TechFlash: Seattle's Technology News

Paul Misener, Amazon’s VP for global public policy

Amazon wants Congress to avoid exempting too many small retailers from a proposed federal online sales tax law that would authorize states to require retailers to collect sales taxes on goods sold online.

Meanwhile, eBay, which relies heavily on small businesses on its auction site, has a message of its own for Congress: "Protect small retailers who are already falling behind."

In prepared remarks for testimony Wednesday before the U.S. House Judiciary Committee, Paul Misener, Amazon’s VP for global public policy, said a national sales tax law would level the playing field among online retailers and also help cash-strapped states collect more revenue.

But Misener is urging Congress not to exempt too many small retailers from tax collection:

West 8th (Pacific Real Estate Partners image)

Amazon.com has wolfed down another large chunk of prime downtown Seattle office space. The fast-growing online retailer is taking space on floors 7 through 10 and on floors 15 through 24 in the West 8th office tower at 2001 8th Avenue in downtown Seattle. That's according to permits filed earlier Tuesday requesting approval for interior alterations.

The new lease would consume most of the available space in the 28-story office building, which was built in 2009 by Seattle-based Touchstone Corp.

According to its listing on OfficeSpace.com, the 498,893-square-foot office tower has a vacancy rate of just over 69 percent, with 345,098 square feet of space available on floors 7 through 25.

Kindle Fire has been a hot seller this holiday shopping season. But the Amazon tablet has raised privacy concerns.

In a move to address privacy concerns, Amazon said its new “Silk” browser for the Kindle Fire tablet will temporarily log web addresses of users, but will not link the addresses with a customer’s identity.

In a letter to a U.S. Congressman concerned about privacy, Amazon defended its privacy procedures, saying Silk will “only aggregate browsing activity across all users. It will not link browsing activity to individual customers’ browsing habits.”

But the Congressman -- Rep. Ed Markey (D-MA) -- said he is not convinced, primarily because he said Amazon has not provided him with enough detail about how the company intends to use customer information the company collects.

“Amazon is collecting a massive amount of information about Kindle Fire users, and it has a responsibility to be transparent with its customers,” Markey said in a statement Tuesday. “I plan to follow-up with the company for additional answers on this issue.”

It's been a banner week for online retailers.

Following blockbuster Black Friday sales, online retailers saw a surge in sales yesterday as shoppers raced to snap up Cyber Monday deals on electronics, video games and other items.

Cyber Monday sales were up 33 percent over 2010, with consumers spending an average of $198.26 per order, according to a new report from IBM. The report also found that Cyber Monday sales beat out Black Friday sales, with online sales up 29.3 percent yesterday over the $816 million consumers spent the day after Thanksgiving.

Federal officials said they launched a Cyber Monday crackdown, seizing the domain names of 150 websites that sold and distributed counterfeit goods and copyrighted work.

The domains, which were not identified, are in the custody of the U.S. government. Visitors to the sites will now find a banner saying the domain name was seized by authorities, and that willful copyright infringement is a federal crime, said the U.S. Department of Justice, which announced the actions.

So-called "Cyber Monday" is the first Monday after the Thanksgiving holiday weekend, when shoppers surf the Web for online discounts. According to a report by CNNMoney, sales are projected to hit a record $1.2 billion this year.

As part of the crackdown on illegal goods, undercover federal agents bought professional sports jerseys, golf equipment, DVD sets, footwear, handbags and sunglasses, said the Justice Department.

BUSINESS JOURNAL PHOTO | Stephen Brashear

Mike McSherry of Swype, center, accepts the TechFlash Innovation of the Year award for 2010, last December at EMP.

In case you forgot to mark your calendars, this is the week we’ll present our annual Newsmaker awards, the Flashies – and today is the final day to vote.

While the awards are tech-focused, don’t think of this as an event just for geeks. On the contrary, the list of nominees include “everyday” companies such as Alaska Airlines (NYSE: ALK), Group Health Cooperative, Paccar (NYSE: PCAR), AT&T (NYSE: T), and T-Mobile (OK, those last two are a little techie).

The third annual Flashies will highlight fascinating new innovations, including an online game that was adapted to help solve an AIDS-research mystery. We also will honor whiz-kid teenagers who are building robots and doing graduate-level research at MIT.

Zynga photo

Zynga founder and CEO Mark Pincus (left) and Neil Roseman, Zynga’s vice president of engineering, in Seattle in April

When Zynga founder and CEO Mark Pincus made an appearance at the game company’s new office in Seattle’s Pioneer Square in April, he made the bold statement that his goal was to become as successful as Amazon in the online game business.

To get there, Pincus has created a hard-driving culture, one that appears to be wearing thin on the fast-growing company’s engineers and other workers.

In a inside look at the company famous for its FarmVille and CityVille online games, The New York Times says that under Pincus, Zynga workers are putting in long hours under heavy scrutiny. Managers “relentlessly track progress,” and those who can’t keep up with the pace face demotions or dismissals, according to the Times.

Among the tidbits in the Times article is how Zynga may have lost out in its attempts to buy Seattle’s PopCap Games. Zynga offered $950 million in cash for PopCap. But, according to the Times, PopCap’s founders were concerned about Zynga’s reputation, including the company’s internal competition and Zynga’s move to rescind awards of shares to workers.

Related TechFlash coverage: Black Friday a banner day for Amazon, other online retailers

Kindle Fire

Sales of Amazon.com’s Kindle tablet devices this Black Friday jumped four times over last year’s Black Friday, and the $199 Kindle Fire remains Amazon’s hottest-selling product.

Amazon said Monday that the Kindle Fire was Target’s biggest-selling tablet on Black Friday, a day when shoppers spent $11.4 billion at retail stores, which is $1 billion more than a year earlier, according to The Associated Press.

The Friday after Thanksgiving has been seen as the kickoff of the holiday shopping season. And this year, retailers like Best Buy and Wal-Mart sought to get a jump on the competition -- especially online rivals like Amazon.com -- by kicking the doors open early and even promoting Thanksgiving as a prime shopping day.

But it turns out shoppers are increasingly deciding to avoid the mall traffic and do their shopping with a click and a credit card number.

Online shoppers spent $816 million on Black Friday, the traditionally hot holiday shopping day after Thanksgiving. According to comScore, that was a 26 percent increase over Black Friday in 2010. Thanksgiving Day (Nov. 24), which has traditionally been a lighter day for online holiday spending, saw online shoppers spend $479 million, a 15 percent increase over a year ago.

In comparison, shoppers spent $11.4 billion at retail stores on Black Friday, which was $1 billion more than in 2010.

Overall, for the month of November, e-commerce spending reached $12.7 billion, a 15 percent increase over a year ago.

The South Lake Union Cactus is by far the most modern of the group's four restaurants and doing big business on the Amazon.com campus. (Photo/Geoffrey Smith)

A new Cactus restaurant has joined the Amazon-fueled feeding frenzy in Seattle’s South Lake Union neighborhood, with predictable results.

"We’re crazy busy right out of the gate," owner Bret Chatalas said.

Talk about location. Cactus, which opened Nov. 12, is in one of Amazon’s headquarters buildings, next to the historic Terry Avenue Building that houses three Tom Douglas restaurants.

Amazon doesn’t disclose the number of employees on its headquarters campus. But it currently occupies 1.4 million square feet of office space in South Lake Union, has leased at least another 700,000 square feet nearby and has a 330,000-square-foot building in the works with Vulcan Real Estate .

Penguin Group is once again allowing its e-books to be available for lending from libraries through Amazon’s Kindle.

Penguin Group, one of the nation’s largest publishers, had earlier curtailed making electronic editions of its new books available to libraries. The publishing house also had prohibited libraries from loaning any Penguin e-books to Kindle users.

Penguin has been uneasy with the lending program, worried that it could cut into book sales.

In April, Amazon partnered with e-book distributor OverDrive to a launch a program that will let library patrons check out books on Kindle.

Amazon.com will sell 12 million Kindle Fire tablets and snag 15 percent of the tablet market in 2012, according to Citi analyst Mark Mahaney.

The iPad is on track to account for 73.4 percent of worldwide tablet sales in 2011, but no other tablet has been able to grab more than 5 percent of the tablet market since its debut in 2010.

The MSNBC Digital Network, which includes MSNBC.com’s operations in Redmond and New York, racked up more than 161.7 million video streams during the month of October.

Some of the stories with the greatest number of hits included the Amanda Knox verdict, coverage of Michele Bachmann’s presidential campaign and the capture of Moammar Gadhafi. The data, compiled by comScore, found that MSNBC’s web operation generated more clicks than second-place CNN, which had 123.6 million views.

Kindle Fire

Amazon.com is reportedly working on two larger versions of its 7-inch Kindle Fire tablet, according to a report from Asia this week.

The Digitimes industry magazine cited unnamed suppliers that said Amazon is working on 8.9- and 10.1-inch models.

“Amazon is developing 8.9- and 10.1-inch next-generation Kindle Fire models and has selected an 8.9-inch model for launch by the end of the second quarter of 2012,” Digitimes reported.

Corrected version

Amazon.com is finding out how unpopular its lending program for public libraries is with publishers.

Penguin Group, one of the nation’s largest publishers, has curtailed making electronic editions of its new books available to libraries. And the publishing house also is prohibiting libraries from loaning any Penguin e-books for Kindle users.

“We have always placed a high value on the role that libraries can play in connecting our authors with our readers,” the publisher announced in a statement. “However, due to new concerns about the security of our digital editions, we find it necessary to delay the availability of our new titles in the digital format while we resolve these concerns with our business partners.”