So many startups I talk to are using Amazon’s cloud computing services in some fashion. For example, Twitter uses S3 for icon storage. We use S3 for storage on all of our projects including all static images and files on CenterNetworks.

• GetGlue destination site goes live – ReadWriteWeb and Mashable
• New FBFoundations Features and Updates – Stay n Alive
• Amazon AWS launches New EC2 High-Memory Instances – Amazon
• A simple flowchart on Creately about Creately – Creatly
• Cart Cobranding, Old Journal-Style Love, bug fixes – Smugmug

Amazon expects the acquisition to close this fall. Hsieh notes that there are no plans to cut headcount and he and the other executives plan to stay on at Zappos.

From Marketwatch, Amazon said in a statement that under terms of the deal, it will buy all outstanding shares, warrants and options of Zappos in exchange for roughly 10 million Amazon shares with their value based on average closing prices in June and July. In addition, Amazon “will provide Zappos employees with $40 million in cash and restricted stock units,” Amazon said.

Update: Based on today’s Amazon share price, the deal is worth more than the $807 million reported in the Amazon release. It looks like the final price will be determined when the deal closes.

One can only wonder if Zappos awesome usage of Twitter played a part in the acquisition. Will Netflix be next?

“There’s heavy call buying and the stock is up on renewed takeover talk, with Amazon being mentioned specifically,” said Fred Ruffy, the senior options strategist at WhatsTrading.com, a New York-based provider of options market analysis. “It’s pretty typical of speculative call buying.”

From Bloomberg, “Netflix spokesman Steve Swasey said the company doesn’t comment on rumors or speculation. Patty Smith, a spokeswoman for Seattle-based Amazon.com, didn’t immediately respond to a request for comment. ”

Amazon stock is up as well today although the market is up overall.

(side note – it’s nice to see Bloomberg listing the email addresses of their journalists at the end of the story. It would be great if all newspaper/magazine sites did this as well.)

Today Amazon has announced their third annual “Startup Challenge” which offers startups that are using AWS a chance to win a variety of prizes and service credits. Startups in United States, United Kingdom, Germany and Israel are eligible to enter and the entry period ends on August 25th. Also, startups must have earned no more than $5 million in annual revenue and/or raised more than $5 million in venture capital funding.

The top prize is $50,000 in cash, $50,000 in Amazon Web Services (AWS) credits, mentoring sessions from an AWS technical expert, and premium gold support for one year. There are a variety of other winners as well.

What’s great about the Startup Challenge is that unlike many startup contests, it doesn’t appear that Amazon is taking any equity for the prize amounts (of course you should check the rules to verify). My take is simple – if you use AWS in any form, submit your entry because, at a minimum, you get a $25 credit (which for CN is like 6 mos free service).

It appears the free processing was initially available only to non-profit organizations but is now open to any business.

There are a few restrictions:

• you can only sell up to $2 million – after that you pay fees
• you must have an average order size of more than $5
• the account must be new – created after April 29, 2009

One additional thing to consider if you use the service as a trial for subscriptions (where you charge your customer monthly/yearly/etc.). You will need to stay with Amazon for as long as the customer wants to remain a paying customer or you will need to ask them to move to whatever other service you use. This is something I’ve thought a lot about as I look at billing options for my startup. It might be worth testing Amazon on a one-time billing option only.

An Amazon judging panel will review all contest submissions and select five finalists based on:

• Creativity
• Overall appeal
• Likelihood of inspiring viewers to shop with Amazon

Amazon notes “suitable to air to a family audience on a national network.” Apparently they will pick finalists and let viewers pick a winner. One winner the Amazon judges picks will win $10k and the user winner will win $10k as well.

This type of “crowdsourced” ad creation seems to be pretty popular these days. For a small prize, Amazon gets press and interested customers – it’s a smart move. The customers who create videos will also pimp them around providing for even more awareness of the contest and Amazon.

The top 10 (in order) are: Amazon, Oracle, SAP, Inventec, IBM, Bharti Airtel, Quanta Computer, Wistra, Tencent and Acer. Other notables: Microsoft (22), Verizon (32), Google (37), and Adobe (99). Apple fell 17 positions from 2nd to 19th and Google dropped from 11th to 37th.

I am wondering when Amazon’s Web services business will pass the product sites in annual revenue.

Amazon explains that if the import or export is set to take a week using your Internet connection, the Import/Export option might be the answer. They continue, “If you have large amounts of data to load and an Internet connection with limited bandwidth, the time required to prepare and ship a portable storage device to AWS can be a small percentage of the time it would take to transfer your data over the internet.”

The cost is $80 per drive plus $2.49 per hour of data loading. Amazon will ship the drive back to you at their expense.

As a heavy user of S3 – this is an awesome option – especially for creating off-site backups. For a couple hundred dollars, you get an external drive with all of your data which you can store offsite. Since it’s a one time import or export, I guess the idea is that you hook up the new drive to the Internet for partial backups after the initial export is completed.

Twitter

I posted some issues I had (am having) with my Twitter account for my startup. I still have not received any sort of reply from Twitter staff to my post or my trouble ticket in their system. I asked Twitter investor Fred Wilson for an update and he told me to go to Get Satisfaction as "some users seem to like it".

Amazon

I had an issue with Amazon Web Services and after clicking help, I posted a message to their customer service form. About 24 hours later I received a very generic reply that the person was going to have to investigate my issue further but he did note that I can’t reply to that email. So that left me with nowhere to turn as the days clicked by without a resolution.

After multiple days I turned to my friends and asked for help. I was able to chat with an Amazon executive (who actually helped me on the weekend while he was on a business trip!) and he got the case moving. I can say that the issue has been resolved to my satisfaction. I would suggest that Amazon look at how they handle support emails on the web services side – it’s a bit odd to me to have such poor email customer service on the web services side when the product side (normal amazon.com) has always worked so well.

