Amazon has struck a deal with Paramount Pictures that will see hundreds of flicks being added to its Prime Instant Video subscription service.

The licensing agreement will bring movies like Forrest Gump, Mission: Impossible 3, Top Gun, The Italian Job, Braveheart and Clueless to Prime customers in the United States over the next three years, the company said in a statement.

Prime Instant Video lets customers watch more than 17,000 movies and TV episodes on their Kindle Fire or any device connected to Amazon Instant Video, including Sony’s PlayStation 3.

Unlike the ‘regular’ Amazon Instant Video offering, the special Prime subscription allows customers to stream as many videos as they like at no additional cost.

Earlier this year, Amazon inked deals with Discovery and Viacom. It also boasts licensing agreements with PBS and Disney-ABC Television Group.

With over $110 billion in cash, the Cupertino giant could theoretically buy three major rivals and still have change left to go shopping for a new handbag or two.

We know that’s not how it actually works, but it helps to put the size of Apple’s gargantuan amount of cash into some perspective.

Apple could (again, theoretically) pick up all of Amazon, Nokia and Research In Motion with its mountain of cash, looking at current market capitalizations.

Amazon.com = market cap of $86.6 billion
Nokia = market cap of $13.59 billion
Research In Motion = market cap of $6.85 billion

That totals roughly $107 billion, still $3 billion short of the cash Apple currently has on hand (its market cap is roughly $522 billion). How mind-blowing is that?

Wait a few days, and maybe they’ll be able to bail out Netflix while they’re at it, too.

Also read:

Apple announces dividend plans and $10 billion share buyback, will spend $45 billion in three years

Apple’s lesson: Domestic cash is nimble, foreign cash is expensive

I don’t want you to get the wrong idea, not every service on the web is an acquisition target, nor does every company even want to be acquired. However, there comes a time in a product’s life where there is only a few ways it can go. This means that the accelerated growth something is seeing is bound to flatten out at some point.

Pinterest is one of those services that has picked up serious steam and has everyone wondering when the other shoe is going to drop. In this case, the “other shoe” is some type of business model or acquisition. We already know the target demographic for Pinterest, and no matter what features that the site adds, that demographic isn’t likely to change.

I’m not talking about the majority of users being women, I’m talking about people who like to “pin” things that they wish they could own. Notice, I didn’t say “buy”, because not everything on Pinterest is a link to an order now page. However, we do know that Pinterest users like to buy things, and that makes it an affiliate network dream. In fact, Pinterest was making money for a while by adding affiliate codes to all of your posted items.

The company has since stopped that, mostly because it never told the community that it was doing it in the first place. There’s something to be said for transparency, and if a company is completely open about what it does, users probably won’t care and continue about their business.

Pinterest is a business model

The fact that Pinterest was actually making a few bucks proves out the model that it could become a social affiliate network. Most users don’t know what an affiliate network means, or that they could be making money by adding an affiliate link with all of the items that they pin. If Pinterest made the process simple, it would be massive for its users and for e-commerce sites.

One of the sites that could make use of a network like Pinterest is Amazon. Think of Pinterest as a huge “wish list” site that allows you to beautifully organize all of the things that catch your eye as you surf the web. Amazon could turn that into big money for themselves, its sellers, and for the users of Pinterest. All it would take is making the on boarding experience dead-simple for becoming an affiliate.

Why not remove the word “affiliate” out of the process entirely. What if they just called it “Pinterest”? Yes, if Amazon were to purchase the social pinning site, it could sign users up automatically for an affiliate account and when those users share things on their pinboards from Amazon, they could magically make a few bucks.

Affiliate networks aren’t entirely mainstream and are mostly set up for bloggers, other independent publishers, or marketers. However, these Pinterest users are generating more views, and more clicks, than most of these independent publishers. Imagine being paid a buck every single time one of the things you post to Facebook hits 100 likes? That would be pretty awesome, and I doubt that the user base would complain. It’s marketing at its finest, and everyone wins in the end.

If you’ve seen some of the activity from top users on Pinterest, there’s no doubt about it that they spend a good amount of time nicely sorting all of the things that they share. In fact, Pinterest users do a better job at e-commerce than Amazon does. On Amazon.com you have three options to find things; open search, category browsing, or recommendations. The recommendation technology that Amazon has built is pretty impressive and is clearly helping drive sales on the site.

