It may seem an unlikely idea, but there are those who suggest that the technology invented for the hit James Cameron film, 'Avatar,' may show us what the future of virtual worlds looks like.
(Credit: ILM/Fox)
Update at 2:10 p.m. PDT: This story has been modified to reflect both Jon Landau and James Cameron's membership on the advisory board of virtual world platform developer Multiverse.
Since the release of his massive hit "Avatar," director James Cameron has gotten plenty of deserved attention for his filmmaking innovations, having invented a camera system that captured live footage of his actors and integrated it immediately into fleshed-out scenes from his fictional world of Pandora.
But movies may not be the only medium Cameron's innovation is pushing toward the future. In fact, the technology he and his visual effects partners built for the record breaking film may also provide our first real glimpse of the future of 3D virtual worlds.
Today's virtual worlds have attracted millions of users, significant venture capital and sometimes impressive revenues. But some experts think it's a no-brainer that augmented reality tools like Cameron used to turn "Avatar" into history's highest-grossing film could soon be the core of what millions of people experience in 3D virtual worlds that until now, we've only been able to dream about.
Today, the term "virtual world" means a lot of things to a lot of people. To many, it means 2D online social games like Gaia Online or Club Penguin. To some, it means large-scale massively-multiplayer online games like World of Warcraft. And to others, it's open-ended 3D experiences like Second Life.
After Second Life took the world by storm in 2005 and 2006, introducing many to a 3D environment in which they could create nearly anything they wanted, there hasn't been a major next step forward.
Virtual worlds like Second Life captured the public's attention but haven't managed to push the technological bar forward much since then.
(Credit: Daniel Terdiman/CNET)One could argue that virtual worlds have even taken a technological step backward, as most of the energy in the space these days is being put into building 2D Flash worlds for kids, or Facebook games played by the masses. It's big business, but hardly cutting edge.
To virtual worlds expert Bruce Damer, however, what Cameron created for "Avatar" is the first peek at a tremendous leap of innovation, one in which huge audiences could be using virtual worlds that feature vast arrays of content and data coming in from sources like Disney and Google, or individual users themselves, and devices like Cameron's "Avatar" camera, iPhones or car windshields with augmented reality overlays. And everything and everyone in between.
"If you combine the Wii or (Microsoft's Project Natal) with augmented reality glasses or...just (hold) up your smart phone, you will 'see' into the virtual world that is cast all around you," said Damer, the author of the 1997 book "Avatars." "In Vernor Vinge's superb novel 'Rainbows End,' the characters use a kind of contact lens that gives them a parallel vista into the virtual landscape mapped around them on the physical landscape."
Damer pointed to an iPhone app that you point at the sky, which shows you all kinds of information about the stars and constellations you're looking at. "That is the beginning of ubiquitous augmented reality and virtual worlds," Damer said.
It's not to say that Cameron's specific innovation will be implemented in any particular virtual world. Rather, technologies like what Cameron built for "Avatar" may someday become part of the mainstream experience of blending data coming in from the real world with a rich server-based virtual experience.
It could be, proposed Damer, that some people would have minor demands: they'd want simply to be able to find out if a specific restaurant is open and if it serves pasta. That kind of data could come from Google, via its Street View service, but users could access it through advanced, augmented reality glasses, or via an advanced smart phone. And plenty of other low-bandwith content would also feed this system, providing the base on which to build, things like on-screen documents, data from social networks, weather information, and so on.
For others, however, their demands might be more immersive: a virtual palace, a climbing gym or even a virtual representation of someone's farm, complete with avatars to welcome visitors. "It will get more sophisticated when whole worlds are mapped onto the sim-reality complete with avatars--other people--and bots," Damer said.
In short, we will become immersed in it, and the input will come from all directions.
That vision is not entirely new, of course. In 2007, the Accelerating Studies Foundation released the Metaverse Roadmap report, a prediction about what the 3D Web of 2016 would be like.
That vision of the 3D Web imagined a combination of four types of technologies, all of which would converge in the creation of immersive experiences that would be shared by millions upon millions of people. Those technologies included augmented reality--immersive, location-aware and self-tracking; Lifelogging--technology used for always-on recording of everything and everyone around us; and "mirror worlds," advanced versions of things like Google Earth which add high degrees of context to "virtual modes of reality."