Update: one note, the email from the support person who resolved the issue also comes from a no-reply mailbox. I have a follow up question regarding how to handle part of the problem and now I am back to square 1.

Google

I realized about two weeks ago that I never received a required form from Google AdSense. I headed over to the support section for Google AdSense and was promptly told that there is only "limited" email support for Google AdSense. I honestly have no idea what limited means but I learned that I will never know. No matter what I tried, I was never able to reach an email form to even ask for help – all I got was the run-around inside Google’s supposed help section.

After a friend provided me with an email address for a person in the AdSense team, I sent off an email and received a reply pretty quickly stating that I would get a followup from someone who could help me. It has now been 10 days without a response.

Summary

I do wonder (especially on Twitter) if the so-called celebrities receive actual support when needed. Does Shaq or Britney have a hotline for support when or if there’s a request?

If you read CN you know that I put customer service at the top of the list when it comes to a product or service. One of the first posts on CN was a web apps customer service face-off (Dogster received the only A grade). It’s certainly disappointing that it seems like to get any sort of help from the companies I’ve listed you need to know someone.

Here’s a sample for usage in the U.S.:

• The standard price for a small computing instance is $0.10/hour
• If you pay for a reserved instance for 1 year, the cost is $325 and the computing usage drops to $0.03/hour
• If you pay for a reserved instance for 3 years, the total cost is $500 and the computing usage stays at $0.03/hour

We could do the math to see at which point does it make sense to pre-pay but it’s too early in the AM for that. There also a good discussion about the new reserved instances on Ycombinator. A couple of the commenters on Ycombinator have tried to do the math to compute actual pricing.

If you purchased the reserved instance, you are banking on the fact that you will want to remain with Amazon (and that they will be in business) for at least a year. The payment is non-refundable.

Also have a look at our recap of the Amazon Web Services Executive Briefing from last week.

Werner explained that using Amazon web services (AWS) helps companies move from capital expenses to variable costs. The basic idea is that instead of buying enough hardware to make sure you can handle spikes, AWS can grow and shrink as needed.

Here you can see how fast AWS is growing and how in mid-2007, AWS bandwidth passed the bandwidth used by Amazon itself. Werner said if they showed 2008 on the chart, the Amazon line would be gone as the growth has been that big. In fact, he said that Amazon’s ecommerce sites combined is only a moderate customer of AWS.

On a typical product page on Amazon (say for a book), Amazon pulls 200-300 services to generate the page. Each service is managed by an Amazon employee and Amazon gives them the flexibility to build in the language and tools that best fit the needs of the service.

Here you can see the growth in registered developers for AWS. At least count it was 500,000 (I am one of the 500,000).

One of the interesting examples Werner provided came from the New York Times. They wanted to put all of their old editions online but didn’t want to utilize their current TIFF files as they were very large in size per page. They wanted to use PDF files instead. They had to convert 4TB of data and internally they looked at using 6 servers and a lot of hours of development. By using AWS, they got the project fully completed in a weekend and it cost $25 in EC2 processing and S3 storage.

Check out all of my event photos on Flickr.

Amazon describes the half-day seminar as, "this half-day event is designed to provide insight into the state of cloud computing technology today, guide you on assessing which projects are ideally suited for cloud computing, and illustrate best practices for managing cloud deployments."

The speakers include:

• Werner Vogels - VP & CTO at Amazon.com
• Marten Mickos – Sun SVP
• Michael Crandell - CEO and Founder of RightScale

If enough CN’ers attend, we could do a group lunch afterwards.

Amazon has also launched a new program named "Quick Starts". The idea with Quick Starts is to bundle multiple APIs together to shorten the development time needed to go live with the payments service. Amazon notes that the Quick Starts can drop the development time from days to hours.

The available Quick Starts include: Account Management Quick Start, Aggregated Payments Quick Start, Marketplace Quick Start, Advanced Quick Start and Basic Quick Start. To push the new Quick Starts, Amazon is offering 90 days of free payment processing.

In the relase, NY-based Meetup is noted for their exclusive use of Amazon Payments. I’ve heard mixed reviews from meetup attendees about the system. Some like it and others with Meetup supported Paypal. 

Online payment processing is starting to look like we need an OpenID-type solution. Having to suppport multiple payment systems is similar to supporting multiple login systems. What happens if you are losing sales (or event attendees) because you don’t support one of the other systems? 

Reflexive CEO Lars Brubaker noted on the acquisition:

As I’m sure you can all imagine this is a very exciting day for us at Reflexive. It means we’ll be able to expand our distribution network to include Amazon’s amazing distribution channel. With Amazon we will bring a huge new group of customers into play.

At Reflexive we have always prided ourselves on maintaining good relationships with everyone in the industry, and are excited that Amazon shares that philosophy. We intend to provide the best distribution platform anywhere, and to continue working openly with all the participants of the casual games space. Together it is our priority to continue this inclusive attitude going forward.

What this means for all you developers is that it’s time to get excited about your future with Reflexive. We can’t talk about everything yet, but we’ll be in touch shortly with more information. All of the features that you know and love about GameCenterSolution will still be available to you now and in the future, and you can continue to submit games through the Reflexive site. If you have any questions or concerns, please don’t hesitate to contact us at developersupport@gamecentersolution.com.

I’ve created enough casual games in my career to know that they were hot, are hot and will continue to be hot. They bring together players, developers, aggregators and advertisers into a unique opportunity where everyone benefits. SellMoreGames and Gamezebo have more details on the acquisition.