It looks like Amazon is opening its own App Store on Android using many of the more restrictive policies employed by Apple…

Earlier today, after several tips, we guessed that Amazon may be close to launching its own app store for Android — yes, another Android app store. Sources we reached out to weren’t sure about what exactly Amazon was launching, but many had been asked to sign NDAs about something. Now we seem to know a bit more. And yes, it appears that Amazon is on the verge of launching its own app store for Android.

I think there’s a broader strategy here but to understand that we have to look at Amazon’s other digital media stores on Android.

Google does not want to be a retailer.  The margins are too small, the headaches are too large (returns?) and it’s not a terribly interesting technological challenge.  They sell ads which are high profit and low maintenance and they clearly want to keep their focus on that.

At the same time Amazon IS a retailer and they’re looking at a future where goods are increasingly being sold as pure digital representations.  More importantly they’re looking at a present where Apple gets most of those sales.  So their focus has to be on competing with Apple without completely reinventing themselves. 

That’s where Android comes in.

Amazon is uniquely positioned because they’re the only retailer with existing digital businesses in every Apple market AND the infrastructure to handle Android’s future growth.  That makes them Android’s best bet against Apple.

Which brings us back to the App store.

Google needs to keep the Android Marketplace alive if only to pay lip service to their openness. But by their own admission they don’t make money off it and the user experience is a disaster.  This puts Google between a rock and a hard place because Android needs a better app store but they can’t open a second one.

At the same time Amazon needs Android to stay viable or it can’t feed the company’s other digital businesses.  So it’s in Amazon’s best interest to offer a better App store experience (and in the best interest of carriers to take advantage of that). 

In the end this gives us a scenario where it’s in the best interest of Google, Amazon and the carriers to support an Amazon app store.  If they’re smart they’ll let the Android Marketplace fade into a dark corner of the handset dedicated to enthusiasts while Amazon’s App store rises to challenge Apple in the application space.

Fred Wilson has a post up today in which he uses Google’s upcoming social effort to highlight why he thinks individual social sites win out over social layers that seek to aggregate content. 

Q. Why did Twitter succeed and FriendFeed fail?

A. Because FriendFeed was largely a social aggregator whereas Twitter is a service with specific social intent.

I think this is an important distinction. I have not seen any breakout social layers. The social services that have broken out to date have been services where a user has a very specific intent.

Social engagements are weird out of context. Comments to this blog make perfect sense on this blog but less sense when they are tweeted out into a Twitter stream or show up in FriendFeed.

There is value in social aggregation but not huge value.

The main problem I have with Mr. Wilson’s point is he’s arguing functionality in an area where functionality is trumped by other concerns.  So while he’s right that social engagement suffers in an aggregated environment I think he’s wrong in assuming users will treat that as their primary concern.  Let me explain…

Point #1: The aggregator will always take hold in a growing information industry. 

The problem with a growing information industry is that it creates too much information and people are limited by the time available to them.  Since time is a limited resource people are generally willing to give up functionality to use less of it. 

Think of an iPhone.  You’d absolutely get more functionality from a separate digital camera, iPod touch and smart phone.  But pocket space is a limited resource.  So you choose a device with slightly less functionality to save pocket space. 

The same is true here.  In a growing information industry time will always be the limiting factor which means people will always treat it as their primary motivator.  Even if it means giving up superior social engagement.  But I think there’s more to Google’s strategy here…

Point #2: Aggregators turn individual sites into parts of their whole and in doing so rob individual sites of their “Mind Share”

I once asked a friend of mine what her favorite part of Facebook was and she, without pause, said Farmville.  The point here isn’t her love of Farmville but the fact that she thought it was “part of Facebook”.  Because to her Facebook has defined itself as the portal to Farmville and in doing so has used the game to enhance its own brand. 

Some will say that’s because of her lack of savvy but I reject that.  Because I’m pretty savvy in the ways of the web and I see the same behavior in myself. 

Around 90% of my personal browsing is derived from three aggregation sites (Techmeme, Memeorandum and WeSmirch) and I don’t often pay attention to the individual sites that make up that content. 

