There are some companies who are already parsing through receipts in your inbox to organize purchases, so why not take this a step further.

And these personalization strategies that are being adopted by retailers are already trickling down to other kinds of sites beyond e-commerce as well. In the same way that ecommerce sites are trying to maximize sales and profits with this data, content sites are also using social and other data to add relevance to their platforms.

So shoppers, be prepared to give up your data. In the coming year, we’re going to see many more retail sites ramping up data-driven discovery. And e-commerce sites who aren’t thinking about how to mine social and other forms of data are probably going to be left in the dust by the Amazons and Netflix’s of the next wave of personalization.

Wuh oh, Samsung — better watch your tail. While Apple might not be seeing any impact (be it positive or negative) on iPad sales from the launch of the Kindle Fire, Samsung’s Galaxy Tab ought to be feeling the heat.

Tapping into the data provided by their app analytics platform (which they estimate has found its way onto around 90% of the Android devices out there), Flurry highlights a few surprising numbers.

Downloads:

Next up, Flurry looked at the download numbers for 5 applications that were in the Top 10 on both the Android Market and Amazon’s App Store. To boil it all down: for every sale of one of these top apps to a Galaxy Tab owner, there were 2.53 sales to a Kindle Fire owner. Again, consider how much bigger the Galaxy Tab audience is (Flurry estimates that it’s at least double) — and yet, the Kindle Fire owners are buying more.

If you’re an Android developer wondering whether or not you should target the Kindle Fire and Amazon’s App Store, the answer seems to be an incredibly clear “Yes.”

Apple’s iPad reigns supreme from whatever angle you choose to look at the tablet market (profits, apps, quality, market share, mindshare, you name it), but research firm Strategy Analytics this morning said Android did manage to capture a record 39 percent tablet OS market share in the fourth quarter of 2011.

Apple maintains the lead with 58 percent market share in Q4 2011 (down from 68 percent in the fourth quarter of 2010).

Peter King, a research director at Strategy Analytics, says global tablet shipments (the research firm explains that these refer to ‘sell-in’ and not over-the-counter sales—an important difference, those Android tabs could sit on the shelves forever at Best Buy and never be bought) reached an all-time high of 26.8 million units in Q4 2011, surging 150 percent from 10.7 million in Q4 2010. He added:

“Apple shipped a robust 15.4 million iPads worldwide and maintained its strong market leadership with 58 percent share during the fourth quarter of 2011. Apple shrugged off the much-hyped threat from entry-level Android models this quarter.”

They did indeed, even if these aren’t really ‘threatening’ Apple at all. Android climbing to 39 percent share (up from 29 percent in Q4 2010) is, nevertheless, meaningful, but here’s the thing: Strategy Analytics includes Amazon’s Kindle Fire in the list of Android models it tracks the distribution of.

The Kindle Fire runs a heavily customized version of Android, sure, but it’s a different beast from, say, Samsung’s Galaxy Tab or Motorola’s Xoom. I would love to know how much of that 39 percent market share can be attributed to the undeniably strong sales numbers of the Kindle Fire.

Put differently, imagine if Amazon didn’t opt for Android or hadn’t yet released the Fire. Which Android tablet makers would be posing a serious threat to Apple then?

I wouldn’t go as far as to say Android tablets ‘failed’ miserably in 2011, but it’s a far cry from success if you ask me. A lot of people expected Android to be on par with iOS by now.

Worth noting: Strategy Analytics is not including Android-powered ebook readers in its latest report.

Update: you should also definitely read LAPTOP Mag’s Analyst: Kindle Fire, Nook Tablet Have 40% of Android Tablet Sales

I have no doubt Android tablets will actually end up commanding a larger tablet OS market share than Apple’s iOS over time, but that will be a logical result of its distribution model and not “Android winning” (basically, Apple chooses not to focus on market share but on profit margins). That Android model also comes with a real, unquestionable fragmentation problem.

Apple shouldn’t worry about the surge of Android in terms of tablet market share, desktop PC makers and the likes of RIM, Nokia and Microsoft should. Especially with an iPad 3 coming in 2012.

Something that crossed my mind: Strategy Analytics estimates that Microsoft captured a mere 1.5 percent global tablet OS market share in Q4 2011, which is very ironic if you think about how early the software giant started thinking about tablet computers and their potential in the enterprise and getting such devices into consumers’ hands.

Says Strategy Analytics: “The upcoming release of Windows 8 this year cannot come quickly enough for Microsoft, so its hardware partners can start competing more effectively in the tablet space”.

No shit.

While we’re on the subject of publishing, Sarah Lacy found a great monologue on the current state of publishing and how, in short, Amazon is tearing old publishing houses a new one.

Publishers, like music producers, don’t make money piddling around with 50 mid-list books. They make money buying (for millions) and selling (a few) books by human black holes like Snooki and the Kardashians. They make money selling Stephen King novels and Newt Gingrich screeds. They make money, to mix industries, by betting on big budget dramas and reality TV. Sometimes a gem sneaks through, but it’s rare.

Amazon is trying to change that. First, the money shot from Lacy’s source:

Amazon’s publishing arm is surprisingly strong. They have a number of benefits including inexpensive print-on-demand as well as a massive Kindle install base. What do traditional publishers have? Well, Amazon. You don’t have to be Ahab to see that little houses will be sunk by the Amazon juggernaut and larger houses are reeling on deck if not taking on water. Publishers snicker that Amazon is a vanity house but, to be honest, isn’t everything a vanity house?

Look: editors do less and less and authors are expected to build platforms, market, and sell their own wares. If that’s not a vanity press, I don’t know what is. The expectation is that the package lands at the printer and goes out. The trucks roll, the author hams it up with Jon Stewart (or gets no publicity at all) and then the book drops onto the remainder table. Rinse. Repeat.

News, music, and video have been disrupted by smaller companies with less cash on hand. Do publishers even think they have a chance against Bezos?

Amazon is releasing new data on its Kindle Lending Library, which the e-commerce site says now has over 75,000 books. The Kindle Owners’ Lending Library is a collection of books that Amazon Prime members who own a kindle can borrow once a month, with no due dates.

Amazon recently launched KDP Select, a fund that lets indie authors and publishers make money off of lending. Basically, if a KDP author or publisher chooses to make any of their books exclusive to the Kindle Store for at least 90 days, those books are eligible to be included in the Kindle Owners’ Lending Library and can earn a share of the KDP Select fund.

According to the company, customers borrowed nearly 300,000 (295,000 to be exact) KDP Select titles in December alone, and KDP Select has helped grow the total library selection. With the $500,000 December fund, KDP authors have earned $1.70 per borrow. In response to strong customer adoption of the Kindle Owners’ Lending Library, Amazon says it has added a $200,000 bonus to the January KDP Select fund, raising the total pool from $500,000 to $700,000 for authors.

The top ten KDP Select authors earned over $70,000 in the month of December from their participation in the Kindle Owners’ Lending Library, which is a 30% increase on top of the royalties they earned from their paid sales on the same titles in the same period. In total (paid sales plus their share of the loan fund), these authors saw their royalties grow an astonishing 449% month-over-month from November to December. The list of top 10 KDP Select authors includes Carolyn McCray, Rachel Yu, the Grabarchuk family and Amber Scott.

As of November, the Kindle Lending Library had around 5,000 books, so clearly Amazon has seen a big jump from providing the incentive. With the release of this news, Amazon is touting the fact that independent publishers can make extra money by participating and the company is trying to convince more authors to sign on to the KDP Select program, thus increasing the number of books available for lending.

Customer experience analytics company ForeSee recently released data on which e-commerce companies had the most customer satisfaction in 2011. Amazon and Amazon proved to be among the winners, with Netflix falling last year in terms of sentiment. Foresee has done a similar study on satisfaction for retailer mobile commerce sites, and it looks like once again Apple and Amazon are head and shoulders above the competition in terms of customer satisfaction for mobile commerce, via both apps and the mobile web.

As we’ve noticed over the past year, mobile commerce has taken off and continues to grow exponentially as more and more consumers use their smartphones for research, shopping decisions and purchases. Because of this trend, ForeSee compiled data from consumers to produce statistically reliable mobile satisfaction scores for 16 of the largest e-retailers in the United States. Apple and Amazon, which scored 85 and 84, respectively, on the study’s 100-point scale, topped the list by a wide margin.

According to the research, shoppers are generally more satisfied with traditional websites than they are with their mobile counterparts. The average mobile satisfaction score for the 16 retailers measured in the report is 76, compared to 79 for the same companies’ websites.

