Written by Alex Iskold and edited by Richard MacManus
Lately Amazon has been
introducing a raft of 'web 2.0' features to its e-commerce website. In this post we
explore how Amazon has implemented tagging, Ajax, blogs and wikis - and ask whether it's
made much difference to the user experience, and to the bottom line. In previous posts,
we've discussed Amazon's bold and visionary Web Services Strategy -
which is creating many success
stories. But this post is not about Amazon's new business, it is about the
continuous innovation of their core e-commerce business.
Amazon continues to refine its web site and roll out gems that no one else has. In our post on recommendation engines, we discussed how it combines sophisticated personal, social and item-based recommendation technologies to drive the user to transaction. Here is a stacked view of some of the features we now see on Amazon.com:
But these are just some of Amazon's recent innovations, many others are popping up. In this post we're going to explore some more new features that we've found.
We are still in the midst of the social bookmarking and tagging revolution - at least based on the numbers that came up in our analysis of trends using Technorati and Seth Godin's list. But when people talk about tagging we think del.icio.us and Flickr, not Amazon. Well, Amazon rolled out a tagging strategy last year and it is now working very well. Each Amazon product can now be tagged by users and a set of tags is then shown on the product pages. Here are the tags for the Dream Girls soundtrack:
Its worth noting that there are quite a lot of tags, even though the product is recent. This implies that customers are enthusiastic about tagging products.
What is Amazon going to do with all these tags? Well, to start with it already offers a search for product by tag, which is a nice feature not available on most other large ecommerce sites. But I suspect there is much more that will be done soon with Amazon tags. It is only the matter of time before we see Find similar items by tag. Here is why.... today on Amazon, if you are looking at a book, you get recommendations for similar books by content. This is an item-based recommendation - different from 'Customer who bought X also bought Y', which is a social recommendation.
Amazon's infrastructure analyses and categorizes huge volumes of text on a daily basis. The output of these algorithms is a list of key phrases that uniquely identify any item (e.g. a book). In my recent post about recommendation engines, I suggested that these key phrases can be substituted by people's tags. It looks like Amazon will soon be in position to do just that. What this means is that Amazon is going to be able to do item-based recommendations for all its products, without having to analyze music, movies and houseware in the same way. This will be another big win for Amazon and a big competitive edge, since no other retailers have this.
But tags are only one of the "web 2.0" inspirations for Amazon. The Ajaxification of Amazon is also taking place. Amazon is one of the oldest retail sites online, known for its strong brand and user interface. Making drastic changes to the site is difficult, and Amazon has always been very careful in that area. However, recently we have seen more and more features that utilize Ajax. For example, 'Today's recommendations' uses Ajax and tags in a very effective way:
Other parts of the site are also getting more Ajaxy, moving away from the click-to-reload paradigm. My only wish here is that Amazon implements Netflix-like previews of items, which would save a lot of time for user.
So Amazon has gotten tags and Ajax. But that's not all, it also uses blogs and wikis. Amazon's spin on blogs is called plog. Lets look beyond the name, which does not sound terribly exciting, to the actual function. Plogs offer a way for you to receive personalized news from various source - like authors, manufacturers and journalists. In a way it is similar to email, except that it displays on your personal Amazon page.
Each entry in your plog is written by a real person, but it is delivered to your plog automatically - based on your Amazon purchase and browsing history, as well as the ratings of other plog posts. I found most things in my plog to be highly relevant and interesting. Amazon offers an RSS feed that I can subscribe to via my RSS reader. So this becomes a personalized news feed from Amazon - quite interesting and unique.
The Wikis are also very recent on Amazon and not as developed as the plogs yet. I have to admit that this is the least favorite new feature for me, because of the way it is implemented. To start with, it needs to be clearly distinguished from the user reviews. The whole point of a wiki is to allow users to create a rich set of interlinked pages. The current implementation does not deliver this. Instead the wiki is embedded right into the page and kind of blends with the rest of the content.
If this is to work, it needs to be redone as a regular wiki - and it needs to deliver value beyond what is already on Amazon's webpages, or what can be done via Wikipedia.
So Amazon has certainly caught the web 2.0 winds and is putting those kinds of features to good use. The company continues to innovate both as a rising web services star and one of the best online shopping destinations. Its creativity, drive to innovate and ability to execute is impressive. But apparently not for Wall Street. Looking at the stock chart below, we see that its been stagnating for a the larger part of five years. So we turn to you for comments on Amazon's technology and future. Is Wall Street missing something big here, or is the fancy web 2.0 technology Amazon is introducing not going to impact their margins that much?
Listed below are links to blogs that reference this entry: The New Face of Amazon - Tags, Ajax, Plogs & Wikis.
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Read/WriteWeb hat ein exzellentes Stück, dessen Überschrift fast alles sagt: The New Face of Amazon - Tags, Ajax, Plogs & Wikis. Ja, richtig gehört: Amazon.com hat Tags Ajax Plogs und Wikis. Und, welche Überraschung, die Wall Street ist nicht... Read More
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Lately Amazon has been introducing a raft of 'web 2.0' features to its e-commerce website. In this post we explore how Amazon has implemented tagging, Ajax, blogs and wikis - and ask whether it's made much difference to the user experience, and to the bot Read More
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Comments
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Great post and great analysis! I've always felt that Amazon has been the hidden dragon in the midst of this Web 2.0 phenomenon, not just because of their e-commerce offering, but also their web services suite and Jeff Bezos. AWS is not just useful for startups, it will be essential to smart startups that want a competitive edge.
With AWS adoption barely getting started, it's understandable that their stock price has been stagnant.
Bezos is a true visionary, and Amazon probably has a few more gems that they will unleash. Don't be surprised if you see Amazon's stock price surge over the course of 2007/08.
I'm continuing to love your blog more and more each day. It's such a refreshing perspective and proof that there is still yet more room for other TechCrunches and Gizmodos out there.
Keep up the great work!
Posted by: Michael Vu | January 25, 2007 4:15 AMThank you for your kind words, Michael.
I agree that Amazon is doing wonderful things technically. The Web Services strategy is unique, as the recommendation technology. Lets hope that stock will soon reflect it. That is of course, if margins are good enough.
Alex
Posted by: Alex Iskold | January 25, 2007 5:42 AMWith the size of Amazon, the strategic decision to grow organically is a brilliant one....
Posted by: Adrian keys | January 25, 2007 7:59 AM"Looking at the stock chart below, we see that its been stagnating for a the larger part of five years."
Five years? Looking at the chart you posted, it looks more like three years. I continue to go to Amazon a lot, and love their book list feature.
Posted by: John Fiala | January 25, 2007 9:12 AMThis is a great article, it is very interesting to see what amazon is doing to their site.
I would say that as great as all these features are, wall street is most likely waiting to see if they will bring new sales and growth to the site. Great customer experience is awesome, but not if its the same customers buying the same things they would have done without the new features.
Still very cool.
Posted by: OliverC | January 25, 2007 10:19 AMAmazon is doing the right thing but wall st. will not care. If you don't improve someone else will make a better user experience and eat your lunch eventually. Might seem hard for someone like amazon to have that happen, but think of Yahoo before Google exploded. On the other hand, if you keep up with the times, no one knows who you saved from taking your market. If it can't be seen then what did amazon really do?
Posted by: Eric C. | January 25, 2007 10:38 AMI think Amazon's missing an opportunity to monetize its window-shopper traffic.
Amazon continues to be one of the most visited sites on the net, yet they only make coin when someone buys a product. The margins on that kind of business is slim. I barely buy from from Amazon, but I use it for research and as a reference all the time.
Now, what if they monetized their window shopper traffic through targeted advertising? They already show some ads, but I would propose a dedicated side pane for outside advertising.
Open up and let GYM bid on who's system gets to run the ads, and they can get a great deal. And move the needle for Wall Street, too.
Posted by: Hashim | January 25, 2007 10:45 AM@Eric C. - great point, they need to rush forward before Google starts racing in retail.
@Hashim - how would they do that without impacting current user experience?
Alex
Posted by: Alex Iskold | January 25, 2007 11:36 AMThat's innovation, they took the Long Tail and ran with it!
Posted by: From a great height | January 25, 2007 11:44 AMI'm a huge fan of Web 2.0 - I use del.icio.us religiously - I love wikis - 2.0 sites like zaadz.com are my home - I tag even when I'm not on the web.
That said, I don't use -any- of the 2.0 features on amazon. I mean none. And I don't like what I see in them. The tags are absolute garbage. The wikis are full of spam, rants, and nonsense.
You can't have an effective social/2.0 reality when you have such a short-term and shallow relationship with the pages.
And sadly, with so much excess, Amazon product pages are now as much of an eyesore now as much of as your average myspace 'sink'.
Why not throw all this in a 'discussion' page -behind- the product page, ala wikipedia...
Posted by: Chris | January 25, 2007 12:22 PMSuggesting items buyers might like to purchase whether socially or item-based is great, but seperating a buyer from more cash then they intended to spend is another. The plog idea COULD be useful if it is used in such a way to notify a buyer when a desired item is available at the right price as tagged. "Whats this item worth to me?"
Posted by: Matt | January 25, 2007 12:47 PMSomething that I would like addressed by Amazon is their partnering with other sellers. For books and things, I guess that they need the masses of single book sellers to offer a price point to bargain buyers, but when it comes to other products like electronics, they are not doing a good job. TigerDirect or whoever else, has to pay almost 10% of each product to Amazon. This is brutal with such low margins....so some people (although it is against the Amazon rules) put higher prices on their Amazon listings and retain their own-website low prices and the other simply do not list with Amazon. This gives Amazon the appearance that you can always find cheaper prices elsewhere (which is true for most products) and ultimately hurts them. I don't turn to Amazon for the lowest price! I think that they need to focus on the products that they sell and make money off CPC programs like Shopping.com. I would be willing to bet that they will gobble up one of these companies pretty soon. pronton.com shopping.com shopzilla.com Because these companies do a better job of organizing outside vendor products. This would still make them a healthy amount of money ($1/click) and truly be the one-stop location to find the lowest price....period.
Posted by: John | January 25, 2007 2:28 PMJohn,
http://www.monomachines.com
a Good example of Amazon's direction can be gleaned from http://endless.com http://endless.com It's not branded as Amazon, but it is them. I was a (front end, AJAX) consultant on that site, and it was clear to me that they're using it as a test bed. I believe they want to prove the usability and feasibilty here before the changes are all implemented on the main moneymaker.
Posted by: jon rahoi | January 25, 2007 2:44 PMThis post was very useful for me.
Posted by: Ankara Rehberim | January 25, 2007 3:07 PMAmazon is the shiza!! I support them and their teamwork with Borders all the way. Being the blinded individual I am. I'll always shop at Amazon even if it cost one dollar more. It doesn't make to much of a difference. Come on they have Borders. Hah haa! On that note I believe their stock is at a great buy. I am truly one of their long time investors.
Great Post!
Posted by: Allan | January 25, 2007 3:11 PMThese types of improvements won't drive an immediate financial impact, however they ensure that Amazon's core website remains relevant and competitive to an increasingly sophisticated audience. In the long run, these types of improvements could be strategic building blocks for new businesses or services like AWS. AMZN is definitely a company and a stock to watch.
Posted by: Michael Zielinski | January 25, 2007 4:13 PMyes. at least theyre working on new features and changing their designs. unlike ebay..gawd ebay have never redesigned their site!!
Posted by: get paid | January 25, 2007 6:27 PMLegit Paid To surf
Finally, Amazon is moving towards Web2.0. Impressive. The rest of the web giant should follow as well. Don't left behind.
Posted by: PohEe.com | January 25, 2007 8:59 PM"@Hashim - how would they do that without impacting current user experience?"
Browsers on Amazon are in buying mode, therefore relevant ads would enhance the experience, not distract from it.
When I read Vibe Magazine I enjoy the ads from hip-hop and R&B artists because it complements the content. I think the same would go for ads in Amazon.
Posted by: Hashim | January 25, 2007 10:02 PMHashim,
I don't believe the product pages are a good place to advertise. Amazon seems to care about user experience far more than making a couple of extra bucks. The more I've used amazon for reviews and descriptions, the more I've bought from them, and the more I've bought from them, the more likely I seem to want to buy from them the next time. They're doing something right in the customer experience side. And I think throwing ads on a product page to distract me
One place they could throw up a couple of ads could be the plog page. Or other pages that are not directly displaying amazon products.
Just my $0.03 (adjusted for inflation)
arash
Posted by: Arash | January 26, 2007 9:23 AMI'm definitely a fan of Amazon's web services strategy, but I'm not surprised the Wall Street hasn't noticed. None of the features implement directly impact the bottom line. They do improve user experience and keep Amazon's offering up to date but unless it generates more revenue (or gets really good press) it's unlikely to impress Wall Street.
As for placing ads on Amazon pages, I think they could certainly do this without significantly impacting the user experience. In fact, they could brand entire sections of the site an generate significant revenue doing so. I think they would need to be selective about which ads to place but well integrated branding offers would certainly work.
Posted by: Billy | January 27, 2007 8:50 PMIf there are ads on Amazon pages, what would these ads be about? I see two types of ads:
1) External. This is going to drive traffic away from the site, and probably would not be worth it, because of loss of a transactions.
2) Internal. Ads that point to other products on Amazon, but Amazon is already doing that in a great way.
Alex
Posted by: Alex Iskold | January 28, 2007 7:21 AMWeb 2.0 is great, but that still doesn't solve Amazon's cluttered site and checkout experience.
Posted by: Denise | February 1, 2007 2:15 PM