Lady Gaga Kills Amazon.com

Amazon.com (Nasdaq: AMZN  ) is taking on more than its servers can chew today.

The leading online retailer is selling copies of Lady Gaga's brand new Born This Way CD for a mere $0.99 today, a fraction of the $11.99 that larger rival Apple (Nasdaq: AAPL  ) is asking for through iTunes.

Amazon's timing for the deeply discounted digital album couldn't be better. Lady Gaga recently became the first Twitter user to surpass 10 million followers. She also is coming off a multi-faceted performance during this weekend's Saturday Night Live season finale.

This promotion also comes just weeks after Amazon launched its new digital music locker service, and a single MP3 album purchase ups the storage capacity from 5 gigs to a full 20 gigabytes.

Unfortunately, Amazon's cloud is bursting under pressure.

Amazon's product page for the 14-track digital CD and booklet is filling up with customer complaints. The most popular problem is that of partial downloads, something that is likely the result of orders hammering Amazon's platform. This is an embarrassing development for the e-tailer, especially since it markets the uptime of its cloud services to enterprises.

It's not just online retailers that are hoping to milk some marketing magic off Lady Gaga's latest release. Best Buy (NYSE: BBY  ) is selling the physical CD for a mere $7.99, and giving it away to new mobile customers inking two-year contracts. Zynga made a splash with a Lady Gaga social gaming promotion this month.

Amazon better make a quick recovery here, since it's obviously willing to take a big financial hit in offering the MP3 album at $0.99. Ideally, this would have been -- and could very well still be -- a great way to reach out to iTunes loyalists and music fans that aren't familiar with its growing digital media storefront.

A first impression like this, though, isn't going to help the prospects of both its media store and its cloud-based streaming service. There's a fine line between Born This Way and died this way.

Have you downloaded Lady Gaga through Amazon.com today? Share your thoughts in the comment box at the bottom of this queue.

The Motley Fool owns shares of Apple and Best Buy. Motley Fool newsletter services have recommended buying shares of Amazon.com, Best Buy, and Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Longtime Fool contributor Rick Munarriz has made a few purchases through Amazon's digital music store in the past. He does not own shares in any of the stocks in this story. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


Read/Post Comments (10) | Recommend This Article (14)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 23, 2011, at 9:30 PM, xmmj wrote:

    You also get a free Cloud upgrade to 20GB. Of course this will expire in 1 year. The proverbial foot-in-the door - and a long arm palm up as well. :)

  • Report this Comment On May 23, 2011, at 11:23 PM, TMFBreakerRick wrote:

    xmmj, absolutely. I pointed out the 20 gig cloud upgrade in the fourth paragraph. It is an interesting ploy on Amazon's behalf -- and at least now the product page is warning about the problem and assuring everyone that they'll get their Gaga fix.

  • Report this Comment On May 24, 2011, at 4:38 AM, Henry3Dogg wrote:

    This is blind panic

    Their music locker is no more than you have long been able to do with MobileMe, and now Apple are clearly about to change the roles again.

  • Report this Comment On May 24, 2011, at 12:03 PM, DCJayJ wrote:

    This seems strange: I can't find a link to buy "Born This Way CD for a mere $0.99" on amazon.com. Have any readers or staff at The Motley Fool attempted to make the purchase or researched its availability? If anyone can find it would you provide the link or at least say that it is truly there? Cheers!

  • Report this Comment On May 24, 2011, at 3:43 PM, DCJayJ wrote:

    The link in the article leads to a product selling for $6.99 NOT $0.99. I can't believe it's already 15:42 ET and this article hasn't been corrected.

  • Report this Comment On May 24, 2011, at 3:51 PM, DCJayJ wrote:

    OK. I guess I'm a day late and the album was sold for $0.99 YESTERDAY, 23 May 2011. I'd pay a buck for the 20 GM Cloud Player space (even if for just a year), but not $6.99 for it by getting a Lady Gaga Album. I don't like her music one bit. Cheers!

  • Report this Comment On May 24, 2011, at 3:57 PM, jiriki19 wrote:

    You can get the 20GB of storage space for buying ANY album digitally between now and the end of the year.

  • Report this Comment On May 25, 2011, at 2:13 PM, Foosballking wrote:

    Lady GaGa...really...the latest in a LOOOONG line of mental midgets foisted on society. A mouthy jerk on top of it...

  • Report this Comment On May 25, 2011, at 3:58 PM, WhiteHatBobby wrote:

    Stefani Germanotta would have been gonged on the Gong Show. This album is an insult to the people, considering she was able to ram down the agenda of sexual deviants and this album pushes it.

    Amazon did a number on a download I did for studying a piece I was to sing with friends as part of a choral project, and I cannot trust the quality.

  • Report this Comment On May 26, 2011, at 10:37 AM, TMFBreakerRick wrote:

    DCJayJ, yep -- the promo was only good for the release date (as noted in the article), though $6.99 is still less than Apple's iTunes price.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1498341, ~/Articles/ArticleHandler.aspx, 10/22/2014 6:42:01 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement