When I named Amazon.com
In hindsight, it should have. Platforms matter, and Amazon has created one of the best in the Kindle. Buy your books in either physical or digital form -- Amazon doesn't care. The Kindle ensures that the e-tailer will get a cut of the proceeds.
Or at least, that's how it has been. But poor stewardship may soon knock Amazon and the Kindle from its perch.
The ecosystem that isn't, but needs to be
Digital platforms are changing from vertically integrated value chains, where the systems are entirely controlled by one vendor -- think Apple
Interestingly, Amazon's EC2 is a highly extensible cloud-computing platform. Amazon supplies the tools -- the storage, the processing power, etc. -- and users supply the creativity, like adding water to a plant. Contrast that with the Kindle, a closed, vertically integrated platform that shows no signs of opening up.
Can we ask why, Amazon? Please take a look at some of the more successful names in tech right now, and you'll find a common denominator: Outside developers are adding to their offerings. I'm talking about salesforce.com
Too crowded to be closed
And let's not forget who Amazon is facing. Yesterday's news from Sydney, Australia reported that talks between Apple and Amazon apparently fell apart after the e-tailer apparently demanded 70% of the proceeds generated by a partnership between these two. No details are available, but could you imagine the App Store available on a next-generation Kindle?
I can. Barnes & Noble
Think of Facebook. Though it's not a completely open system -- you can't read my feed unless you are my friend -- Facebook has tools for creating software for its increasingly vast ecosystem. Each one of those applications makes the whole network more valuable. Facebook is the iTunes of social media, but without the attendant costs.
How about a Kindle klatch?
Books are social tools, too. There are bookstores, book clubs, and readings at coffeehouses all around the world. Why isn't the Kindle a more social device? Why isn't a platform that extends beyond Amazon's Seattle headquarters to incorporate third-party software, as the other great digital ecosystems do?
I'm not the only one thinking this way. According to a recent New York Times story, Forrester Research has been surveying consumers to find out what other content besides books they'd like to see on e-readers.
"[Add applications and] all of a sudden you've gone from a device that is great for reading books and maybe newspapers and magazines to something that has a real utility for business people and also for consumers," Forrester analyst Sarah Rotman Epps told the Times in an interview.
Plus, the timing for opening up the Kindle couldn't be better. Amazon's revenue and profits soared in the third quarter, and cash is flowing -- more than $1.9 billion over the prior 12 months. Amazon has the resources to create and sustain a developer network.
The Kindle needs developers to keep it in the lead, Amazon. Go get them before it's too late.
Amazon, Apple, and Netflix are Stock Advisor selections. Microsoft is an Inside Value pick. salesforce.com is a Rule Breakers recommendation. Try any of our Foolish newsletter services free for 30 days.
Fool contributor Tim Beyers had stock and options positions in Apple at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy is gathering kindling for a little rest by the fireplace.
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