In total, what the report predicted is similar to the vision of the future of virtual worlds that Damer sees emerging from "Avatar" and the technologies behind it.
That's a notion that Jerry Paffendorf, one of the Metaverse Roadmap organizers, agreed with.
"The world will eventually be totally cloaked in real-time graphical overlays," Paffendorf said. "In general, you can already see that trend that people like 'real things' in their virtual worlds. They want that connection, so it at least seems obvious that the real world is the real ultimate stage for virtual worlds."
Like Damer, Paffendorf sees the beginnings of this complex future virtual world in the recent preponderance of augmented reality apps "that let you look through the camera to see things that aren't physically there: Either data overlays like directions or where tweets are coming from or a digital doggy prancing on your kitchen counter."
Despite their limited utility, Paffendorf suggested, those kinds of apps are far more compelling to a lot of people than existing virtual worlds like Second Life.
"You can see the signs that that's a very compelling experience for people," he said. "I think on a deep level, that's irresistible for people. The feeling of putting imagination on the outside of your body, or seeing the world in new ways that (are) either more informative or more satisfying emotionally or conceptually."
In fact, Paffendorf has a term for this: the "gravity of reality."
"It seems like even in pure virtual worlds, you always get pulled back to real world references," he said, "because not only are they socially and culturally familiar (but) they go back to all of our biological evolutionary underpinnings. The real world wins, so all the augmented reality things are going to be especially compelling, because they're reality, but plus-plus."
Virtual worlds in their infancy
For some of those involved in making "Avatar," the idea that the technology behind the film could indicate the beginning of a new era for virtual worlds makes a lot of sense. In part, that's because it's clear, in watching what Cameron and his team achieved with "Avatar," creating an entire world with computer graphics and then directly integrating acting performances, that something new and exciting is going on. The question is, will it benefit anyone besides the filmmakers?
"What we were doing, virtual production in a virtual world, right now it's at a business to business level," said Jon Landau, the producer of "Avatar." "Ultimately, it's going to be at a consumer level. People (will) go in and record their stories and present their stories, just like they do (now) with YouTube. Virtual worlds are another avenue for people to be creative and tell stories."
Further, Landau said, today's virtual worlds are already knocking at that door. The only thing missing, he said, "is the virtual camera, where you use it the same way you'd use a regular camera."
That, of course, is what Cameron did on "Avatar." But as Landau said, for now, that's a tool--at least for incorporating rich real-world imagery directly into a virtual environment--that's only in the hands of businesses.
Both Landau and Cameron are members of the advisory board of the virtual world platform developer Multiverse. That company recently worked on "Avatar"-related games for McDonald's and Coca-Cola, including one that immerses players in a first-person experience on Pandora.
But as we've seen with forthcoming projects like Project Natal, that business-to-business restriction is changing soon. And while it's too early to tell how much Natal will impact virtual worlds, there's little doubt that technologies like that will someday soon impact people far and wide.
"I don't think that's that far away from the home," Landau said.
Facebook setting virtual worlds back
The biggest danger at the moment for those who want to see rich, 3D virtual worlds take off right away is the massive popularity of social networks like Facebook and Twitter.
Paffendorf said that there's little doubt that the Second Lifes of the world missed an opportunity to give mass numbers of people the kind of personal connection they really wanted, and that the key is to find a way to mix the virtual and the real. Only a few minutes of Facebook can help people satisfy that need. But they will want more down the line, and that's something that fully immersive experiences will have to offer.
"Facebook's got the mojo going," Paffendorf said. "But the future's not going to be all text and Flash windows. The fact that it is right now speaks to the deep human desire for real life connections and instantaneousness that new types of virtual worlds have to learn from. But I can't see it stopping there...I see social networks like Facebook that put everyone in the real world one click away as the foundational piece that was missing from a lot of last generation virtual worlds. Now there's a new wheel to build on.
Holiday shoppers brought good cheer to e-commerce retailers, spending $27 billion online from November 1 through December 24, a 5 percent jump over last year, ComScore reported Wednesday.
The period from Black Friday through Christmas Eve was also bright and merry as sales grew by around 3.5 percent, even after adjusting for an additional shopping day this year. Consumer electronics proved to be the hottest selling category, rising 20 percent. Larger retailers outpaced smaller vendors thanks in part to their use of free shipping and marketing via social-networking sites, said ComScore.
(Credit:
ComScore)
The growth in this year's online holiday sales showed improvement over 2008, when sales dropped by 3 percent. Results were likely helped by a snowstorm that blanketed the East Coast the weekend of December 19-20, forcing many shoppers to pick up those last-minute gifts online.
"Online sales growth this year was driven by a continued increase in the number of people buying online, but consumers' economic challenges resulted in a slight decline versus last year in the amount spent per buyer," said ComScore chairman Gian Fulgoni in a statement. "The season featured a strong start as a result of early retailer promotions and a very strong finish helped by the snowstorms that occurred the weekend of December 19-20, retailers' willingness to offer free shipping later in the season, and consumers' confidence in expedited shipping arriving in time."
The Kindle e-reader, the Nintendo Wii, and an Asus Netbook were among the top tech items for Amazon customers in 2009.
The retail giant touted three "Best of 2009" lists on Wednesday, revealing the best selling, most wished for, and favorite gift items chosen by Amazon consumers for the year. The company also introduced its Bestsellers Archive, which can show historical popularity among several categories, including print books, Kindle books, music downloads, movies and TV shows, and video games.
Amazon has been relentlessly proclaiming the popularity of its Kindle device, though it just as steadfastly has declined to provide actual sales numbers. PC maker Asus, meanwhile, has been riding the Netbook craze and drew top honors in Amazon's computer category with its Eee PC 1005HA 10.1-inch Netbook.
Nintendo's Wii game console lost some steam during 2009, but heading into the holiday season gave strong signs of regaining its dominance.
Other top tech items on the several Amazon lists included Microsoft Office Home and Student 2007, an Omron Digital Pocket Pedometer, and an Accutire Programmable Digital Tire Gauge--the latter two perhaps being of use to tech types who need to take a long walk or drive after a hard day using Microsoft Office.
The Casio Men's Sea Analog Illuminator Dual LED Dive Watch made the best-sellers list for people who need to keep tabs on the time while under the sea. On the most-wished-for list was the Sunforce 50044 60-Watt Solar Charging Kit, designed to tap into the power of the sun to charge the battery in your car, RV, tractor, boat, and other vehicles on the go. New Super Mario Bros also made the cut as the most-wished-for video game.
Amazon's "Best of 2009" lists cover all but the last 10 days of the year--stretching, that is, from January 1 to December 22, 2009. The Bestsellers Archive goes back in time to the start of Amazon to unveil the most popular items over the long haul.
In the video game category, the Wii came in at number 6 historically and has been on the top 100 list for 1,128 days. Among electronics, Apple's iPod Touch 3G takes the second (8GB version) and third (32GB version) slots on the list for 112 days. And for software, MS Office Home and Student 2007 hit the number 2 spot as part of the top 100 for 1101 days.
You can also view historical data right in the Bestsellers Archive just by selecting the pulldown menu for year and choosing a different year, as far back as 1995 for books and more recent years for other items. A peek back at 1999, for example, revealed that "Who Wants to Be a Millionaire" was the most popular video game of the year.
"The Bestsellers Archive reveals the collective interests of our customers back to the beginning of Amazon.com," said Eva Manolis, vice president of Retail Customer Experience, in a statement. "It's a fun experience enabling exploration of bestselling products -- helping customers find their favorites as well as discover those they may not know about."
The full 2009 lists can be found on Amazon's news release Web site.
Sex, porn, and Michael Jackson were among the most popular items kids searched for online in 2009, as tracked by Symantec's OnlineFamily.Norton.
Symantec on Thursday revealed the top 100 favorite search terms among children 18 and under found by its free OnlineFamily.Norton service, which helps parents monitor their kids' online searches. Though innocuous terms like Sesame Street and "New Moon"--a popular movie in the Twilight vampire series--made the cut, sex showed up fourth on the list for boys and fifth for girls, following YouTube, Google, and Facebook as the three top terms.
For boys, the top 25 search terms focused on social-networking sites, shopping sites, and certain adult terms. Girls seemed to favor subjects related to music, TV shows and movies, and celebrities.
Speaking of celebrities, to no one's surprise, the late Michael Jackson was the most searched for celebrity, coming in at number 12, followed by pop singer Taylor Swift at No. 13. Other hot stars that made the list included Miley Cyrus, Britney Spears, Beyonce, the Black Eyed Peas, the Jonas Brothers, Eminem, Rihanna, and Chris Brown (who was in the news this year after admitting that he assaulted ex-girlfriend Rihanna).
Searching for celebrities online, however, may be hazardous to your PC's health. Symantec has found found that these searches sometimes draw people to dangerous Web sites, which spew out viruses, spam, and other malware.
Kids seven and under searched for items related to video games, while older kids were heavy into music, with 34 percent of teens and 27 percent of tweens searching for music-related topics. The Miley Cyrus song "Party in the USA" was the most-searched for tune among kids, while "Boom Boom Pow" by the Black Eye Peas took the No. 2 spot.
Tech terms that popped up on the list included MySpace at No. 8, MSN at No. 33, the iPod Touch at No. 98, and Bing last at No. 100.
To compile its top 100 list, Symantec tracked 14.6 million searches run by users of its OnlineFamily.Norton service and ranked the terms according to ones submitted most frequently to those submitted the least. The terms were collected anonymously, so none could be associated with any specific children or families.
This WebGL demo shows 3D Collada files--in this case a Spore video game creature.
(Credit: Screenshot by Stephen Shankland/CNET)If you want to see the scale of browser makers' ambition to remake not just the Web but computing itself, look no farther than a new 3D technology called WebGL.
The WebGL vision is simple. You're running around in a video game universe, blasting radioactive aliens--but you got there by visiting a Web site, not by installing the game on your PC.
This sort of computationally demanding chore contrasts sharply to with today's Web, whose top-notch programmers strain to reproduce bare-bones versions of the rich capabilities open to applications running natively on a computer.
WebGL, while only a nascent attempt to catch up, is real. WebGL now is a draft standard for bringing hardware-accelerated 3D graphics to the Web. It got its start with Firefox backer Mozilla and the Khronos Group, which oversees the OpenGL graphics interface, but now the programmers behind browsers from Apple, Google, and Opera Software are also involved.
Perhaps more significant than formal standards work, though, is WebGL support in three precursors of today's browsers--Minefield for Mozilla's Firefox, WebKit for Apple's Safari, and Chromium for Google's Chrome. Opera has started implementing WebGL, too, said Tim Johansson, Opera's lead graphics developer.
With a little tinkering--check the instructions and caveats below--you can give it a whirl, too. Overall, I was favorably impressed with the technology.
CNET News Poll
Its performance certainly isn't enough for a competitive first-person shooter, but it's approaching utility for casual gaming. And because of how WebGL elements can be integrated with the rest of a Web site's code, it's got some advantages.
What is WebGL?
WebGL is one of a handful of efforts under way to boost the processing power available to Web applications. It marries two existing technologies.
First is JavaScript, the programming language widely used to give Web pages intelligence and interactivity. Although JavaScript performance is improving relatively quickly these days in many browsers, programs written in the language are relatively pokey and limited compared with those that run natively on a computer.
... Read MoreGot a case of information overload? You're not alone.
A study released Wednesday from the University of California, San Diego, reports that the average American consumes a whopping 34GB of data and 100,000 words of information per day.
Over the course of 2008, Americans as a group gobbled up 3.6 zettabytes of data. (In case you missed the definition of "zettabyte" in your daily data binging, that's a million million gigabytes.) For all you visual learners out there, the researchers helpfully point out that 3.6 zettabytes is equal to the "information in thick paperback novels stacked seven feet high over the entire United States, including Alaska."
Between 1980 and 2008, the number of bytes consumed by Americans increased 350 percent. The average annual growth rate was calculated at 5.4 percent.
Here's how TV and the Internet stack up in the "How Much Information? 2009 Report on American Consumers."
(Credit: University of California, San Diego)Dubbed the How Much Information? project, the study measured data consumption both at home and away from home. It includes several information sources, "including going to the movies, listening to the radio, talking on the cell phone, playing video games, surfing the Internet, and reading the newspaper."
Besides bytes and words, the study also noted the number of hours spent consuming information.