However, a few companies had comparable performance on mobile and web: Apple (a standout with a mobile score two points higher than its web score), Toys “R” Us, Best Buy, Staples, Netflix, Dell, and Blockbuster. Others reveal large gaps between the website and the mobilee xperience, including Avon (satisfaction 8 points lower on mobile) and Walmart (7 points lower).

Mobile shoppers most likely to make a purchase from another channel (the traditional website, a store, or a call center) are those who shopped on Amazon (87) and Apple (81), followed closely by Best Buy and Avon (both 79), Staples, Barnes and Noble, Victoria’s Secret, and Target (all 78).

Another observation that ForeSee noted in the study is that mobile shoppers who are highly satisfied with their mobile experience are 54% more likely to consider the company next time they want to make a similar purchase, and twice as likely to buy from the retailer’s mobile channel again.

A third of online shoppers (34%) used their mobile phones to research products while 15% made a purchase directly from their phone, up from 11% last year. And one in five online shoppers (19%) used a mobile phone to compare prices or products while shopping in a retail location. The study also showed that 19% of all online shoppers are now using mobile phones to compare prices while shopping inside a store.

While in physical stores, more than one-third of online shoppers (36%) used their phones to visit the store’s own website or app, but nearly one-quarter (24%) also used their phones to access a competitor’s website or mobile site.

Basically, now more than ever, it is critical for retailers to build out their mobile sites. And online retailers, like Amazon, are definitely catching on to this, and developing innovations in the m-commerce space. Retailers, especially brick and mortar stores, that ride the mobile wave are going to miss out on a huge opportunity, and customer satisfaction (and sales) will undoubtedly suffer.

Netflix has made its debut in the UK and Ireland in early 2012, just like they promised, having worked out video content licensing deals with the likes of BBC Worldwide and MGM.

Users in the UK and Ireland can now subscribe to Netflix to watch available content on their connected TVs, computers, tablets, game consoles and mobile devices. In the UK, Netflix will be bumping heads with Amazon-owned LOVEFiLM, the well-established movie and TV series streaming service. Read more at TechCrunch Europe.

The rights to Casa.com (Spanish for ‘house’) have been transferred to Amazon, indicating the ecommerce giant’s next dedicated vertical shop may be a home decor site. Amazon’s Quidsi network of sites already runs diapers.com for baby goods, wag.com for pets, beautybar.com for — well, you get it. If you visit Casa.com now you’ll find more evidence, with a blank screen explaining “You have reached an invalid location. Maybe you are looking for http://www.diapers.com, http://www.soap.com…” Casa.com could offer a more affordable, traditional home decor shopping alternative to luxury and flash sales sites like One Kings Lane and Gilt’s Decorati.

Domain Name Wire first reported on the domain switch, noting that casa.com was protected by whois privacy for years prior to the transfer. Also, I found that Quidsi employee Morgan C. lists herself on LinkedIn as a “Merchandising Associate at Quidsi Inc., Casa.com”, and Domain Name Wire spotted another Quidsi employee with the same title. You won’t find that logo above anywhere else though, it’s just a mockup I concocted.

Amazon bought Diapers.com parent Quidsi for $545 million in November 2010. When Quidsi launched Yoyo.com for toys in September 2011, it’s CEO Marc Lore told TechCrunch that the company’s next vertical site was going to continue its focus its core demographic of moms. Casa.com fits that bill perfectly.

The new one-stop shop could include standard Quidsi features such as a combined shopping cart with other Quidsi sites, free 2-day shipping for purchases over $50, seasonal product selections, and featured picks by the site’s team. Considering One Kings Lane was expected to do $100 million in 2011 sales, the home decor market could be a huge opportunity for Amazon.

[Image Credit: Shutterstock]

In November, Mobile ad network Millennial Media reported that Amazon’s new tablet devices Kindle Fire, was seeing ad impressions grow at an average daily rate of 19% since its launch to the public in the middle of the month. Millennial says it’s not just seeing millions of impressions and the device is on a monthly run rate of hundreds of millions of impressions. But that data was gathered from a few weeks of usage from consumers in November, and as Amazon reported yesterday, December’s holiday season brought record sales for the Kindle Fire, with over 4 million Kindle devices sold in December. The Kindle Fire was the most gifted and wished for product on Amazon this season.

Today, Millennial is releasing data from its ad network showing impressive growth numbers from the Kindle Fire over the holiday weekend. In November, impressions on the Kindle Fire grew an average rate of 19 percent every day. Over this past weekend, Millennial says that as consumers opened and used their new Kindle Fires, ad impressions increased even more. As millions of consumers unwrapped new Kindle Fires, Millennial saw an average daily growth rate of 113 percent.

On December 24, impressions grew 32 percent; and on Christmas day in particular, impressions on the Kindle Fire grew 261 percent. The day after Christmas saw a 46 percent jump in ad impressions.

Of course, the Kindle Fire wasn’t the only tablet that saw a spike from the holidays. From December 23 to 26, the iPad had a daily growth rate of 6 percent. The iPad remained the leading tablet overall on Millennial’s platform during this time period, although the massive gain from the Kindle Fire helped to significantly close the gap.

The Kindle Fire’s impression growth on the platform has slightly outpaced that of the iPad when the iPad launched in early 2010. Millennial says that though the Kindle Fire has been introduced into a more mature tablet market than the market which greeted the original iPad, Amazon’s entertainment-focused platform and the lower price point have helped drive this early use by consumers.

Now that the holiday gifting season if over, it should be interesting to see if consumer usage of the Kindle Fire continues to grow at such a rapid pace. For example, the release of a new version of the iPad could effect Kindle Fire growth in 2012.

M-Edge, a small Maryland-based company responsible for many popular Kindle cases, last week filed suit against Amazon. According to the Wall Street Journal, M-Edge claims that Amazon has repeatedly tried to change the terms of a contract put into place all the way back in 2009, and has bullied the accessory maker each time it fights back.

In the original contract, Amazon was to receive a 15 percent commission on all sales that go through Amazon’s Kindle store front. Apparently this wasn’t enough for Amazon, who later requested an increase in commission to 32 percent and threatened to remove M-Edge cases from the store if the Maryland-based company didn’t concede.

After finally reaching new terms, M-Edge alleges that Amazon then asked for the difference in commission on cases sold before the increase. Each time M-Edge fought back, Amazon threatened removal from the store and even went so far as to say that M-Edge would no longer get early access to Kindle designs, according to the filing.

“This case presents a classic example of unlawful corporate bullying,” reads the suit. “M-Edge developed a very successful product line: personal electronic device jackets with multiple features for the Kindle and other e-readers. Amazon thereafter repeatedly sought to hijack the product through threats, deceit, interference with M-Edge’s customer relationships, and patent infringement.”

Ah, patent infringement. I sure haven’t gotten my fill of those beautiful words.

M-Edge also alleges that Amazon is currently infringing on a patent it holds describing a book light-equipped ereader cover. Amazon currently sells the Amazon Lighted Leather cover (pictured, right), which M-Edge cites within the suit. The accessory maker is looking for a permanent injunction as well as damages.

You wanted an Android tablet for Christmas… and you got one! Alas, it’s a Kindle Fire. Whoops! While the Fire is technically well within the realm of “Android tablet” (and a mighty fine tablet, for the price), it’s not quite the tried-and-true vanilla Android experience you were looking for.

Wait! Don’t go requesting that return label just yet: if a gang of goodhearted hackers have their way, Amazon’s wonderfully wallet-friendly tablet will be running the latest builds of straight-up Android (as in Ice Cream Sandwich) before too long. In fact, they’ve (sort of) already got it working.

Check out the video below, as shot by the fine folks at Lilliputing:

The guys behind this hack (the XDA dev thread can be found here) call it “pre-alpha”, and for good reason. While it technically works, it’s probably not something you want to dabble with just yet. It’s got all sorts of nasty bugs, with the biggest drawbacks being that audio/video playback are pretty much 100% broken.

With that said, few communities can hobble together rock-solid hacks as fast as the Android crowd can. Now that the concept is proven, expect this one to come together quick.

As online retail sales continue to soar, brick and mortar stores are seeing margins dissipate. Online holiday sales are expected to grow 15 percent to $37.6 billion this season while retail sales in physical stores are only expected to increase by 3.8 percent to $469.1 billion. Best Buy recently reported a 29 percent drop in profits because of discounts and sales of top grossing electronics. The fact is that the electronics retailer was probably forced into offering deeply discounted deals in order to compete with e-commerce giant Amazon. And it doesn’t help that Amazon is now offering discounts to consumers on any product purchased via its price comparison mobile app, another huge blow to physical retailers.

