In the midst of Amazon’s recent moves to rapidly grow its content collection on Amazon Prime Instant Video, the company has also been brokering deals for another one of its video properties: European Netflix competitor LOVEFiLM. Today, the company is announcing a new multi-year deal with NBCUniversal International Television Distribution, which will offer LOVEFiLM members access to streaming titles from Universal Pictures during the second pay window.

The titles will be available through the LOVEFiLM Instant service, and will start at  £4.99 a month. As with Netflix, the streaming video service supports a wide variety of devices, including PCs, Macs, the iPad, internet-connected TVs and Blu-ray players, as well as game consoles like the Xbox 360 and Sony PlayStation. There are 175 devices, in total, which are supported.

The new NBCUniversal deal will bring familiar U.S. titles to LOVEFiLM’s members, like ‘It’s Complicated’, ‘Nanny McPhee Returns’, ‘Leap Year’, ‘Green Zone’, ‘The Wolfman’, ‘Robin Hood’, ‘Scott Pilgrim vs The World’, ‘The American’, ‘Paul’, ‘Fast And Furious 5’, ‘Bridesmaids’, ‘Johnny English Reborn’, ‘Snow White and the Huntsman’, ‘Bourne Legacy’, ‘Dr Seuss’ The Lorax’ and ‘Safe House’. However, Amazon did not announce the number of new titles the content deal offered. (Perhaps implying its not large enough to boast about?)

LOVEFiLM, which Amazon purchased back in January 2011, after having held a large minority stake in the company for some time, has also been trying to wean itself off of DVD rentals like its stateside competitor. The company now has over 2 million members in the U.K., Germany, Sweden, Denmark, and Norway, and hosts over 70,000 titles, DVD, games and streaming combined.

Amazon has previously signed streaming video deals for its Prime Instant Video service with Paramount, Discovery, Viacom, 20th Century FOX and others.

Amazon just announced that its Instant Video service is now available on Microsoft’s Xbox 360. With the Amazon Instant Video app for Xbox Live Gold subscribers, Xbox users can now access the roughly 120,000 movies and TV episodes available for renting and purchasing on Amazon’s streaming video service. The app also offers access to the more limited Prime Instant video selection, Amazon’s video service for its $79/year Prime members.

The Instant Video app also supports Amazon’s Whispersync syncing service. This allows Amazon’s users to start watching videos on their TVs and then finish watching them on their Kindle Fires, for example. The app obviously also gives users access to their previously bought videos, as well as their watchlists.

Kinect owners will be happy to hear that they can use both voice commands and gestures to control the app.

Over 32 million U.S. households now access online video on their TVs. Video game consoles, as a recent Forrester study pointed out, are currently the most popular way to stream Internet video to TVs and Amazon has been relatively slow in capitalizing on this trend.

With this release, Amazon Instant is now available on virtually all of the popular set-top boxes and consoles (with the exception of the Wii). Just last month, Amazon launched its PS3 app and today’s release for the Xbox now brings Instant Video to the most popular console for video streaming in the U.S.

Amazon is continuing to grow its collection of streaming video titles at Amazon Prime Instant Video, and is today announcing another new agreement with Paramount Pictures bringing “hundreds” of new movies to the service. This deal isn’t as large as March’s partnership with Discovery, which saw some 3,000 new titles added, but it does introduce what are arguably more big-name movies. Included in the deal are titles like Mission: Impossible 3, Braveheart, Forrest Gump, Mean Girls, Nacho Libre and Clueless, to name a few, and Amazon says more will be added “soon.”

With the new deal in place, Amazon Instant Video now offers over 17,000 movies and TV episodes for unlimited streaming by Amazon Prime customers who can watch online or on their Amazon Kindle Fire. For what it’s worth, “17,000+” is the same number that Amazon was touting earlier this year, so the increase via the Paramount deal didn’t include enough of a selection to warrant a new “milestone” announcement on the company’s part.

Prior to the Discovery deal, Amazon signed a similar deal with Viacom in February, which then brought the number of titles up to 15,000. And in December, the count was 13,000. So yes, the service is growing, and relatively quickly.

Other popular movies you’ll know from Paramount which are now online include Star Trek, Breakfast at Tiffany’s, Top Gun, The Italian Job, and The Truman Show.

In total, the service offers 120,000 titles which Amazon Prime customers can either rent or buy. The videos will be available at no extra charge to Amazon Prime customers who pay the $79/year for the service, which also includes free two-day shipping and access to the Kindle Lending Library.

Unless an app you have your eye happens to have a free demo version to muck about with, there’s little one can do to try out an Android app on a device in advance. Sure, you could buy the app straight from the Google Play Store and get a refund within 15 minutes if you’re not satisfied, but Amazon has a new solution in place that helps take the friction out of that testing process.

The latest update for the Amazon Appstore Android app packs a welcome surprise — instead of being stuck Test Driving your apps on your PC, you’ll now be able to do it from directly within the app.

Well, some of you will be able to do it. Not every Android phone will be able to take part in the Test Drive program quite yet, as Amazon points out that the service is only set up to work with certain devices for now. My Galaxy Nexus doesn’t seem to be on the list at the moment, and Engadget reports that the immensely popular Galaxy S II is similarly shut out of the fun.

Still, it seems to be quite a treat for the devices that do work (Amazon doesn’t have a list of supported hardware just yet). Once you’ve got the updated app in place, you’ll see a nice big Test Drive button under the images on an app’s landing page.

The new feature leans heavily on Amazon’s massive EC2 backend — once the Test Drive button is pressed, an instance of the app starts running on EC2 server, with inputs being sent to the server and video/audio being sent back to the device. It’ll be interesting to see how well the feature actually works, but methinks I’ll have to dig through my box of Android gadgets for a bit before I find something that plays actually plays nice with it.