In terms of time, traditional media still has a strong hold on the U.S. The study reported that "a large chunk of the average American's day is spent watching television." On average, 41 percent of an American's day is given over to watching television shows, viewing recorded TV, or watching DVDs.
Noncomputer sources, the study says, account for more than three-quarters of U.S. households' information time.
But if bytes are the standard by which American days are judged, it's the video game that takes the top prize. Researchers found that the average American consumes 18.5GB of gaming data per day, representing 67 percent of all bytes they consume daily.
"Games are almost universal, but most of the gaming bytes come from graphically intensive games on high-powered computers and consoles, which have the equivalent of special-purpose supercomputers from five years ago," report author Roger Bohn, director of the Global Information Industry Center at UC San Diego's School of International Relations and Pacific Studies, said in a statement. "Games today generate their bytes inside the home, rather than having to transmit them over cables into the house, but gaming is increasingly moving online."
The study found that 16 percent of daily information consumption comes from the Internet. A staggering 79 percent of all American two-way communications is done through the Internet.
If you want to see what else UC San Diego found in its study, click here.
Don Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.
Video game developer Electronic Arts announced on Monday that it has acquired social-gaming company Playfish, paying $275 million in cash and $25 million in "equity-retention arrangements." Playfish also is entitled to up to $100 million if it meets performance milestones by December 31, 2011.
EA also announced later Monday that it planned to eliminate 1,500 jobs, or about 17 percent of its workforce, as part of a plan to reduce annual costs by about $100 million.
The acquisition of Playfish falls in line with EA's desire to be more than just a developer for traditional gaming platforms, like consoles and the PC. The company said in a statement that the acquisition "strengthens its focus on the transition to digital and social gaming."
Thanks to the explosive growth of social networks and games made for those platforms, Playfish is enjoying strong performance in the social-gaming space. The company has more than 150 million games installed on several platforms, including Facebook, MySpace, the iPhone, and Android-based devices. According to Playfish, more than 60 million active players per month are playing titles. Its Facebook titles include Pet Society, Restaurant City, and Country Story--all three are among the most-popular games on the social network.
The EA Interactive division, which Playfish will join, has done a fine job of capitalizing on the trend of online and mobile gaming. That division includes Pogo, one of the top casual-gaming sites on the Web. The Mobile side of EA Interactive has captured 34 percent market share in the U.S. with the help of Madden NFL 10, The Sims, and Tetris.
Updated at 10:20 p.m. with details of job cuts.
Don Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.
The organization responsible for managing the assignment of domain names and IP addresses has approved a new plan to allow non-Latin characters in Web extensions.
Known as Internationalized Domain Names (IDNs), the system is designed to globalize the Net so regions around the world can use their own local alphabet characters to surf in cyberspace, the Internet Corporation for Assigned Names and Numbers, or ICANN, said Friday.
Calling IDNs the "biggest technical change" to the Internet since its birth 40 years ago, ICANN unanimously approved the plan on the final day of its six-day conference in Seoul.
IDNs will allow domain names to be to be written in native character sets, such as Chinese, Arabic, and Greek. In charge of managing domain names, ICANN has argued that IDNs are necessary to expand use of the Web in regions where people don't understand English. Since its inception, the Internet has been limited to the Latin character set used by the U.S. and many other nations.
"The coming introduction of non-Latin characters represents the biggest technical change to the Internet since it was created four decades ago," said ICANN chairman Peter Dengate Thrush in a statement. "Right now Internet address endings are limited to Latin characters--A to Z. But the Fast Track Process is the first step in bringing the 100,000 characters of the languages of the world online for domain names."
To expedite the new plan, ICANN will launch a Fast Track process on November 16. At that time, the organization will begin accepting applications from countries for new top level domains, or Internet extensions, based on each nation's character set.
Initially, the change will apply only to local country codes, such as .kr for Korea and .ru for Russia. Major top level domains (TLDs) such as .com, .net., and .org won't see non-Latin editions just yet. But ICANN is pushing to make progress on these major TLDs and hopes to include them in the IDN system before long.
ICANN had discussed and debated IDNs for years, during which time much testing, development, and global cooperation were needed to jump start the new system.
