TechFlash: Seattle's Technology News

Blue Origin vehicle test launch day, west Texas, November 13, 2006. Courtesy Blue Origin.

Amazon CEO Jeff Bezos has kept a tight lid on his commercial space flight project, Blue Origin. But with the Obama administration looking to outsource astronaut transport duties to private space contractors, the company is talking a bit more about it plans. Space.com reports Blue Origin will use a recently announced $3.7 million grant from NASA to "develop an astronaut escape system and build a composite space capsule prototype for ground-based structural testing."

Amazon.com founder Jeff Bezos is known for a lot things: e-commerce, the Kindle and an enormous laugh. But who knew that the Seattle entrepreneur had developed the Midas touch when it comes to angel investing?

BusinessWeek, working in conjunction with YouNoodle, today released its list of the top 25 tech-oriented angel investors in the U.S. Bezos ranked seventh on the list, boasting 18 angel investments all of which are still alive today.

We're excited to kick off the TechFlash Live event series for 2010 with a fun networking get-together and panel discussion at a great venue, Seattle's Showbox Sodo, on March 23rd. The topic for the evening discussion will be the future of advertising. Details and registration are available here.

It promises to be an insightful and timely discussion.

Advertising is at a crossroads, with digital innovations creating better ways for companies to reach their customers and build their brands using everything from traditional websites to video games. In the meantime, many technology startups are faced with a dilemma — bet the future of their businesses on advertising, or look for alternative sources of revenue?

Amazon.com has come under pressure from various state legislatures that want the online retail giant to collect sales tax -- just like brick-and-mortar retailers. Now the chairman of Sears, one of the nation's largest brick-and-mortar retailers, is weighing on the issue, saying states should level the playing field when it comes to Amazon.

Free books are among the most popular titles in Amazon's Kindle store. Now the online retailer is adding to its inventory of free e-books, with 65,000 largely out-of-print classics from the British Library, including works by Charles Dickens, Jane Austen, and Sir Arthur Conan Doyle.

Presumably these 19th century works don't have the same copyright concerns that prompted Amazon to oppose Google's settlement with author and publisher groups over its digital book project. The British Library titles were previously scanned by Microsoft Livesearch, making them a relatively easy pickup for Amazon.

It's been a busy week so far in Portland's startup community. Yesterday, Jive Software CEO Dave Hersh announced that he was stepping down after nearly a decade on the job. And today word comes that Portland-based Monsoon has been sold to Alibris, which competes against Amazon.com in the used book space.

Monsoon helps merchants sell books, DVDs, CDs, games and other products on the online marketplaces of Amazon.com, Buy.com, eBay and others.That's also an area where Seattle-based Mercent -- backed with $14 million from Madrona Venture Group and others -- is active. [Post updated with comments from Eric Best of Mercent]

Supporters of the open-source Linux operating system are responding with indifference to last night's news that Amazon will pay Microsoft an undisclosed sum in a patent deal that covers the e-commerce company's use of technologies including Linux servers, and open-source components of its Kindle e-reader device.

The implication of the deal is that Amazon is paying Microsoft to use Linux, and thereby supporting Microsoft's longstanding and controversial contention that Linux and other open-source technologies violate its patents. But Jim Zemlin, executive director of the Linux Foundation, says the weird part is the way Microsoft went out of its way to single out open-source technologies in its statement about the deal.

Microsoft and Amazon.com have reached an agreement that gives each company a license to the other's patent portfolio, in a way that could revive one of the Redmond company's longest-running controversies. That's because, as part of the deal, Microsoft says it's granting Amazon patent-related "coverage" for its use of open-source and proprietary technologies in its Kindle e-reader, and its use of Linux-based computer servers.

One practical effect of such cross-licensing deals, as they're known, is to head off potential patent disputes. In that way, the agreement amounts to a peace accord between the companies. At the same time, the deal could raise eyebrows in some corners of the technology world, if it's interpreted as Amazon implicitly endorsing Microsoft's claims that Linux and other open-source technologies violate its patents. Open-source advocates have long disputed those claims.

Microsoft says in a news release that Amazon.com will pay "an undisclosed amount of money under the agreement" -- signaling that Amazon is paying to avoid a possible patent claim from Microsoft. No terms of the deal were disclosed.

Amazon.com and Wal-Mart are engaged in a fierce e-commerce battle, with both retail giants vying for the mantle "Wal-Mart of the Web." The companies have engaged in back-and-forth online discounting battles over top-selling books, DVDs, and other products. Now there are signs that Wal-Mart is getting more serious about an area that Amazon is targeting as well: internet movies.

The New York Times reports Wal-Mart is buying Vudu, a Silicon Valley startup that delivers internet movies and TV shows to HDTVs and Blu-ray disc players. Such a service could push Wal-Mart into competition with companies like Netflix, Amazon, and Apple, which are all have streaming movie offerings.

A new study by research firm Millward Brown indicates that Amazon.com is the most trusted brand in the U.S. Others in the top five include FedEx, Downey, Huggies and Tide. Interestingly, the study also placed Toyota in the top 10, an the researchers note that the results were compiled before the recent issues arose with the car maker's numerous recalls.

Amazon.com's chief rival, Wal-Mart, did not make an appearance in the top 10. Amazon did encounter some consumer backlash last year after the company deleted copies of George Orwell's "1984" and "Animal Farm" from the Kindle electronic reading device.

Amazon.com has been testing its Kindle DX electronic reader with a handful of universities as a replacement for printed materials in courses. Now Princeton University — Amazon CEO Jeff Bezos' alma mater — is giving its assessment. While the DX earned praise for its battery life, portability and paper reduction, students and faculty had issues with the device's ability to highlight and annotate text, its folder structure and navigation controls.

The feedback, which mirrors what we heard last year from some University of Washington students who are testing the DX, may inform Amazon's development of future e-readers.

Things are heating up for Amazon.com on the sales tax front again. The California Senate just passed a bill that would require online retailers like Amazon to collect sales tax on web purchases. According to reports, the measure was part of a $5 billion budget package making its way through the California legislature. Virginia, Colorado and Illinois are also considering sales tax bills targeting online retailers.

Amazon — which only collects sales tax in a handful of states, giving it an advantage over brick-and-mortar retailers — fought hard against a similar wave of bills last year, and managed to stomp out most of them. But for cash-strapped states, desperately seeking new sources of revenue, the "Amazon tax" continues to be a powerful draw.

Amazon.com Chairman and CEO Jeff Bezos sold off two million shares of his company on Feb. 16-17, netting approximately $234 million, according to a filing today with the Securities and Exchange Commission. It's not clear what Bezos plans to do with the proceeds (though his personal space project Blue Origin appears to be ramping up its activities).

Amazon.com continues to make its Kindle electronic books available across a range of devices. The online retailer just released a free Kindle app for BlackBerry devices. Amazon already has Kindle apps for Apple's iPhone and iPod touch, and Windows-based PCs. The company says Kindle apps for Macs and Apple's new iPad tablet are coming soon.

Amazon is pursuing a dual strategy with Kindle, developing its own line of electronic readers and selling its e-book content through a range of other devices.

Microsoft has lost another key employee to Amazon.com. George Stathakopoulos, a computer security expert who'd been with Microsoft for nearly two decades, took a job at Amazon, Microsoft spokesman Lou Gellos confirmed. Stathakopoulos was general manager of the Trustworthy Computing Group at Microsoft and was front and center in Microsoft's efforts to combat the Conficker worm last year.

Stathakopoulos is part of a growing list of Microsoft veterans who have jumped to Amazon, including, most recently, longtime Windows vice president Mike Nash. Others who have made the leap include Brian Valentine, now senior VP of Amazon’s e-commerce platform; data center guru James Hamilton; and computer security expert Steve Riley. The poaching is part of an evolving rivalry between the two Seattle area tech giants, which are increasingly competing in areas like cloud computing.