A color Kindle might be on the way. Industry watchdog publication, Digitimes, says Amazon will launch one in the second half of this year. The report goes on to state that the new models will forgo the traditional infrared touchpanels used in the current model for multitouch capacitive panels. Digitimes expects Amazon to adapt E Ink’s upcoming color EPD panels in their ereaders so don’t expect LCD displays.

This move, if true, would put the Kindle in a strange spot between a full-scale tablet and a tradition b/w ereader. Amazon has so far been very successful in marketing the Kindle’s grayscale screen against full color tablets like the iPad. The Kindle Fire showed that there is a demand for color ereaders as well, though. A color eink display might be the start of a larger content push from Amazon.

Magazines are a hard sell on grayscale ereaders right now. The publications lose all the flash they work so hard to curate. Amazon knows this. However, at $200, the Kindle Fire is still out of reach for a lot of consumers and Amazon’s primary goal with its Kindle line is selling content, not hardware. A color eink Kindle would likely allow Amazon to make a big push into digital zines and perhaps even textbooks.

Color eink screens have been floating around industry tradeshows for several years now. But they have so far been unable to make it to the market. If this report pans out, which seems likely, Amazon might release the first color eink ereader — if not, the company always has the glowing Kindle that we know is on tap.

There are still some big question marks over what Nokia plans to do in tablets — a market where it is now possibly the only major smartphone maker yet to make a device — but at least Nokia is moving ahead with the launch of tablet-friendly services. Today, it said it would begin the global roll-out of Nokia Reading, a Windows Phone app originally announced back in February for reading e-books on a Lumia device.

The company says that initial countries that will get the app are France, Germany, Italy, Russia, Spain and the UK, with others following later this year. It is compatible with all four Lumia models: the 900, 800, 710 and 610.

Having a decent reading app on a smartphone is basically table stakes at the moment, so in that sense this app probably should have come as standard with the phones when they first started to get rolled out last year.

Nokia is perhaps hoping that its international approach will make up for launching it only now: the app will launch with a selection of titles in local languages (French, Germany, Italian, Russian, Spanish in addition to English). This is in contrast to, say, Amazon, which has taken its time in rolling out versions of the Kindle and its Kindle bookstore in languages outside of English. Indeed, as Nokia points out in a blog post on Reading, “While eBooks are becoming a common sight in countries like the US and the UK, they are still in their infancy – or basically unavailable – in many parts of the world.”

Nokia doesn’t give specific numbers for how many books it will offer in its local-language catalogues, except to note that there will be “thousands” of international classics available for free (as they are on Amazon’s Kindle store), as well as a “wide range” of local titles available in addition to translations of best-selling English-language titles. These will be include The Girl With The Dragon Tattoo; One Day; and The Adventures Of Sherlock Holmes, and the list is growing, Nokia says.

Reading is being powered by OverDrive, also Amazon’s Kindle Library Lending partner. We were originally tipped this information, and now Nokia has confirmed it: “Overdrive are the main global aggregator, then we work with other local aggregators and deliver the service over our own backend,” a Nokia spokesperson told TechCrunch.

The app is also featuring some discoverability elements. Similar to how Nokia steers people to certain apps through its “Collection” widget, in Reading the company is also pointing people to Top eBooks and New Releases, which will be categorized by genres. There is also a predictive search function in the app. And to try to make the process of reading on a smartphone a little less onerous, Nokia has also worked in features like text re-sizing and using fonts that are especially small-screen friendly.

Nokia says that other enhancements like audiobook functionality and a News Stream reading service to aggregate new feeds a la Flipboard are “already in the pipeline” and will appear as free updates.

“We have built a reading service that focuses on how people read on their mobiles,” Nokia’s product manager for the Reading app, Rhidian Williams, wrote in the post. “It’s a service that recognises that people read different kinds of content at different times of the day, and it brings this content together in a reading hub that will encourage readers to come back to it frequently.”

The big question is how and if the Barnes & Noble JV with Microsoft — which sees, among other things, Microsoft paying B&N a fee to develop e-books content specifically for Windows 8 and Microsoft taking an equity stake in B&N’s Nook tablet business — will also have an impact on what Nokia does in e-reading devices and e-books content.

So far that kind of detail has not been made public, and Nokia has declined to comment on how that relationship between Microsoft and B&N will impact its own business.

Potter fans will now be able to download all seven Harry Potter books from Amazon’s Kindle Lending Library, a service offered free for Amazon Prime users.

From the PR:

The books will arrive in the library on June 19 and you will be able to download and read one book per month.

The move obviously bolsters the Kindle’s value as a “kids ebook” solution and allows the Potter books to gain a bit of a second wind thanks to renewed interest. You can probably also expect to see lots and lots of paper Potter books at garage sales across the country this summer, a disheartening prospect.

If you were planning to swing by your local Target to buy a Kindle some time soon, you may want to add a little pep to your step. An inside source told The Verge that Amazon’s line of Kindle e-readers and tablets would soon disappear from Target’s store shelves, due to an unspecified “conflict of interest.”

Sales of Amazon’s hardware hasn’t dried up just yet though — that same source sent along an internal memo that points to May 13 (i.e. Mothers Day) as the point after which store stock would no longer be replenished.

Though there’s no official word on why the split is taking place, the rationale behind it must be a doozy. After all, Target was tapped as the first brick-and-mortar retailer to offer Amazon’s e-readers and has been slinging Kindles for just over two years now (even ahead of more gadget-friendly stores like Best Buy). Before that, Target also spent a long time leaning on Amazon to power their e-commerce offerings — from 2001 to 2011, to be more specific.

It’s also worth noting that Target referred to the Kindle Fire as their best selling tablet during Black Friday 2011, a factoid that Amazon placed front and center in their exultory press release. So what gives?

As it turns out, Apple may have a hand in this situation — The Verge notes that Apple recently inked a deal with the red-tinted retailer to launch 25 mini-stores within existing Target locations. Somehow, that doesn’t strike me as being the deciding factor, especially considering that Apple and Amazon (not to mention Kobo and Barnes and Noble) products have managed to co-exist just fine on Target’s shelves for years. Still, the possibility exists that Amazon bristled at the notion of Apple products getting more visibility than theirs despite Amazon’s considerable history with Target.

I’ve reached out to both Target and Amazon for an official comment, but neither could comment at time of writing.

With the announcement that the Kindle Fire has grabbed 54.4% of the Android Tablet market, it’s clear to see that Amazon’s Trojan Horse strategy paid off. As I wrote back in December, the Fire is Amazon’s way of making all of their offerings “real.” Movies, books, and games were Amazon’s core competency back when all of that stuff was on disks and on paper and that core competency is repurposed now for the Information Age.

That’s what all of the other Android tablet makers missed: people don’t want general-purpose devices anymore or at least general-purpose devices in tablet form. There is little need to be “productive” on a tablet when consumption is why most people buy them. Sure someone out there is SSHing into their servers and editing documents in Pages, but the average user plops down on the couch with the iPad and calls up some IMDB or some NSFW Reddit, not a text editor.

The laptop is the last general-purpose mobile device left out there and unless you’re a full bore Open Source user, your laptop is barely your own to begin with. With more and more data migrating to the cloud, the vision of ChromeOS’ refusal to acknowledge local storage may soon be ubiquitous.

What Amazon knew is that nobody cares about tablets. They care about the things they represent. The iPad represents iTunes and its attendant media sources. The Kindle represents books. The GalTab? The Transformer? What do those represent? Angry Birds?

There are plenty who will disagree, citing all of the exciting things they’re doing with their tablets. But what is the tablet you’re going to give for someone’s birthday or a holiday? It’s not the latest from Asus unless that’s definitely on your list. Instead, the use case will trump speeds and feeds and the price will win the day: “______ likes to read, so I’ll get her this Kindle Fire. We can maybe watch a movie on it.”

Once Amazon has all that hardware in the wild, then the real change happens. The Fire gets an upgrade – maybe adds some sharing features, maybe a better screen – and all of a sudden we have a two horse race where once there was a herd. Considering no other Android tablet can touch Amazon’s market share, it won’t be long before Google will be pointing to the Kindle as their Android success story.

Amazon just reported earnings for the first quarter of 2012. Net sales increased 34% to $13.18 billion in the first quarter, compared with $9.86 billion in first quarter 2011. Net income decreased 35% to $130 million in the first quarter, or $0.28 per diluted share, compared with net income of $201 million, or $0.44 per diluted share, in first quarter 2011. The company beat Wall Street expectations; analysts expected a profit of $0.07 per share on revenue of $12.9 billion for the quarter.

“I’m excited to announce that we now have more than 130,000 new, in-copyright books that are exclusive to the Kindle Store – you won’t find them anywhere else. They include many of our top bestsellers – in fact, 16 of our top 100 bestselling titles are exclusive to our store,” said CEO and founder Jeff Bezos.

“If you’re an Amazon Prime member, you don’t even need to buy these titles – you can borrow them for free – with no due dates – from our revolutionary Kindle Owners’ Lending Library. The Kindle Owners’ Lending Library is heavily used by Kindle owners, and it has extremely unusual features that both authors and customers love. Every time you borrow a book, the author gets paid – and we have an inexhaustible supply of each title so you never have to wait in a queue for the book you want. Kindle is the bestselling e-reader in the world by far, and I assure you we’ll keep working hard so that the Kindle Store remains yet another reason to buy a Kindle!”

Unsurprisingly, we didn’t see any concrete number when it comes to Kindle sales. Amazon says that the Kindle Fire remains the best selling, most gifted, and most wished for product on the site. In the first quarter, 9 out of 10 of the top sellers on Amazon.com were digital products – Kindle, Kindle books, movies, music and apps.

Operating cash flow increased 1% to $3.05 billion for the trailing twelve months, compared with $3.03 billion for the trailing twelve months ended March 31, 2011. Operating income was $192 million in the first quarter, compared with $322 million in first quarter 2011.

North America segment sales were $7.43 billion, up 36% from first quarter 2011. International segment sales, representing the Company’s U.K., German, Japanese, French, Chinese, Italian and Spanish sites, were $5.76 billion, up 31% from first quarter 2011. Worldwide Media sales grew 19% to $4.71 billion.

Worldwide Electronics and Other General Merchandise sales grew 43% to $7.97 billion.

Q2 2012 net sales are expected to be between $11.9 billion and $13.3 billion, or to grow between 20% and 34% compared with second quarter 2011.

After missing Q4 financial expectations, the company has been focusing on adding content to Amazon Instant Video, and expanding the Kindle Touch to new markets. Amazon also acquired order fulfillment company Kiva Systems for $775 million in cash.

Ben Chiang, is an editor at TechNode, a bilingual blog based in China.

Are Amazon’s Kindle tablets and e-readers ready to break into the world’s biggest market? We’ve spotted some Chinese Help documentation for Amazon Kindle devices on the company’s China-facing site in a sign that they may be coming for real this time.

Even though the online documentation was yanked, we have a screenshot of Google’s cached version of the site (see below). Amazon’s China office declined to comment.

This isn’t the first time that Chinese Kindle fans have been disappointed. It was widely reported in 2010 that the popular e-reader was going to enter China after an internal document from Amazon China was leaked to the local press. It showed a Kindle e-reader with the Chinese name Jing Du, which literally translated to ‘Golden Reading.’ But after nearly two years, Kindle devices still haven’t entered the country.

As yesterday’s blowout Apple earnings show, it’s a missed opportunity for Amazon. Apple said China alone brought in $7.9 billion in revenue last quarter and has become the second largest market for the company. So it’s time for Amazon to step up and bring Kindle products into China, especially as tablet sales start to eat the market share of e-readers, according to a Digitimes Research report.

There are already many dirt cheap local e-readers like Shanda’s Bambook and Hanvon’s WISEreader. Both accounted for 19.6 and 59.6 percent of China’s e-reader market in the third quarter of last year, according to a report by Beijing-based technology consultancy AnalysysInternational. Both companies lowered the price of their devices in last year. Now the cheapest models are available at RMB 499 (or about $79).

Wang Hanhua, the president of Amazon China said late last year that Kindle products are definitely coming to China. But he didn’t have an exact timetable.

Amazon is debuting a new vertical today, called AmazonSupply, which is a new site for mechanical parts and other hardware for business and industrial sectors. Amazon says the site sells over 500,000 items, including bench-top centrifuges commonly found in laboratories, radiation detectors designed for environmental testing, and carbide end mills used to machine titanium.

AmazonSupply aims to fulfill the parts and supply needs of the business, industrial, scientific and commercial. Customers can shop for items by product, material and brand across 14 categories, including Lab & Scientific, Test, Measure & Inspect, Occupational Health & Safety, Janitorial & Sanitation, Office, Fleet & Vehicle Maintenance, Power & Hand Tools, Fasteners, Power Transmission and more.

Amazon says that most orders of $50 or more receive free two-day shipping. In addition, AmazonSupply will offer 365 day returns, and corporate lines of credit and a dedicated customer service center.

The site has some crossover with Inventables, an online marketplace for technical materials and hardware.

Getting into B2B supplies is interesting for Amazon, considering its e-commerce initiatives have been more consumer-focused. With AmazonSupply, the e-commerce giant is expanding to a whole new set of professional and business customers, including those in the construction, mechanics, automobile, and research industries.

E-books. Again. Amazon and the DOJ vs. Apple and “The Big Six.” The future of reading. A breathtakingly stupid David Carr piece in the New York Times, which thankfully someone else took down paragraph-by-paragraph, so I don’t have to. Elsewhere, an awesome quote which I want to cheer with the force of a million choirs of angels:

I am completely unmoved by the argument that if Amazon forces traditional publishers to sell books at lower costs, then the publishers will go away and we won’t have books anymore. Hogwash. The publishers built for a printed books world may go away, but their digital native versions will replace them.

Yes, it’s time to trot out that obligatory William Gibson quote again:

A middleman’s business is to make himself a necessary evil.
– Neuromancer

There’s certainly more than enough evil to go around here: Evil But Smart, represented by Amazon and its oppressive Kindle monoculture, vs. Evil And Flailingly Inept, aka Publishing’s Big Six, whose “pig-headed insistence on DRM on ebooks is handing Amazon a stick with which to beat them harder,” to quote Charles Stross. (If you question their evilness, bear in mind: “Five of the six major publishers of trade books either refuse to make new e-books available to libraries or have pulled back significantly over the last year on how easily or how often those books can be circulated.” Having attacked public libraries, publishers presumably will next go after motherhood and apple pie…)

Their battle may sell popcorn but is really neither interesting nor relevant. Remember that Gibson quote: Mere evil is insufficient for middleman success. You need to be necessary. That’s a lot harder.

Let’s go back to the basics. (Context: I’ve had four novels published by major publishers, one by a small press, and a graphic novel published by DC/Vertigo.) This, to oversimplify, was the publishing pipeline for most of the last several centuries:

author ⇒ editor ⇒ copyeditor -⇒ designer ⇒ typesetter ⇒ printer ⇒ distributor ⇒ wholesaler ⇒ bookstore/library ⇒ reader

Note how many of those stages are susceptible to digital disruption. Copyediting and typesetting are increasingly algorithmic and automatable, as is design, if you’re willing to limit yourself to a few templates and find your own cover image. Distribution and wholesaling were erased by the Internet. On the other hand, you still have to get an e-book to a reader’s device, and someone still has to take their money.

That’s where Amazon comes in. This is their system, if you self-publish:

author ⇒ Amazon ⇒ (optional) DRM ⇒ device ⇒ reader

Today, the absence of copyediting, design, typesetting, and above all, editing, means that will be one seriously amateur-hour book … but the first three are increasingly algorithmically replaceable. Clearly Smart & Evil has the long-term advantage –

– but wait! As the tedious ebook battle of evil vs. evil continues, a shining new force has arisen, a champion of liberty, justice, and common freaking sense! Ladies and gentlemen, I give you none other than Harry Potter.

No. Seriously. This DOJ thing is actually completely irrelevant, but Pottermore, now that’s interesting. You see, here’s the Pottermore model: DRM-free, directly downloadable to your Kindle, from a non-Amazon source:

author ⇒ Pottermore ⇒ device ⇒ reader

Obviously, JK Rowling can and does pay for the best copyediting, design, and typesetting in the world, and her books have already been edited by capable Big Six editors; but the important thing that Pottermore highlights is that neither Amazon nor publishers are a necessary evil.