Crowdsourcing the shopping experience

Imagine if Amazon could basically out-source their categorization, turning all of its products into objects that “editors” could neatly group together in ways that make sense to them and the people who follow them. It’s a mix of e-commerce and Wikipedia, and that site is none other than Pinterest.

I’m sure that Pinterest is thinking of other ways to make money, including creating its own affiliate network, but that’s a lot of heavy lifting that takes them away from focusing on building out the user base and keeping it as social as possible.

Much the way Amazon left Zappos intact after acquiring it, allowing the company to continue to focus on superb customer service, Amazon could let Pinterest innovate on new ways to drive people to the checkout page socially. The concept of “Wishlists” are boring, because people set them up for themselves and share them in hopes that other people will be that item for them. That doesn’t drive sales.

Pinterest users on the other hand set up lists, or boards, of things that oddly fit together and appeal to small subsets of people. Could you imagine a 1-click buy button for an entire board of stuff? I bet Amazon can.

I don’t know what something like Pinterest is worth, and I wouldn’t have thought that Instagram was worth 1 billion dollars already, so the beauty, and price, is in the eye of the potential beholder. What I do know is that Amazon needs to stay on the cutting edge of e-commerce, and Pinterest fits that bill.

If the massive Seattle company could turn millions of users into “affiliate marketers’ overnight, don’t you think they would? Pinterest is a bridge to that, and social sharing could turn into some nice pocket change for its users. Amazon could even give out its own currency that could be spent on items on its site as an incentive to focus on sharing items you find on its site.

According to a regulatory filing that surfaced earlier this morning, Amazon.com founder and chief executive officer Jeff Bezos again requested not to receive additional compensation in 2011 due to his “substantial ownership” in the company.

For the record, Bezos’ stock ownership is approximately 19 percent, Amazon.com says.

Last year, Bezos received $1.68 million in total compensation, which is exactly the same amount he received in 2010, according to the SEC filing (via the WSJ).

(Bonus link: Amazon.com’s annual letter to shareholders)

Bezos’ annual base salary was $81,800, but other compensation (to cover security and travel related costs) brings the total to just south of $1.7 million. Remarkably, his base salary hasn’t increased since 1998, a year after Amazon.com went public.

Although Bezos has been chairman of Amazon.com’s board since he founded the company in 1994, he doesn’t receive any compensation for his services as a company director in addition to his compensation as CEO.

Furthermore, Bezos has never received any stock-based compensation from Amazon.com.

The relatively low solary makes Bezos one of the lowest-paid CEOs at a major public company, but he has billions of dollars ‘on paper’ to wipe his tears with.

On a sidenote: Forbes just named Bezos the best CEO in America, and TIME magazine counts him among the most influential people in the world.

According to the SEC filing, the annual base salaries of other senior execs such as CFO Thomas Szkutak and SVP, International Consumer Business, Diego Piacentini, have also remained unchanged ($160,000 and $175,000, respectively).

Jeffrey A. Wilke, Amazon.com’s SVP, Consumer Business, did see his base salary increase by $5,000 in 2011, from $160,000 to $165,000.

The online retail and cloud computing giant will release its first-quarter 2012 financial results on April 26, and we’ll examine them closely when they hit.

Also read:

Is Amazon planning its next movie-streaming move?

Amazon’s Jeff Bezos relaunches Blue Origin website for private spaceflight

Amazon tipped to launch three new Kindle tablets in 2012

Who is the next great leader in technology?

Amazon.com subsidiary Amazon Web Services this morning unveiled a new product called CloudSearch, which basically lets clients integrate scalable search functionality into their websites and applications and ‘pay as they go’.

CloudSearch uses the same technology that makes searching on Amazon.com as fast as it is, and the new cloud-based managed search service costs a mere $0.12 per hour (or less than $100 per month) for basic usage. More on pricing below.

Amazon CTO Werner Vogels (who will be speaking at The Next Web Conference in two weeks) blogged about the new service here, and you can find the CloudSearch APIs documentation here. Bonus: demo video embedded below.

Basically, CloudSearch lets developers create a search domain, upload the data they want indexed, and the new service will then automatically provision the AWS technology resources required for search functionality.

