Amazon in 2010

The e-tailer puts its money where its mouth is.

Rick Munarriz
Rick Munarriz
Feb 27, 2008 at 12:00AM

I've been darting in and out of 2010 over the past few weeks, taking a glimpse at what some of my favorite companies may look like in the future. Today, I turn my attention to the company that may one day sell me the necessary time machine: (NASDAQ:AMZN).

How does the leading online e-tailer look in 2010? Surprisingly good, my friend. It's still the undisputed champ in moving physical goods via online orders. Growth in digital delivery has propped up margins. The company is also a bigger player in areas like content and merchant services, which seemed like mere specks in the business model back in 2008.

Let's take it piece by piece, since I know this is a lot to go through for someone still stuck in 2008.

The digital revolution
No one profited more from the digitally delivered movement more than Amazon. You saw the seeds planted in 2007. The company's three original media categories -- books, CDs, and DVDs -- were already turning to the wonders of inventory-free Web products. First Unbox beamed films and shows into your computers and TiVo (NASDAQ:TIVO) DVRs. Then MP3 downloads jammed your players with unrestricted music tracks. Finally, the Kindle allowed techie book buffs to curl up with a good electronic read.

But you probably don't know that the Kindle that really brought it all together. Sure, the original Kindle was a clunky gadget, but the updated version that debuted for the 2009 holidays was a beauty. The sleeker, more compact design actually fit in your pocket. The touchscreen keyboard helped save space, without sacrifcing the easy-on-the eyes screen that the millions of Kindle owners use to read books, watch Unbox shows, listen to tunes, stream audiobooks (because even bookworms are on the go sometimes), and read the local morning paper.

Did I mention that it doubles as a smartphone, too? BlackBerry maker Research In Motion (NASDAQ:RIMM) isn't losing any sleep, because Amazon's demographics actually widened the market. Everyone saw it coming, since even the original had wireless functionality.     

Yes, the Kindle really did change the world. In early 2008, you're just reading books, national newspapers and publications, and coping with limited Web-surfing features on those funny-looking Kindles. Just wait, because even Apple (NASDAQ:AAPL) is envious of the stylish looks and catchall breadth of the 2010 Kindle.

By 2010, even struggling local newspapers will have a big enough audience of area Kindle users to cash in on digital delivery. Who would've thought of Amazon as an old-school savior?

Good old-fashioned retail
Amazon is still selling tangible stuff. The growing popularity of its Prime membership program has a larger base of shoppers, refreshingly tethered to the company's online store when it comes to everything from buying new shoes to ordering more K-cup coffeemaker refills.

Amazon is even gradually expanding the AmazonFresh grocery-delivery service it tested in the summer of 2007, but only in select markets where it already has a physical warehousing presence. Amazon won't be repeating Webvan's mistakes.

Enabling the cottage industries
Amazon has also expanded its pool of third-party merchants. Sensing cracks in eBay's (NASDAQ:EBAY) armor after Meg Whitman left to pursue political aspirations -- yes, you can call her Sen. Whitman in the future -- Amazon went after the disgruntled eBay Power Sellers.

Amazon simplified its merchant services, throwing a wider net along the process. Amazon's online transactional service is no PayPal, but it's actually grown to become a viral hit (thanks in part to the 2% discount that Amazon is giving all of its Prime members who use its pay platform through the end of 2010).

Amazon was always a friend of the techies with its Web-development offerings, but it truly has become a marketplace enabler for merchants big and small by 2010.

Sellers aren't the only ones carving out livings through Amazon. Remember things like the pending purchase of Audible (NASDAQ:ADBL), and its liberal submission policies to populate its Kindle bookstore with digital content? Amazon went on to lend an even bigger hand to creative artisans on the Unbox and MP3 side, allowing aspiring filmmakers and garage bands to make a little coin in the pursuit of wider acclaim.

Amazon's isn't just gladly taking your money in 2010. Unless you're not thinking straight, Amazon is also offering you ways to make money through its digitally fulfilled prowess.

Content is king
One last thing about the Amazon of the future: It's been able to astutely monetize its Web properties. Askville and the oft-delayed Questville are lively communities, rivaling what Yahoo! (NASDAQ:YHOO) once had with Yahoo! Answers.

Popular sites that Amazon owned, like Alexa and IMDB -- where many of its users may not even be aware of the Amazon connection -- are better-integrated into the money-making revenue channels available through The company even succeeded in bringing A9 back from the virtual dead.

In the end, Amazon proved its bulls correct. The accelerating growth trend may have come to a halt in early 2008, but Amazon is still chomping down on retail market share at the expense of real-world merchants.

If you don't see it that way, scour Amazon for the time machine to prove me wrong. In time, you'll see it listed. In time, you'll see I was right.

Rick's other unauthorized and completely fictional treks into 2010 in recent weeks: