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In the first session at the D: All Things Digital conference at the Four Seasons Aviara in Carlsbad, California this morning, it’s Amazon.com (NASDAQ:AMZN) CEO Jeff Bezos. We’ve already had a bit of Amazon news this week which seems sure to be on the discussion list: a price cut for the Kindle e-book reader and the launch of a new online book store by former Amazon partner Borders (BGP). I’ll be blogging live; keep loading this post for updates.

Update: The company plans to launch a for-pay video streaming service. See below (item 11) for more.

Bezos is being interviewed by Walt Mossberg.

  • Mossberg says Amazon is synonymous with “e-commerce.” But he is talking about how they have moved beyond books. Bezos says they have million of products in stock; but sell overall 10s of millions. Also selling digital products. Mossberg: Why not stay in primary niche? Bezos says they have a high bar when they undertake new things not in the center of what they already know how to do. People thought music and DVDs made sense; but we started electronics and toys, apparel and shoes. Started a focused site just to sell shoes. People say, what are these guys thinking. We focus on customer needs, rather than just what our skills are. Customers will eventually need things that you don’t have skills for. You have to renew your skills. On the Kindle: “We thought what customers need…is a device that made it very very frictionless to buy and read electronic books.”
  • Bezos is talking about the new skills its needed for building the Kindle. He says it is a big vertically integrated stack of services and business relationships. Had to work with publishers to make sure prices of electronic books was attractive. Had to reinvent the wireless business model. Mossberg said the most impressive thing about the Kindle was building in cell phone wireless to allow you download books on a whim. Mossberg says that feature is “brilliant.”
  • Bezos says on title by title basis; 125,000 titles available for Kindle. Kindle units are more than 6% of those total sales of that universe of titles.
  • Lowered the Kindle price to $359 for $399; Kindle is selling well, we’re extremely happy about it. There will a second version, a third version, a tenth version. He says the second version is not that near.
  • Bezos says over time, real books won’t go away, just as horses have not gone away.
  • Bezos is talking about “self-important devices” like microwave ovens that beep when they are finished; he notes that the Kindle doesn’t do that kind of thing. He’s saying there are things you can do with the Kindle that you cannot do with a regular book. Like dictionary look-up. Changing the font size. And then some “whoppers,” like wireless deliver of the book in 60 seconds. Bezos notes that he is hiding complexity, you don’t have to know who the carrier is. (It’s Sprint (NYSE:S), by the way.)
  • Mossberg notes that there is a keyboard on the Kindle. Bezos notes that the ink in the display is very close to the surface, which makes annotations on the screen difficult. But you can do it with the keyboard, and the annotations are stored on the server, not on the device.
  • Bezos is back on the horse analogy. Mossberg says people love physical books; Bezos notes that people also loved their horses, but that does not mean you want to ride your horse to work. He notes the smell of books comes from glue, ink and mildew. He’s not convinced that people intrinsically like that smell. Bezos says he is not trying to replace people’s love for books. What is important is not the container, its the narrative. Long-form reading is important for society…If one outcome of Kindle is making long-form reading more frictionless, that is a good thing.
  • Mossberg is wondering about feature creep in the Kindle. Bezos says think of digital cameras. He likes having one in a cell phone, but still has a digital camera. Kindle is built for reading. You can add camera to cell phone, as long as it does not interfere with calling., Our device is not a cell phone, it is not a lot of things. Should be able to browse the Web. But electronic ink is not ideal for Web surfing. It is not the right display technology for a high quality Web browser..browser is a really useful companion for reading.
  • Last item on Kindle. Mossberg wonders if it could ever be significant part of revenue. Bezos says, yes, it could be a meaningful financial component of the company. Did $14 billion in sales last year; Bezos is avoiding all attempts by Mossberg to put a number on what would be meaningful. (Citigroup’s Mark Mahaney had some comments on this issue recently.)
  • Next topic: music and video downloads. Bezos says he is “very serious” about the business; he says it is in some ways harder because there are so many participants. It has a glamor element, that attracts people; he says they are working on for-pay streaming service that will be unveiled in a few weeks; will start instantly, a la carte for pay. (Hey, actual news!)
  • OK, they are now talking about Amazon’s S3 Web services, which allow you to build applications in the cloud without having to build your own data centers. The compute grid, Bezos says, is a good idea. And it is going to happen. It makes a lot of sense for many applications. It can be so scalable. You can scale up and, importantly, scale down.
  • Bezos says the average person will think of Amazon as a place to buy digital cameras and shoes, etc., etc. But the services could be a meaningful business over time. As a seller, our third-party sales business is the way you think of Amazon. We started working on this a little over four years ago. Amazon is a big Web application.
  • On the economy: We do have some positive factors in our business in that regard; half of our deliveries are done by the U.S. Postal Service. They stop at almost every house. It is super efficient. He says they have not seen a hit from the slowdown in the economy.
  • Bezos on the Roku/Netflix movie streaming box: My own guess is that separate boxes are an immediate step, and that streaming capabilities will be built directly into television sets.

And that’s it.

Source: Amazon To Launch Paid Video Streaming