Customers can upload data either through the AWS console, from command-line tools or by sending their own HTTP POST requests to the upload endpoint.

When more data becomes searchable, or query rates change, CloudSearch will automatically scale in real time, while customers also have the ability to modify parameters, finetune search relevance and apply new settings at any time, without having to upload the data again.

And, no need for devs to write their own indexing, query parsing, processing, results handling and whatnot.

Amazon also boasts that developers can thus have a scalable search system up and running in less than an hour at a minimal cost, taking advantage of “many years of Amazon R&D in the search space”.

Indeed, CloudSearch was developed by A9, the Amazon.com subsidiary that focuses on search technologies.

To learn more, the best place to start is AWS Evangelist Jeff Barr’s blog post.

Customers get billed based on the number of running search instances, which come at three sizes (Small, Large, and Extra Large) at prices ranging from $0.12 to $0.68 per hour. There’s also a “modest charge” for each batch of uploaded data ($0.98 for each GB of data in the search domain).

A number of AWS customers are already using CloudSearch, Amazon says. Some examples are Smugmug, which is using the new service to let users search over a billion photos on its website, and ex.fm, which is using CloudSearch to power its social music discovery website.

As just announced by Bloomberg on Twitter, the United States Department of Justice (DoJ) is proceeding with lawsuits against Apple and five major publishers – Hachette, HarperCollins, Macmillan, Simon & Schuster and Penguin – over alleged e-book price fixing, as Reuters predicted would happen today.

Update: Three publishers have reportedly settled already.

Yesterday, Reuters reported that the DoJ was poised to file an antitrust suit against Apple and the publishers after spending about two years investigating whether they are guilty of fixing prices of digital books for mutual benefit.

Specifically, the DoJ has been investigating whether Apple’s deals with the publishers when it launched the iPad in 2010 amount to price-rigging.

In an interview with biographer Walter Isaacson, the late Apple co-founder Steve Jobs said the company would switch to an “agency model”, which would mean publishers and not retailers get to set book prices, in large part to prevent competitors like Amazon and Barnes and Noble from selling them at a lower price.

The opposite of this is a “wholesale model”, which is what the United States government would prefer to have in place.

According to Jobs (as quoted by Isaacson in the book ‘Steve Jobs’):

“We told the publishers, ‘We’ll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway’.”

“They went to Amazon and said, ‘You’re going to sign an agency contract or we’re not going to give you the books’.”

Needless to say, this suit can have a major impact on the digital publishing industry as a whole, and prices of ebooks in particular.

The U.S. government reportedly hoped to reach settlements with at least some of the publishers, but that’s not what appears to have happened so far.

When you visit Amazon’s homepage, you’ve more than likely seen the recommended items that the company suggests you check out. It’s a really great way to get people into the mood of shopping when they might have just come to browse a bit.

Sometimes I visit Amazon with an intent to buy something and have no idea of what I want to get, and that’s why its recommendation technology is so powerful. What if someone could control the things that pop up under Amazon’s recommendations? It would be a pretty powerful, and profitable, trick wouldn’t it? One guy has figured out how to do just that simply by having you visit a page first.

In a post titled “I can manipulate your amazon.com recommendations” Felix Middendorf discusses exactly how he goes about having Amazon recommend things to you by his choosing, and here’s how you can test his methods:

1. Open this page.
2. Visit amazon.com.
3. Observe Dale Carnegie’s classic “How to win friends and influence people” appear on your personalized amazon.com homepage (see screenshot below for comparison).
4. Order it if you are interested, it is a great read (optional step ;-) )!

I tried it and yep, it worked:

Middendorf explains exactly how he did it:

The page contains a hidden iframe that triggers an HTTP GET request to the book’s page on amazon.com. Now amazon thinks you are interested in this article and recommends it and similar ones to you on their homepage. I would like to leave possible malicious applications to your imagination.

How to fix this? If the X-Frame-Options response header is set to SAMEORIGIN, modern browsers will not allow third party websites to include a page. Interestingly, the German amazon website amazon.de does this.

I have informed amazon.com of this issue via Twitter and E-Mail.

While it’s good that he reached out to Amazon about the issue, the fact that your recommended list is so easily manipulated is pretty scary. Anyone on the web who wants to put a specific item in front of you to buy can easily do this.

Have you ever seen something recommended to you on Amazon that made absolutely no sense? This might be why.