"This is a culmination of years of work, tests, study and discussion by the ICANN community," said Thrush. "To see this finally start to unfold is to see the beginning of an historic change in the Internet and who uses it."
A simple phrase and pin code may be all you need the next time you pay for that book or CD at Amazon.
The online retailer on Thursday debuted a new feature called Amazon PayPhrase, designed to let busy shoppers store their name, address, and payment information in a single phrase and pin code. Instead of entering all that data at the online checkout counter, you type your phrase and pin number when it's time to cough up the cash.
PayPhrase doesn't just work at Amazon--it can be used at any online retailer that lets you pay via Amazon Payments. That covers a range of cyberstores, including Buy.com, J&R Electronics, DKNY, and Car Toys.
PayPhrase also omits the need for a user name and password to store your personal info on every shopping site that uses Amazon Payments. However, you will need an Amazon.com account to set up and maintain your phrase.
Amazon sees PayPhrase as a benefit to consumers trying to juggle different accounts at different retail sites.
"PayPhrase solves the headache of trying to keep track of all the different user names and passwords people use to shop on various sites across the Web," said Matt Williams, general manager of Amazon PayPhrase, in a statement. "With PayPhrase all you need is one phrase and one PIN to pay online."
Here's how the process works:
- You first set up your PayPhrase. The phrase can be two or more words, and the entire phrase must be at least four characters but no more than 100. Amazon provides a list of suggested phrases, or you can create your own. (With Amazon's suggested phrases of "Unusually Obese," "Contraceptive Cream," and "Bush's Education Department," you might want to create your own.) Since everyone's PayPhrase must be unique, Amazon will tell you whether or not your phrase is taken.
- You set up your four-digit pin number.
- You enter your Amazon.com user name and password.
- You either confirm or enter your mailing address and credit card information.
- After your PayPhrase is set up, you'll receive an e-mail from Amazon confirming the details.
- The next time you check out to buy an item on Amazon or an Amazon Payment retailer, a field for PayPhrase Express Checkout will appear. You enter your phrase. You then review your order details and total cost and finally enter your pin number to submit the purchase.
Of course, a feature like this always shouts out one question: Is it secure? Amazon naturally believes so.
Though Amazon stores your credit card information, the company points out that your payment information is not shared with other online retailers. And to modify your PayPhrase settings, you have to log in to the PayPhrase site with your Amazon.com username and password.
You can establish monthly cash limits on your account ranging from $10 to $500. Finally, you can opt to receive an approval request by e-mail or cell phone for all orders that are placed.
Check out Amazon's promo video page for a brief tour of PayPhrase.
You wouldn't know there's been a slowdown in consumer spending by looking at Amazon.com and Netflix.
Both companies have continued to grab customers at a record pace, leading to higher earnings and sales for their third quarters.
Net income for Amazon jumped 68 percent to $199 million, or 45 cents a share, in the quarter that ended September 30, compared with $118 million, or 27 cents a share, in the prior year's quarter.
Sales rose 28 percent to $5.45 billion versus $4.26 billion in 2008's third quarter, the company said Thursday.
Amazon's stock shot up $23.75, or 25 percent, to $117.29 in Friday trading.
Amazon's two-year stock chart.
(Credit: Yahoo Finance)Amazon attributed its earnings to several key factors.
Chief Financial Officer Tom Szkutak said Thursday in a conference call with reporters that consumers continue to spend at Amazon because of its low prices and large selection. The company noted that it had 98 million customer accounts by the end of the third quarter, 17 percent higher than a year ago.
Worldwide sales from books, CDs, DVDs, and other media grew 17 percent to $2.93 billion, while revenue for electronics and other general merchandise soared 44 percent to $2.36 billion.
Another solid driver for growth was the Amazon e-book reader, Kindle.
"Kindle has become the No. 1 bestselling item by both unit sales and dollars--not just in our electronics store but across all product categories on Amazon.com," Amazon CEO Jeff Bezos said in a statement. The company did not release specific sales figures for the Kindle.
Amazon managed to clobber analysts' expectations. J.P. Morgan had forecast earnings per share of 31 cents on sales of $5 billion. Broadpoint.Gleacher analyst Ben Schachter had been eyeing earnings per share of 33 cents and said that sales were 7 percent higher than he expected.
In a report, J.P. