Will Amazon Become The King of Web Hosting Too?

Amazon’s web services (AWS) are on track to being a half-a-billion dollar business. They’re home to some of the hottest startups on the planet. Even older startups use their infrastructure. And despite all the false rumors, pharmaceutical giant Eli Lilly is a customer. Ironically, the company which put the “cloud” in cloud computing has found a fast growth opportunity in a decidedly old fashioned business — web hosting.

Newsweek and the PBS network are using AWS for hosting their web sites. In addition, large e-consulting firms such as Digitaria and Razorfish are adding a few thousand sites a year to Amazon, Selipsky said. From movie sites to hosting apps for large brands, Amazon suddenly (and perhaps unintentionally) finds itself competing with thousands of web hosts. As more and more media companies integrate Internet and mobile applications into their overall product mix, they’re likely to spend more on their infrastructure needs.

Google’s mobile strategy is firing on all cylinders, as numbers released today by analyst firm iSuppli demonstrate. Its analysis shows the Android smartphone platform passing Apple’s iOS by 2012. The projection has Android powering 75 million phones in 2012, compared to 62 million running iOS. This would give Android a 19.4 percent global market share in 2012, with iOS garnering only 15.9 percent.

Happy place

Google’s CEO Eric Schmidt is in a happy place, with his Android smartphone platform hitting 200,000 activations a day. Android shows no signs of slowing down its phenomenal growth, having increased from a respectable 100,000 daily activations in May to the current position. Schmidt credits the HTC EVO 4G on Sprint, Droid X on Verizon and the Samsung Galaxy S line available on all U.S. carriers as big factors contributing to the popularity of the platform.

Given the high number of daily Android activations it is not surprising that Android sales have outpaced that of the iPhone recently. Some may feel it’s not a fair comparison, as the iPhone is a single handset, while Android currently has many handsets factoring into the numbers. It is still a great accomplishment for Google, as the rapid evolution of the platform is a primary factor behind consumer adoption.

Quarterly basis

Smartphone statistics are best tracked on a quarterly basis, given the rapidly changing nature of the business. The Android adoption rate takes on particular significance, as it is now on a pace for 18 million activations a quarter. That a newcomer to this highly competitive business can reach this level in just a couple of years is outstanding, and proves that Google is a force to be reckoned with in the smartphone space.

The original iPhone changed the smartphone industry, but Google has risen to provide undeniable competition to Apple. The Internet company has taken the totally new business model of giving the platform away in exchange for revenue sharing and mobile search opportunities, and left the long-time industry players like Microsoft in the dust. The model has proven successful beyond anyone’s expectations, and it is significant that companies formerly partnering with competitors are now firmly entrenched in the Android camp.

The smartphone world is only the tip of the iceberg

Android’s domination of the smartphone world is only the tip of the iceberg. This strong position is soon to spill over into the mobile computing space, as many companies are preparing to bring tablets to market running on the Android platform. This will put Google in even greater competition with Apple and its iOS platform. The iPhone’s OS runs Apple’s successful iPads and iPods, making iOS a significant force beyond smartphones. Once you factor Android tablets into the mix, Google will be taking it right to Apple in mobile computing.

An HTC smartphone with multiple cores is reportedly in the works, based on results found at a benchmark testing website. The speedy device is ironically named Glacier and meant for T-Mobile, says AlienBabelTech, which spied the results before the data was pulled. Regardless of which carrier is the first to gain a dual-core device, the future is clear: faster, more powerful processors are on the way for the next wave of handhelds.

Device with a dual-core processor

If HTC is building a device with a dual-core processor, odds are good that the chip is a Snapdragon from Qualcomm, as that’s the chip of choice for HTC’s high-end smartphones. And the timing of such a chip sounds about right too; Qualcomm announced the MSM8x60 line of 1.2 GHz dual-core chips back in June and said that samples of such processors were then available to device manufacturers. Those samples could apply to phones, but the capabilities of such processors opens the door to larger-screen devices, as Om noted after the announcement:

AlienBabelTech could be right in that the test results it found are for a T-Mobile super smartphone, but an HSPA+ compatible tablet running Android 2.2 - or the next version of the platform, which should natively support higher resolutions — would certainly fit around such a processor as well. It’s worth noting that a sibling chip supports EVDO Rev. B for CDMA carriers too, which opens the doors for more tablets on the Verizon Wireless or Sprint networks.

Indeed, while more speed in our smartphones is never looked upon as a bad thing – provided the market doesn’t simply chase speed in lieu of usability and other features — compelling competitors to Apple’s iPad slate would certainly benefit from the capabilities offered in Qualcomm’s third-generation Snapdragon, or the fourth-generation OMAP from Texas Instruments, for that matter. I’m not getting too hung up on if such a chip will power smartphones or tablets, because at some point, it will likely power both types of devices.

Data center operators will need to do something to cut the rapidly rising energy costs of all of the data centers being built to support our growing always-on Internet consumption habits. Just this week Facebook said it plans to double the size of its new data center before it’s even built. The electricity used by the world's servers alone doubled between 2000 and 2005, to about 123 billion kilowatt-hours, and if current trends continue, data center power use is likely to increase another 76 percent by 2010.

Overall revenue at AOL, which was spun off from parent Time Warner last year, declined by 26 percent compared with the same quarter a year earlier, and that drop was fueled primarily by a steep decline in advertising revenue, which fell by 27 percent year-over-year. The company also saw a 27 percent drop in subscription revenue, as subscribers to its dial-up and online service continued to drop off. AOL has seen double-digit declines in subscribers virtually every quarter for the past several years, and it now has just 4 million subscribers, down from almost 9 million in 2008. Cash flow from that business is one of the things AOL has been relying on to fund its restructuring.

The positive side of the ledger

On the positive side of the ledger, AOL said that it has almost $400 million in cash on hand, and that operating costs had been reduced in the quarter. But it’s clear that Armstrong has a significant challenge on his hands as the newly public company tries to restructure its way to profitability — something Brad Garlinghouse, AOL’s mobile and Internet chief and a former Yahoo executive, admitted in a presentation earlier this week, when he said the company had “a big f***ing problem.” AOL is also busy trying to fulfill Armstrong’s hopes for its future as a media entity — including building up its Patch.com hyper-local news operation, which the company said had expanded into 83 towns from 44 the previous quarter.

Vonage today released a mobile application for Facebook that provides free voice calls between Facebook friends over Wi-Fi or a 3G wireless network. Calling works only if both people have the Vonage app for Facebook on their phone and is supported on both Apple’s iOS4 and Google’s Android platforms. The new application also supports a chat feature and an indicator showing which Facebook friends have installed the application and are therefore reachable for a voice call.

The new application is clever on the part of Vonage

The new application is clever on the part of Vonage, a voice over IP provider that has struggled to stay viable and has attempted to provide voice calling services to smartphones in the past. But instead of going with a standalone application, the company is smartly leveraging the more than 500 million registered Facebook users and building on Facebook’s platform. And Vonage’s efforts aren’t likely to stop here. In a press release issued this morning, Marc Lefar, CEO of Vonage Holdings Corp. stated, “This is just the start. In the future we will expand on this service to include a wide range of integrated voice and messaging services that change the way people communicate.” I wonder if Vonage might be better off hoping for adoption and then an acquisition by Facebook.

Atlhough I haven’t tried the application on my phone yet — support for the iPad is coming soon, says Vonage — I like the idea for a few reasons. Most of my Facebook friends are people that I’d actually talk to, so as a platform, Facebook provides a cloud-based directory of my contacts that I don’t have to manage. Instead, each of my friends manages their own profile information, which is then pushed down automatically to my handset. Even better is the concept of calling people with the Vonage app, not numbers. Most of my friends have multiple phone numbers between work, home and various handsets, so I often don’t know where to reach them. GigaOM guest columnist Daniel Berninger once wrote about the need to eliminate the tyranny of telephone numbers and instead call each other based on our real names and identities. (I covered this topic for GigaOM Pro, as well.) Other mobile VoIP providers should quickly imitate this feature.