Brick and mortar retailers need to figure out a way to compete with Amazon and other e-commerce giants that doesn’t eat into margins. Deals and coupons simply aren’t enought. And as former Apple retail chief Ron Johnson has said, retail isn’t broken, stores are. So how are retail stores going to survive? While mobile may be the technology e-commerce companies are using to jab physical stores, it is also the technology that may save these stores. Personalization and data are the two key factors that could save retail stores; and the vehicle by which these technologies can be utilized is via the mobile phone.

Why Mobile?

2011 has been pegged as the year of mobile shopping by both technology companies and retailers. Now more than ever consumers are carrying around phones that enable them to access apps, discounts, price comparison information, payments mechanisms and more. comScore recently reported that two-thirds of all smartphone owners performed some sort of shopping activity on their phones, including comparing products and prices, searching for coupons, taking product pictures or locating a retail store.

In fact, slightly more than one in three purchasers used their smartphone to make a purchase while in a store. When they enter retail stores, these consumers are carrying their mobile phones and using these devices.

E-commerce companies have been quick to capitalize on this trend while brick and mortar retailers have not caught on in quite the same way. As mentioned above, Amazon is incentivizing customers to use its PriceCheck mobile app. Customers can walk into a brick-and-mortar retailer, use the app to scan the barcodes of a desired product, and access Amazon’s prices for that product. More often than not, Amazon’s prices are lower, and if a customer places the item into the app’s virtual basket, a 5% discount will be applied to the product within 24 hours. Price Check app users can use the discount on up to three products.

Simply offering coupons aren’t going to be able to combat Amazon’s tactics, because not only are these deals going to eat into retailer margins but these incentives can’t necessarily bring shopper back to a store repeatedly.

Brick and mortar stores need to figure out not only how to drive traffic, but also how to increase the purchase amount and conversion rates, create loyalty and return customers and more.

Cyriac Roeding, founder of location-based mobile shopping app Shopkick believes that the mobile phone is key to the future of commerce for stores. In case you aren’t familiar, Shopkick automatically recognizes when someone with the free Android or iPhone app on their phone walks into a participating store. Once a Shopkick Signal is detected, the app delivers reward points called “kickbucks” to the user for walking into a retail store, trying on clothes, scanning a barcode and other actions. These rewards can be used towards purchases.

Rodeing says that the role of the physical store will change in the future. What online stores cannot offer (which brick and mortar outlets need to realize) is the one-on-one personalization and personal treatment that a physical store with employees can. And in-store shopping brings immediate gratification because a customer can take home the item with them as soon as the purchase is complete.

And mobile is how you bring personalization back to the in-store purchase experience. The challenge, he explains, is to make this experience worth the consumer’s time and money.

eBay is also trying to help physical retailers drive traffic into stores via its Red Laser barcode scanning apps, which now integrate in-store listings, prices and availability from Milo. As eBay’s Jack Abraham (who founded Milo) says, brick and mortar retailers need to be where their customers are, and that decision-making is now happening on phones.

“There are clearly companies that are positioning themselves as destroying brick and mortar retailers but we’re positioning ourselves to be an ally for the retailers,” he says. eBay recently launched a new campaign, where consumers who spend $100 at Toys “R” Us, Dick’s Sporting Goods and Aeropostale using PayPal, will get a $10 voucher to spend in store.

How To Personalize The Experience: Data!

How brick and mortar stores are going to be able to personalize and make the in-store shopping experience unique is through data, in my opinion. It’s no longer about creating a mobile web site or offering coupons; the experience centralizes around making customers feel as if they are being treated like a VIP just by walking into a store. And how brick and mortar stores are going to do that is the same way Amazon was able to create a business out of personalized e-commerce.

Some retailers are attempting to use video and heatmaps to try to see how people shop, what they are buying and more. But this data is limiting because while stores can figure out what is working when it comes to placement, advertising, and marketing of products in-store, retailers still don’t know who is buying and how to get them to return.

Personalization really gets interesting with transaction data. Shopkick recently teamed up with Visa to allow consumers a way to receive rewards points for retailers at the point of sale when they use their Visa credit cards. This is part of closing the redemption loop. The redemption loop starts when a consumer sees an ad or an offer for a merchant, and is completed when the consumer makes a purchase and that purchase can be tracked back to the offer. Thus far startups, tech companies and credit card companies have started to use transaction data as a way to close the redemption loop and drive future purchases but this is relatively new to brick and mortar retailers.

With the Shopkick deal, brick and mortar retailers could see what items a consumer purchased and deliver discounts, and special offers based on purchase behavior. And this can be delivered via the mobile phone.

Of course, this would all have to be an opt-in experience for shoppers considering the privacy implications. But many consumers use the personalized experience of Amazon when buying books, electronics and others items, so why not replicate this in the physical world?

This means more partnerships with credit card companies like Visa, MasterCard and American Express. Online payments giant PayPal also sees this as a huge opportunity for physical stores. PayPal announced an in-store payments technology both via mobile and point of sale systems that is currently being tested on a ‘friends and family’ basis in a national retailer in two markets.

The opt-in offering will include location-based offers, making payments accessible from any device and offering more payments flexibility to customers after they’ve checked out. Users will have the ability to access realtime store inventory, receive in-store offers, and real-time location-based advertising from stores. While exact details are still unclear, it sounds like PayPal will use location and transaction data to help in-store retailers improve the experience for consumers.

PayPal is partnering with a at least 20 known top-tier retailers, which will be unveiled in 2012. We hear about the initial retailer as soon as this year.

PayPal’s Anuj Nayar tells me candidly that retailers are desperate for this offering. “The fact is that most retailers have no idea about customers until they are leaving the store and that comes down to data.” He says PayPal is working with in-store retailers to create a suite of tools and technologies that help use technologies to level the playing field when it comes to data.

One thing that is clear is that retailers need to jump on the mobile, personalization and data bandwagon very soon. Online retailers are only getting more aggressive (i.e. Amazon), and it’s only a matter of time before online retailers start to ramp up their existing personalization offers even more.

Roeding says that physical retailers who doesn’t focus on mobile in the next six months are going to face a major problem in the next year. But it goes beyond just created a dedicated site and mobile app. Brick and mortar retailers need to find a way to be in as many mobile applications as possible, such as ShopKick, PayPal, and eBay, where potential customers are deciding what to buy and where.

Abraham echoes these thoughts, explaining that retailers need to be part of search results, especially in mobile search results. “If they don’t, they risk getting lost in the age of the post-pc era,” he says. eBay is building out its own predictive data capabilities with the recent acquisition of Hunch, and we can expect more data-focused features to be rolled out soon.

As for which brick and mortar retailer is going to be the first catch on the mobile and data wave when it comes to in-store shopping, my bets are on Wal-mart. The retailer has been particularly aggressive on the technology front, buying social and mobile ad targeting company OneRiot, and social media startup Kosmix. Wal-mart is already experimenting with a number of in-store mobile services, including things like NFC, barcode scanning and in-store geo-fencing.

There’s no doubt that 2012 could be a pivotal year for brick and mortar stores. But they need to act fast and start providing a unique experience for customers or risk being left in the dust by Amazon.

Amazon is making it easier for its users to discover recommended content today with the launch of a new ‘best of’ digital store, where consumers can find recommendations from Amazon’s team of editors on the year’s best of movies & TV shows, music, video games, software, mobile apps, magazines and Kindle books and more. Basically, Amazon will recommend the best of any type of digital content that the company sells.

Of course, the timing of the launch is meant to coincide with holiday shopping season, which has historically brought record sales of digital content for Amazon. Last year, from Christmas Eve through December 30, Amazon customers purchased over three times more digital content, including Kindle books, magazines, movies, TV shows, music, and digital games as compared to the weekly average for the year.

Amazon says that in terms of specific days, the company sees the largest jump in digital product sales on Christmas and during the week following the holiday.

Amazon has published lists of its Best Sellers for Kindle books and other categories, but this appears to be a more curated, editorialized list of content from Amazon experts.

A centralized place for Amazon’s top recommendations for more than just books and movies makes sense considering the growing number of consumers who are looking to the e-commerce giant for software, apps, TV shows and more. And the destination could be a centralized place to find a variety of digital content for Amazon’s new tablet device, the Kindle Fire.