A subsidiary of Acacia Research Corporation, easily one of the world’s most annoying patent trolls, has managed to force Amazon.com into settling a pending patent lawsuit.

The subsidiary, Adjustacam LLC, originally filed suit against dozens of retailers in July 2010, including Amazon, Dell, Wal-Mart, Newegg.com, Eastman Kodak, Target, Sears, Overstock.com and Radioshack.

Last week, Acacia announced that it had reached a settlement agreement with other defendants in the case, namely CompUSA.com, Systemax and Tiger Direct.

Late last year, it also settled with Creative Technology and Creative Labs.

The main difference between that settlement and the deal with Amazon, based on the wording of the short press releases, is that Amazon isn’t said to have entered a licensing agreement with the Acacia subsidiary per se.

Terms of the Amazon settlement agreement were, however, not disclosed.

Sifting through patent lawsuit documents bores me to tears, except when it doesn’t.

Take this one, for example. A company called OIP Technologies (warning, state-of-the-art website), which has only one patent in the United States that I can find, has recently filed suit against e-commerce juggernaut Amazon.com.

The patent-in-suit is US patent 7970713, entitled “Method and apparatus for automatic pricing in electronic commerce”, and covers automatic pricing mechanisms that use live price testing for determining demand for products in an online commerce environment.

The patent application was originally filed back in May 2000 but was only issued over a decade later, more specifically in June 2011.

What’s interesting about the lawsuit, however, isn’t the patent but the backstory.

In short, OIP Technologies claims Amazon.com made a whole lot of moolah over the years, aided by technology the plaintiff sought to patent more than 10 years ago (with Amazon’s full knowledge, even).

The firm claims Amazon went to great lengths to learn about its automated pricing technology, even going as far as to stage acquisition talks and grill two of their engineers during supposed job interviews (some of which were even conducted directly by Amazon founder Jeff Bezos).

According to the lawsuit documents, Andrew Atherton and Vladimir Gorelik founded a company in Silicon Valley back in 1999 that sold price optimization software to e-commerce companies in search for more revenues.

Originally called Resonant Commerce, it was renamed as Optivo Corporation in January 2000.

Atherton and Gorelik claim Amazon ran a trial of its solution in the Summer of 2001, under NDA and with “demonstrated success”. The e-commerce giant then allegedly kicked off discussions of a potential acquisition of Optivo at, among other places, its corporate headquarters in Seattle.

In one of those meetings, Optivo reported that Amazon.com could increase its total contribution margin by $100 million by 2002.

A buy-out deal never materialized, however, and according to the lawsuit documents Amazon went on to try and poach away at least two Optivo engineers, asking detailed technical questions about its technology in interviews directly with Bezos and former Amazon CIO and SVP Rick Dalzell.

The firm is basically trying to prove that Amazon realized full well not only the value of Optivo’s technology was at the time but also that it was patent-pending.

Since then, OIP Technologies claims, Amazon.com has “employed the technology claimed in the ’713 patent as part of its business strategy to increase profits”.

The lawsuit, which seeks damages, was filed earlier this week.

You can find the documents embedded below:

Complaint (18)

Amazon this morning announced that it has reached a content distribution agreement with Discovery Communications that will allow Amazon Prime members to instantly stream prior seasons of series from Discovery Channel, Animal Planet, Science and more from the company’s 25-year programming library.

Among the new programs included in the agreement with Discovery are Dirty Jobs and Animal Planet’s Whale Wars, in addition to a bunch of other titles.

The new content will be made available on Prime Instant Video, a digital video streaming and download subscription service from Amazon Instant Video (formerly known as ‘Unbox’) that launched in 2011 and aims to rival Netflix in the US.

The Prime service costs $79 a year and offers other benefits, such as two-day shipping for items bought on Amazon.com.

Since the debut of Prime Instant Video in February 2011, Amazon says it been able to grow its instant streaming catalog to 17,000 titles today (up from 15,000 last month), in addition to the more than 120,000 titles that are offered to all customers for purchase or rent on Amazon Instant Video.

The company had already managed to strike content licensing deals with Viacom, Disney-ABC Television Group, PBS and News Corp.

However, a recent Bloomberg report suggested that Amazon hasn’t convinced a lot of people to become Prime members so far.