Point #3: Aggregators can use their leverage to beat content sites

Once an aggregation site is dominant it can give its own services preferential treatment.  So it pays for a company like Google to do whatever it can to become the aggregator of information even if its goal is to establish services with specific social intent.  Because being the aggregator gives them a lot of leverage. 

That brings us back to Google’s social layer.  What they seem to be doing is leveraging the specific intent sites they have to make themselves the dominant aggregator.  If that works they can leverage their position as the dominant aggregator to create more sites with specific social intent.  In doing so they create a positive feedback loop that could reestablish Google as the center of the web universe. 

As much as I enjoy Loren Feldman’s work I think I enjoy people’s reactions even more.  Or at very least am more fascinated by them.  That came to mind when reading this rather glowing piece entitled “Loren Feldman is the jester in the court of web 2.0”.  In it Tom Foremski lays out why he enjoys the puppet shows (and other related antics) that come out of 1938 Media. 

But while I enjoyed the piece what interested me more was this sentence…

(I’ve been blocked and called names because of my re-tweets of Loren’s material but that won’t stop me. It’s a guy with a sock (puppet) on his hand — people need to lighten up.)

The people who do stuff like this baffle me because you have to abandon all self perception to act in such a way. 

I mean, there’s simply no way acting like that doesn’t come across as petty.  At the same time if you look at the real success stories of the past you find almost all were people who elevated their detractors.  People who took great pains to surround themselves with a system that empowered others to criticize them despite their status.  This is true of everyone from George Washington to Bill Gates. 

The true giants of our time have always been people who accepted criticism gladly. 

For good reason.  No matter how self aware a person is they can’t see themselves completely accurately.  It’s just not possible.  At the same time most people in the world are determined to avoid conflict (and most of those who don’t avoid conflict are people who are just out to start trouble for trouble’s sake).  Making it that much harder to get a true view of yourself.  So having someone who will tell you the truth about yourself and your world is actually a tremendous gift. 

And perhaps more importantly it’s a gift that people will admire you for accepting.

I’d been reading TechCrunch since very early on (probably the first 6 months) yet I didn’t really start to respect Michael Arrington as a person until he became friends with Loren Feldman.  Because while I enjoyed his posts it’s not a sign of greatness to spout your opinion.  Embracing your critics on the other hand shows someone striving to be more than they are and that’s profoundly admirable. 

(They’ve since had a falling out in what seems like a text book example of two people who do in fact care about each other getting upset over something that seems small and meaningless to everyone not emotionally involved and missing the fact that their hurt is a sign that they are still friends despite what they tell themselves.  But since I really don’t know either of them I’m obviously speaking out of school)

I guess this was kind of a tangent and I almost regret posting it because it does take away from the fun of the 1938 Media videos but I can’t help it.  As much as I enjoy his work I also find Loren Feldman has become synonymous in my mind with this troubling movement where people swear they’re in favor of free speech but then do everything in their power to destroy those who express anything they don’t agree with. 

It’s scary because no one wants to condemn them for acting that way but it’s those people you really have to worry about in society.  The flat out dictator is something everyone can see as bad but the guy with the dissonance to be a dictator while still fooling himself into thinking he’s not is the true danger. 

Dan Frommer of Business Insider wrote an interesting article comparing Google TV to Apple’s recently announced TV product.  Let me give you a few quotes.

First his take on Apple…

Apple made it clear today that it's trying to complement the gadgets that are already in your living room and hooked up to your TV. Apple TV is an add-on -- it's basically there to provide a few extra streaming features, in addition to your cable box and videogame console.

And Now Google…

Meanwhile, Google is trying to invade the living room and take over. Google TV is a huge, ambitious attempt to make Google the focal point of your TV experience. It sits between your cable box and your TV, tells your DVR what to record, searches the web, and seems to add a lot of complexity to your entertainment experience.

He then quotes Michael Gartenberg (an industry analyst) who backs up this theory by saying…

Analyst Michael Gartenberg sums it up nicely on Twitter: "Apple and Google taking two different approaches. Google wants input one. Will never get it. Apple wants input two and might."

The reason this caught my attention is because I think it’s completely backwards.  Apple’s the one trying to take over while Google’s the one playing along.  Let me explain…

Apple TV

What Apple is trying to do is turn TV into a per unit consumer transaction.  Much like they did with the CD.  CDs used to be packaged in a way that forced the consumer to buy lackluster songs in order to get the songs you actually wanted.  In this way the music industry pumped up their profits by forcing you to pay the same price for each song no matter what the quality of the song was.

iTunes changed all that by giving consumers the ability to buy products on a per song basis and Apple reaped huge benefits (while the Music Industry saw huge losses)

Cable, with its $149 per month charge, is pulling the same trick on any household that doesn’t watch 149+ unique hours of Television per month.  They’re taking a bunch of lackluster shows and tying them together so you must buy them all to get the few you want (ever hear the phrase “1000 channels and still nothing good on TV?”).

That’s what Apple TV seems designed to change.  So Apple’s goal really is to take over the industry it’s just a long term strategy.

Google TV

Google on the other hand is latching on to the existing Cable experience.  They’re trying to enhance the experience in the same way a surround sound stereo would enhance a TV broadcast but they aren’t trying to change it.  More importantly they aren’t trying to deprive the existing players of revenue as much as they’re trying to use their own overlay to generate even more revenue from advertising. 

The Comparison

To conclude I’d put it this way.  In a future dominated by Google TV you still need a cable box while a future dominated by Apple would kill the Cable companies off completely (their Cable TV divisions at the very least).  So it’s really Apple that’s playing to rule the world.

As far as each product’s chances of success I’d say this…

Google’s success depends on their interface.  If they can make it compelling enough (and they aren’t anywhere near that yet) they could succeed in becoming another component of your average living room (like Surround Sound has in most households).

Apple has a much harder road ahead of them.  The fact that they could only snare one other TV network is not promising (ABC is owned by Disney whose largest share holder is Steve Jobs so it really doesn’t count). It shows that the TV Networks are aware of the power Apple now has in the music industry and are wary of making the same mistake.  That will be hard to overcome and I’m honestly not sure if Apple can do it or not. 

I’ll be honest here.  Through contacts of mine I knew that Apple was going to release an iPod Touch with a camera in it.  So I made the mistake of writing this post in advance.  Now the event has happened and this post requires some edits.

Why?  Because the camera sucks.  0.7 megapixels at 960x720 to be specific.  That stinks. 

But it’s a beginning.  A first step to the iPod Touch starting a revolution in Digital Cameras in the same way it’s doing with gaming now (Apple claims the iPod Touch ”outsells Nintendo and Sony portable game players combined” though I haven’t had time to look into those numbers).  

Because There's never been a fully programmable camera (much less a camcorder). One where the individual developer could write programs that actually incorporate the camera into applications and Web Sites.  Imagine being able to hand your Grandma an iPod Touch that allows her to upload photos to the web without touching a computer. 

This is big.

Of course there was already a camera on the iPhone but saying that misses the point.  The point here is how cheap the iPod Touch is as a solution.  It's bringing the software revolution that started on the PC to the Digital Camera with no contract required. 

Let me give you an example that demonstrates the impact of this…

A while back I had a consulting job with a construction company.  They had 37 foreman positions that monitored various projects and they wanted a way for those foreman to take onsite pictures, annotate them and then get them to the corporate office in real-time. Back then there was no easy way to do it.  We eventually used a netbook solution but it was inconvenient to carry around and required the company maintain a bunch of netbooks (viruses, malware, etc...). 

With the new iPod Touch we could create the same solution but it would fit easily in the pocket and would require no administration.  Not to mention being over $100k cheaper than buying each employee an iPhone ($118,511 to get each person an iPhone and pay for the contract vs $8,473 to get each person an iPod Touch).

See the point now?

So while the poor quality of the iPod Touch’s camera is disappointing I’m still excited.  I can’t imagine Apple leaving the camera untouched in the next generation.  Meaning 1 year from now we’ll be looking at an iPod Touch with a 5 megapixel camera and a boat load of applications to enhance it.  When that day comes Digital Cameras might just find themselves obsolete.