Amazon Heads for the Web-Free Internet

Unfortunately, Jeff Bezos and Sir Winston Churchillwill never share a trade show keynote bill.

Imagine Bezos’ reaction to his podium-mate’s booming proclamation, “It is a mistake to try to look too far ahead. The chain of destiny can only be grasped one link at a time.”

Perhaps the Amazon CEO would offer a polite retort along the lines of, “I don’tthink so, sir.”

With the recent restructuring of Amazon (Nasdaq: AMZN), Bezos looks to be positioning his company to join a race that has barely begun — Internet commerce that goes beyond the World Wide Web.

Time Magazine’s 1999 Person of the Year is eitherdivinely dialed in to his company’s destiny orabsurdly lucky.

New Frontier

Analysts are forecasting the emergence of a new platform forInternet commerce, based on two innovations.

First, there will be executable software code that resides on users’ PCs and mobile devices and lets one machine orindividual to talk to any other one on the Internet. Second, there will be tiny integrated circuits embedded withinphysical objects that will extend the Internet intothe material world.

This new “X Internet,” as Forrester Research calls it,will begin to emerge around 2004 and is expected toeclipse the Web as the primary e-commerce medium.

At a recent trade show, Forrester founder George Colonypredicted that Amazon might not be a key player in theX Internet, given its Web-centric offering.

My advice to Colony: take a close look at the detailsof Amazon’s restructuring.

Rallying Resources

Amazon’s application software development andthird-party services implementation now residetogether in one division.

One of the key drivers of Amazon’s realignment, asstated in the restructuring announcement, is “to putthe proper resources behind our third-party servicesbusiness.”

Foresight or dumb luck? Time will tell, but it’s clearthat Amazon’s first stabs at third-party servicescondition users to a new kind of online experience,one that hints at how analysts have described the XInternet experience.

Honorable Intentions

Look at Amazon’s Honor System service. It allows third-party sellers touse Amazon as a payments clearinghouse, complete withpatented 1-Click ordering. Amazon customers can usetheir Amazon accounts to pay other online merchants.

Right now, the Honor System can only accommodatevoluntary donations for Web site usage and access tocontent, not physical product purchases, but evenAmazon has to start somewhere.

What’s telling — and perhaps prophetic — is that thisblurring of lines among online sellers is exactly whatanalysts say will typify X Internet commerce.

In Amazon We Trust?

Eventually, online shoppers will share profile andpurchasing information with multiple merchants andpeers, in order to expedite a series of relatedtransactions, industry pundits say.

So booking business travel on tomorrow’s Internetmight automatically check for colleagues’ meetingavailability and present regional travel guides forpurchase online or at physical stores en route,suggests one analyst.

But where and how will user data be stored securely?Analysts admit this is a looming uncertainty.

Why not with Amazon?

From where I’m standing, training 29 million customersto rely on your company to pay multiple merchantslooks like a huge bid for consumers’ trust. Not tomention an attempt to evolve online buying behavior.

Half Helper

Adding texture and legitimacy to this multi-merchantlandscape are other early entrants contendingalongside Amazon for a share of public trust.

EBay’s (Nasdaq: EBAY) Half.com offers a downloadableapplication called PricePatrol, which alerts shoppers perusing othere-tail sites to cheaper items available at Half.com.

There’s no payment component, but a client-basedsoftware application that intelligently processesinformation from multiple merchants deserves mentionin any discussion of X Internet precursors.

Interestingly, Forrester’s Colony doesn’t like EBay’schances for X Internet stardom either.

Two words, Mr. Colony: Price Patrol.

Go Gators

And then there’s Gator.com. Thethree-year-old company offers a downloadableapplication that compares cross-merchant prices,stores login IDs and passwords, and targets promotionsper user.

All sensitive personal information is stored andencrypted on 27 million Gator users’ PCs.

Again, no central payment functionality, but anothermulti-merchant client-housed interface forming userhabits and gaining trust. Smells like X.

Blue-Ribbon Bezos

In the early going, Amazon will likely benefit fromcompetitors like these who collectively acclimatizeusers to dynamic multi-merchant shopping paradigms.

But if the short history of Web-based e-commerceoffers us any lessons, it’s that clear X Internet winners will emerge.

With an early-mover’s edge and a brand new departmentdevoted to application software and third-partyservices, Bezos is destined to emerge as a winner. Again.

What do you think? Let’s talk about it.