Because they still make smart moves that can only be expected from a start-up, even though they are huge. And they are agile risk-takers too.

Take a look at what products/services they are rolling out and you will get what I see. Just recently, they put the latest feature into amazonmp3, with DRM-free music and they didn’t stop there. As a global citizen who love to listen US music but fail to buy them as a result of residing in Turkey, I was not an eligible customer for iTunes. Amazon may have located some other customers here and there, and they announced plans to globalize the mp3 sales. Huge move. Until now, I was a loyal buyer of books, DVDs and Blu-Rays from Amazon.com. It looks like mp3 will add to them.

The second move is a more recent one; one that I heard from TechCrunch’s following post. Product Ads. Amazon’s marketplace has been phenomenal in providing long-tail items that Amazon couldn’t provide itself. With Product Ads, Amazon is letting anyone -yes it includes individuals like me also- display ads in relevant product pages. Basically, you can use Amazon’s search box to search products, and the results will cover a retail space pretty much larger than Amazon’s and its merchants’ servers. As TechCrunch clearly underlined, this is a feature seriously overlooked by Google -try searching for a specific product in Google’s landing page.

Are these features groundshaking? I wouldn’t go that far. But Amazon’s solid strategy work behind them makes me envy their team. Choose two of the hottest Silicon Valley companies as your targets. Thoroughly analyze their strengths, weaknesses and the features they overlook. Combine the opportunities rising from that analysis with your company’s core competences and the resulting moves will be what Amazon brought to market with Product Ads and amazonmp3.

Almost one year ago, I read a great book on innovation and expansion strategy: Blue Ocean Strategy. Looking at Amazon’s moves, I remembered the main framework to reveal and design innovations: the competitor/s is/are analyzed with respect to each and every parameter that customers find significant. Let’s say for mp3 business, a brief list of these parameters would include: price, geographical coverage, depth of collections, interface convenience, moving-to-device easiness etc. Clearly, Amazon created a competence on geographical coverage while bringing convenience to its users with a small software that ensures easy delivery of amazonmp3 downloads directly to iTunes.

What makes me believe Amazon will be successful in its endeavors is that their experience in e-retailing taught them the way to operate in a razor-thin-margin environment. With their entry into Product Ads and DRM-free mp3, they can disrupt both markets and create some trouble times for Google and Apple. To mark this statement, I am attaching a Yahoo widget to track Amazon.com’s share price. It is currently 73.50$, and Google is at 517$. Apple is at 125.5$.