True, publishers also provide marketing (although precious little, for most books) and the imprimatur of quality (you’ve read some bad published books, but you have no idea how much better they were than most of what festers on publishers’ slush piles.) But is there any reason other than history and momentum that editing, copyediting, design, typesetting, marketing, and quality assurance live under one corporate roof? Small presses already do an excellent job of all of these things, frequently by outsourcing them. So what’s so necessary about the Big Six, in an era of shrinking advances, when their biggest names can and will pull a Pottermore and start to sell books themselves? Very little indeed.

However. Amazon is equally unnecessary. And if Stephen King or Tom Clancy or someone of that bestselling ilk goes to Amazon and demands the same treatment as Rowling, Amazon can no longer say “we don’t do that” or “that would be far too technically difficult.” They do do that. They already implemented it. And now that they’ve set this precedent, it’s only a matter of time before Capitalized Names everywhere start demanding that Amazon extends that most-favored-literary-nation status to them, too.

The Big Six may be doomed, but now that Amazon has broken the seal on external sites selling DRM-free Kindle e-books, that DRM-laden monoculture will go down with them. Meaning that finally, after years of thrashing, readers will finally get what they have wanted all along: DRM-free e-books sold by Amazon and anyone else who wants to sell them. Three cheers for Harry Potter, and a billion points to Gryffindor.

From a slow start in the aftermath of the Soviet Union, Russia is now Europe’s biggest internet market with 53 million users (compared to number-two Germany at 51 million), and figures from GP Bullhound and comScore indicate that it is also growing the fastest, at 14 percent (other European countries are at less than six percent it says). On top of that, a growing base of middle class consumers — 15 million today, expected to double to 30 million in the next five years in an e-commerce market that is projected to be worth $40 billion — has translated into a veritable boom in the rise of tech companies.

But not all of that growth means big money just yet.

KupiVIP, the Russian flash-sales site, is on track to make $200 million in net sales this year, on revenues of $300 million. Oskar Hartmann (pictured), KupiVIP’s young and bullish CEO and co-founder, who I met while on a tour of Moscow’s tech scene this week (another story on that here), believes the company will be making $1 billion in sales annually within the next five years — pretty modest by the standards of Amazon, a company to which KupiVIP is compared, which had revenues of over $48 billion in 2011, but still making KupiVIP one to watch.

A story that Hartmann tells gives an insight into some of the trials and tribulations of building a startup in a country like Russia:

“It was January 21, 2009, and we were just about to get a new financing round. At the time we had negative 200 million euros in the bank,” recalls Hartmann. He explains that while VCs in Europe consider a deal done when the term sheet is delivered, and in the U.S. when the shareholder agreement is finalized. But in Russia it’s when the money gets wired to a bank account, with the paperwork being effectively meaningless without it. “Then we suddenly got a call from the main investor, who said they’d changed their mind. It was game over for us.”

So they got to thinking fast. “We called our retail partners, and asked if they would be willing to give us six months of credit. We worked out a revenue sharing deal with our biggest retailer. And then our existing VC, Mangrove, gave us a bridge loan. Then our company grew by 40 times in the next eight months.” He said the VC that dropped out at the last minute later approached them to invest again — possibly in the $55 million round the company secured in April 2011 from Balderton, Bessemer, Accel, Mangrove and others. “And they did.”

Since then, KupiVIP (‘kupi’ means buy in Russian) has been becoming an ever more ubiquitous presence in the market on a business that still counts flash sales as its biggest pillar, but now also includes white-label e commerce sites and a full-priced e-commerce site of its own called ShopTime — all distributed on a logistics network created and owned by KupiVIP that includes warehouses, a fleet of delivery trucks and even delivery men who will bring a product and wait at the door until you try the item on and decide whether you want to keep it, and then pay they guy, in cash, if you do.

Most recently, the white-label service, which KupiVIP started building two years ago, has now begun to grow in earnest: it now has nine big brands signed on (Adidas being one of the most recent, going live just this week), with plans to have 23 by the end of this year, launching two new sites every month. White-label is already providing 25 percent of the company’s revenues but they expect that to account for half by 2013.

Hartmann’s big idea for KupiVIP is to sell name-brand fashion at deep discounts (as with other consumer goods like electronics and food, name brand clothes from regular stores can be ridiculously expensive) with the aim of building a solution covering middle class women — and men — in “every region, every city.”

It definitely fills a hole — nothing like this existed before, and Russian women love to shop and are huge impulse buyers. Two of KupiVIP’s biggest assets are more behind the scenes:

The first has been in the creation of that logistics infrastructure. It includes a battery of attractive in-house call center girls (I think some of them may double as models for the site, and one of their incentives was for good performance to get rewarded with photo shoots for the company calendar); plus distribution centers, trucks and a fleet of customer-friendly delivery people who double as sales assistants to work with customers at the point of delivery.

Hartmann says that it had to build this from scratch because existing delivery services were just not up to the task involved: not just sending goods to so many extensive parts of Russia but then being on hand to collect money or the goods if they’re not up to scratch. (Ozon, a competitor to KupiVIP, says that 80 percent of its sales are in cash, too.) You can imagine that if another international e-commerce company like Amazon or eBay decide to really make a play for Russia, this is the kind of infrastructure that they would need to either build as well, or buy.

The other is in the area of data collection: the company is picking up an enormous amount of information about what people like to buy and when. This is an area where KupiVIP is already making acquisitions to improve its position, specifically looking for companies that are “supportive of data intelligence, consumer mining and individualization in shopping.” That information is already helping them shape the product experience for individual shoppers, Hartmann says.

There are some areas that are no-go for KupiVIP. For one, Hartmann says that the company will not touch electronics and books, which are already being served well by Ozon and others, because he believes startups first and foremost need to “solve problems that are unsolved.”

Plus he thinks that even for a company like Ozon these product categories do not make much money. He argues that this was the motivation behind Ozon’s purchase of Sapato, Russia’s Zappos, in February 2012: to be able to distribute more profitable products over Ozon’s own logistics infrastructure. “Books/electronics will always lose money. They want to overlay their delivery engine with profitable products, antiques, fashion and shoes, so it make a lot of sense for Ozon to buy Sapato.”

International expansion is another. “We have no interest in extending outside of Russia and the CIS,” he says. “There are already huge e-commerce companies in Europe. We would have to build up from zero. We need to look at markets where we can add value in the CIS before looking where we can grow internationally.” PriceWaterhouse estimates that the whole of the e-commerce market (including content like games, lottery tickets and money transfer) was worth $9 billion in Russia in 2010 and that this will double by next year. Hartmann also notes that the kinds of market gaps that exist in Russia are in other parts of the world, too — for example Saudi Arabia and India.

How do the financials look today? “We are as profitable as we want to be,” Hartmann answers. There is also talk of an IPO in the next two years. The biggest cost, he says, is customer acquisition and delivery, the area that KupiVIP has built out from scratch. (Delivery can cost 20 euros per sale but the company delivers free.) Those margins improve the more the logistics network is used, which is why we will probably continue to see KupiVIP launch ever more services in the future.

Amazon is now letting developers charge higher prices for in-app purchases thanks to new parental controls it just strengthened.

The company sent out an e-mail to developers today that said:

“With our parental controls functionality now updated, in-app items over $20 may now be submitted via the developer portal.”

Developers depend on these pricier items to make their businesses work since only a small percentage (usually in the single digits) of their users pay in their games. These so-called “whales” are responsible for the bulk of a developer’s revenues. In a study earlier this year, mobile analytics company Flurry found that transactions that were more than $20 make up the majority of revenue for top-grossing games on iOS and Android.

But this business model has caused tension on Apple’s iOS platform. Last year, there were widespread reports that children could run up hundreds of dollars in purchases on their iPods, iPhones or iPads to their parents’ chagrin. Apple has a 15-minute window for purchases after an iOS device owner types in their password. After the 15 minutes passes, they have to re-enter their password if they want to buy more.

Amazon famously has a one-click payments flow, which in a normal case could make a Kindle especially risky to hand to a child or toddler. But the device has parental controls. If they’re set up properly, all purchases require an Amazon.com password or a 4-digit PIN. Kindle owners can set this up from the ‘Settings’ menu on their device.

Higher price points for in-app purchases should also help Amazon boost its reputation as an app store that’s more lucrative per user than Google Play. Another Flurry study showed that the average revenue per user on Amazon’s store is about 89 percent of what it is on iOS. Meanwhile, Google Play has an average revenue per user that’s about one-quarter of what it is on iOS.

The heart of Jeff Bezos’ mission has always to circumvent the traditional “gatekeepers” of commerce. He started with books, an industry ripe for disruption, and moved onto, well, everything else. At this point, his vision has come true. The old gatekeepers in the book sales cycle are on the ropes and electronics companies are already planning to collude in order to maintain a “minimum” accepted price, thereby ensuring Amazon doesn’t eat all of their lunch.

But Amazon is hungry and, like Plainview, they have a long straw. They won’t just eat the world’s lunch, they’ll drink its milkshake, too.

The recent lawsuits against Apple and various publishers are a testament to Amazon’s power. Publishers won’t accept that their product can be sold at Amazon’s prices and Amazon won’t accept that the product can’t be sold at a price that reflects the market. We are, after all, just talking bits shipped to devices and $1,000 made in 1,000 ninety-nine cent increments is the same as $1,000 made in one-hundred $10 increments. Amazon, for the longest time, served as a final lifeline for the paper publishing industry and it seems that this legal move is a way to strip the last vestige of respect from those gatekeepers who, for far too long, made the sale of ideas a process of getting widgets onto shelves. Like the CD makers before them, they just don’t want to give up what has served the industry for so long and so lucratively.

But this is just the beginning. In his letter to investors, Bezos writes:

Arguably, Bezos isn’t a very sympathetic character. His company makes a lot of money and, if we really thought about it enough, we’d realize that he’s a bigger threat to the Mom and Pop stores than even Wal-Mart. At least Wal-Mart helps rural areas retain a sense of community. Amazon is a black box – money in, products delivered. You could live off of Amazon and never leave your house, given enough patience and a good bit of cash.

But it’s this mentality – that you don’t need to roll down to Borders for a book or a movie, that you don’t need to hit the student book exchange to get fleeced on a statistics textbook – that really makes sense in a world where most discourse and commerce is happening online anyway. To hold onto the old ways for sake of the old ways is conservative, to be sure, but it’s also a suicide pact with the writers and creators you’re championing.

Even more than Jobs, Bezos is intent on blowing up the publishing industry. Tim Carmody at Wired writes “He doesn’t care whether Apple, publishers or anyone else stands in the way,” and this is absolutely true. Call him a zealot, but when’s the last time you drove down to the local bookstore and didn’t think that soon this empire of the mind would be gone, replaced by something Gutenberg wouldn’t couldn’t fathom in his wildest imagination? Heck, when’s the last time you drove down to the local bookstore at all?

Online retailer Amazon is extending its Trade-In Program today to also cover CDs – you know, those round, shiny things collecting dust in the back of your closet? Starting now, customers can send in their old CDs to Amazon in exchange for Amazon.com Gift Cards, which can then used to purchase anything on Amazon.com, including, of course, any of Amazon’s 19 million MP3′s.

The Amazon Trade-In Program, for those unfamiliar, is a service that allows customers to send in items to a third-party merchant in exchange for Amazon gift cards. The program currently supports a wide variety of merchandise including movies, textbooks, video games, electronics (including phones, iPads, iPods, Kindles, non-Kindles, laptops, etc.), and more. The items can be packed up and shipped in one box, so if you want to throw your old iPod on top of your CD collection, you can now do that too.

Trade-ins take somewhere between 6 to 10 business days to process, depending on how you shipped them in (e.g., UPS, Post Office). Once verified, you’ll be notified that your item was accepted by the merchant, which you can track in your Trade-In account.

Although the addition of CDs to the program is being announced this morning, the Trade-in website isn’t yet showing them as an option when you go to list an item, nor are they available yet for browsing through in the site’s navigation. Update: the site has gone live.

Also currently unavailable is pricing information – that is, how much you’ll be able to get for your CDs once sent in. Surely pricing will be variable depending on artist, we would guess. After all, your Beatles CD will probably sell fast…your Barry Manilow, not so much.

We’ve reached out to Amazon for more details on this, and will update when we hear back.

Update, 1 PM ET: We’ve been calling and emailing Amazon all day to get pricing details. No response. But for what it’s worth, when listing a new CD for sale (as a merchant), it goes for around $2.00.

Update: 6 PM ET: Finally! The site has gone live. Here’s what Amazon says about pricing:

“Values will be determined based on the individual CD; you can search titles to see the costs.

Items that don’t meet the product description or eligibility criteria are considered not acceptable and will be subject to the Trade-In Return Terms and Conditions. Rejected Items that are eligible for return will be shipped to you within 14 days after receipt, at no cost to you. Rejection reasons and shipping progress tracking for the return package can be viewed from Your Trade-In Account.”

Image credit: miskan, flickr

Amazon is taking the wraps off a new in-app purchasing service today in an effort to make its app store competitive with what Apple and Google offer developers. That should let developers for Amazon’s appstore tap into what has emerged as the most lucrative way of monetizing apps over the past year: staying free but offering virtual currency or other items for purchase inside the app.

After undergoing testing for several months, the new in-app purchasing service is now available for everyone. It’s based off Amazon’s one-click buying experience and applies to digital content like in-game currency, expansion packs, upgrades and subscriptions from inside apps and games.

But as I pointed out last week, the interesting part of this story is not whether Amazon is doing in-app purchases. It’s obvious that the company would do this.

The question is how is it setting up the pricing? You see, Amazon has historically pushed hard for the power to set prices for books and other goods. When it unveiled the appstore last year, it had the ability to discount apps at will. Developers would either earn 20 percent of what they wanted to charge or 70 percent of whatever Amazon ultimately charged — whatever was higher. That irked developers, naturally.

With in-app purchases, it turns out Amazon still has the ability to discount in-app items. But the developers will always earn 70 percent of the list price or what they wanted to charge for it, according to Amazon appstore’s director Aaron Rubenson.

“We’re just following the paradigm that’s out there with the 70-30 split,” he said. “This is a little bit different from the revenue share that we have for paid app sales. We looked at each purchase case separately.”

This is an interesting little compromise that lets Amazon keep its pricing power, while ensuring that developers see no losses as a result of it.

It’s also my understanding that Amazon isn’t mandating that developers only use the company’s in-app purchasing service. That said, Google’s in-app purchasing technology won’t work on the Kindle Fire, according to Rubenson. For that device, developers will have to use Amazon’s system. But on other tablets and phones, developers can use any number of in-app purchasing systems. That’s different from other app stores: Apple prohibits developers from using other in-app purchasing system for digital content. Google technically has the same rule although it hasn’t really enforced it until recently.

Here is the fine print if you want to read it yourself. It looks like there is a special exception for news media products:

4. Royalty; List Price. For each sale of an In-App Product, we will pay you a Royalty equal to 70% of the List Price as of the time of purchase. However, no Royalty is due for (a) In-App Products with a List Price of $0.00, (b) Subscription In-App Products listed in our News or Magazine categories (or similar or successor categories) that we make available to end users at no charge as part of free trial subscriptions or other promotional offers of up to 30 days (or any longer period you approve), or (c) other Subscription In-App Products that we make available to end users at no charge as part of free trial subscriptions or other promotional offers that you approve. For sales of Subscription In-App Products to renewing subscribers, your Royalty will be calculated based on the lower of (i) the then current List Price and (ii) the List Price in effect at the time the applicable end user first subscribed. A Royalty is due only for sales for which we have received final payment from or on behalf of an end user. If an In-App Product is purchased using a credit card or bank account deduction mechanism, final payment will be deemed to have occurred when the applicable credit card company or bank has fully settled the payment for the applicable purchase. “List Price” has the same meaning with respect to In-App Products as the meaning set forth in the Agreement with respect to Apps. You will update the List Price for each In-App Product as necessary to ensure it meets the List Price requirements.

In-app payments are something that Amazon is very well-positioned to do as the company has had a decade to build up expertise in online transactions. Coincidentally, it’s an area that Google is historically weak in providing. And developers are noticing. With about 34,000 apps and a very attractive base of paying customers, Amazon’s app store is becoming one to watch among mobile developers.

Flurry has reported that the average revenue per user from Amazon’s store is about 89 percent of what Apple iOS platform produces. Google lags behind with a revenue per user that sits at about 23 percent of what iOS can do. Keep in mind though that Amazon’s userbase is still much smaller than the audience that Google Play can reach. So Google Play might be able to make up for its weakness in monetization through scale.

Below is a video explaining Amazon in-app purchases plus some excerpts from the documentation that show the differences between Amazon and Google’s systems:

Living in Seattle, you tend to find yourself in the company of tech people all the time. With Microsoft, Amazon, Adobe, Google, and a dozen other major companies established in the area, it’s never a surprise when you find out the guy next to you at the bar is working on Windows Phone 8 or Half-Life 3. This week, I was lucky enough to get a chance to see what Amazon has cooking for its next generation of e-readers. Their new offices and the mysterious Lab 126 are just down the street, after all, so I’m actually surprised it hasn’t happened before now.

Back in November, I speculated that the new Kindles and Nooks and what have yous might have glowing screens, the likes of which we’ve seen occasionally but were never fully implemented. It turns out Amazon was thinking the same thing, and actually bought a company that was, I am told, the world leader in light-guide technology. They’ve finally gotten it to the point where it’s ready to be released, and a new generation of glowing Kindles will be coming our way sometime this year.

Incidentally, that acquisition doesn’t appear to have ever been reported, so although it happened in late 2010, this is the first anyone has heard of it. The company, Oy Modilis, was founded in 1991 in Helsinki, and has a number of patents relating to this sort of thing. This one, for instance, seems to cover the type of lighting technology used in the new Kindle.

The device I saw was crudely camouflaged in a sort of cardboard enclosure, but the screen was clearly visible. With a tap, a slider popped up on the screen, and as it was dragged to the right, the screen lit up evenly with a rather cool light. In the dark, it was plainly noticeable as a glow, and in uneven light — say, shade or a shuttered room — the slight illumination made the screen much more readable. At full blast it was definitely projecting some light (technically speaking it was reflecting it), but it was still a soft glow and not the harsh flashlight of a backlit LCD.

I commented on the temperature of the light — it was that blue-white glow found in uncorrected white LEDs, not the warm light on off-white that most people associate with books by lamplight. But, of course, the e-ink screen is in fact grey and dark grey, not black on off-white, as paper is, so a cooler light may actually work better. At any rate, they are apparently sensitive to these issues and looking into it. I thought that the text looked better as well, but it’s possible that this was the result of improved font rendering and aliasing reduction, or perhaps something to do with the light. At any rate, it wasn’t any of the crazy new bistable displays we’ve been seeing at trade shows (alas).

As for the shape of the device, it was impossible to tell, wrapped as it was in its little cardboard box. But the size appears the same, and the whole point of purchasing the light-guide company was to get the team and their patents, which essentially laminate the light diffusion layer right onto the screen without adding much in the way of depth or interfering with the touch system. I was told the industrial design isn’t finished yet, but I ruled out things like ruggedness, waterproofing, or a flush-front screen — all things, by the way, I suggested they look into. It shouldn’t be any thicker, though it will have to accommodate the LED circuitry and presumably a larger battery.

The current crop of e-readers is, as I recently lamented, both troublingly homogenous and still not good enough for paper-lovers like myself. The new Kindle doesn’t look like it’s going to address all of my issues with this kind of device, but the improved display will definitely set it apart from its rivals. We’ll know for sure when it comes out later this year.

[note: the top image is a concept image from Flex Lighting, not a real device]

The most interesting part of Amazon’s move to provide an in-app payments flow is that they’re ceding pricing control to mobile developers.

Amazon has been testing a new in-app payments system with several top-tier mobile developers for several months. It’s a big deal because there has been a huge shift over the last 18 months toward giving away apps for free instead of selling them for a dollar or more. This move would bring Amazon’s Android appstore closer to parity with Google and Apple’s stores for developers.

But the part worth noting isn’t that Amazon will offer an in-app purchases flow. It’s obvious that they would do that, given their experience in online payments and commerce and need to compete with Google’s app store. In fact, I have no idea why Bloomberg decided to report this story now, since top-tier game developers have been using Amazon to process in-app purchases since last fall. I even discussed this on-stage with developers at a conference in February. So this story is actually several months old. (Weird.)

The part worth pointing out is that Amazon is letting developers set their own prices for virtual currency and digital content. Developers set the prices and Amazon takes a 30 percent revenue share, a split that seems benchmarked off the precedent Apple set, according to conversations I’ve had with developers in the beta.

It’s a departure from the strategy the e-commerce giant tried to pursue last year. The Seattle-based company has historically fought to control the prices at which it sells both physical and digital goods as a way to undercut online and brick-and-mortar rivals.

When Amazon opened the developer portal about a year ago, it set a very unusual pricing policy for paid apps. Mobile developers couldn’t set the final prices of their apps. They would either earn 70 percent of the sale price (what Amazon actually sold the app for) or 20 percent of the developer’s desired price (whichever was higher).

Needless to say, this pissed off many developers. The International Game Developers Association lambasted Amazon’s policy a year ago, saying that “Amazon has little incentive not to use a developer’s content as a weapon with which to capture marketshare from competing app stores.”

Now it looks like Amazon is giving developers a little bit more control.

So why do in-app purchases get a special exception?

Because in-game economies are very painstakingly designed and calibrated to make sure there is an even balance between currency sources and sinks. Developers have to make sure a user’s progression through a game seems natural and addictive at the same time.

Letting someone else discount your in-app purchases at will would destroy this delicate balance. It would basically be unpalatable to game developers, who would forgo Amazon and just stick to Google Play or iTunes. It would mean that Amazon would forfeit the most lucrative part of the app economy — gaming.

Amazon hasn’t formally confirmed the beta or the revenue share. The store’s terms of service for developers still have no mention of in-app purchases, unlike Apple and Google which both issue restrictions. On iOS, developers have to use Apple for in-app purchases of digital content. Google has a list of “authorized payment processors,” which really means Google Checkout (er, Wallet) although the company hasn’t appeared to start enforcing it until this year.

The next interesting policy question for Amazon is whether this flat revenue share and pricing control extends to other types of in-app purchases. Like media subscriptions. (Cough.)