Here’s a preview of some of the recommendations Amazon is making for books, magazines, TV shows, movies, Android app, Android games, and software:

Top ten recommended Kindle books:
1. “Steve Jobs” by Walter Issacson
2. “11/22/63” by Stephen King
3. “The Art of Fielding” by Chad Harbach
4. “Daughter of Smoke and Bone” by Laini Taylor
5. “The Circus Ship” by Chris Van Dusen
6. “Brown Bear, Brown Bear, What Do You See?” by Bill Martin Jr. and Eric Carle
7. “A History of the World in 100 Objects” by Neil MacGregor
8. “The Litigators” by John Grisham
9. “Then Again” by Diane Keaton
10. “Watchmen” by Alan Moore and Dave Gibbons

Top ten recommended magazines:
1. Us Weekly
2. Cosmopolitan
3. Vanity Fair
4. National Geographic
5. O, the Oprah Magazine
6. WIRED
7. Glamour
8. Better Homes & Gardens
9. Reader’s Digest
10. Men’s Health

Top ten recommended movies:
1. The Social Network
2. Harry Potter and the Deathly Hallows: Part 2
3. Bridesmaids
4. One Flew Over The Cuckoo’s Nest
5. X-Men: First Class
6. Fear and Loathing in Las Vegas
7. Crazy Stupid Love
8. You’ve Got Mail
9. Cars 2
10. The Fighter

Top ten recommended TV shows:
1. Walking Dead
2. Arrested Development
3. Lost
4. Breaking Bad
5. Sons of Anarchy
6. The X Files
7. Sesame Street
8. Glee
9. Parks and Rec
10. Friday Night Dinner

Top ten recommended albums:
1. Florence + the Machine, Ceremonials
2. Mumford & Sons, Sigh No More
3. Pink Floyd, Dark Side of the Moon: Experience Version
4. Adele, 21
5. Bon Iver, Bon Iver
6. Coldplay, Mylo Xyloto
7. Foster the People, Torches
8. Fleet Foxes, Helplessness Blues
9. Wilco, The Whole Love
10. The Civil Wars, Barton Hollow

Top ten recommended Android apps:
1. ESPN Score Center
2. LinkedIn
3. Quickoffice Pro
4. The Weather Channel for Android
5. EasyTether
6. Exchange by Touchdown
7. Pandora
8. Urbanspoon
9. MapQuest
10. Zillow Real Estate

Top ten recommended Android games:
1. Angry Birds
2. Words with Friends
3. Bejeweled 2
4. Atari’s Greatest Hits (Missile Command Free)
5. Asphalt 6: Adrenaline
6. Plants vs. Zombies
7. Top Girl
8. Fruit Ninja
9. Cut the Rope
10. Little Piano

Top ten recommended digital video games:
1. Battlefield 3
2. Call of Duty: Modern Warfare 3
3. Deus Ex: Human Revolution
4. Dead Island
5. Saints Row: The Third
6. Dungeon Defenders
7. Magicka
8. Disney Universe
9. Sonic Generations
10. The Sims 3

Top ten recommendations for digital software:
1. Microsoft Office Home & Student 2010
2. Office Mac Home and Student 2011 (Family Pack)
3. TurboTax Deluxe Federal + E-file + State 2011
4. Norton 360 Version 5.0
5. Microsoft Windows 7 Anytime Upgrade (Home Premium to Professional)
6. Quicken Deluxe 2012
7. Adobe Photoshop Elements 10 for Windows
8. Rosetta Stone Spanish (Latin America) Level 1-5 Set for Mac
9. PaintShop Pro X4
10. Anime Studio Debut 8

Online retail giant Amazon this morning announced that it will open four new distribution centers, two in Virginia and two in Tennessee, and that it will invest a total of $270 million to get the new facilities completed by next fall – just in time for next year’s holiday season.

In Virginia, Amazon says it will create about 1,350 jobs, while the new distribution centers in Tennessee will create 1,300 jobs. Amazon operates such facilities, which it calls fulfillment centers, to warehouse and ship items customers have ordered on Amazon.com.

The new sites will be able to fullfil orders across the United States, the company said.

Virginia

Together with the Governor of Virginia, Bob McDonnell, Amazon announced that it will invest $85 million in Chesterfield County, and invest another $50 million in Dinwiddie County.

Governor McDonnell approved a total of $3.5 million in grants from the ‘Governor’s Opportunity Fund’ to assist Chesterfield County and Dinwiddie County with the project.

Tennessee

In conjunction with the Governor of Tennessee, Bill Haslam, the company announced that it will invest $135 million in two new fulfillment centers to complement exisiting facilities in Wilson, Hamilton and Bradley Counties.

In total, Amazon says, the company will be creating more than 3,300 jobs and more than $270 million in investment in Tennessee.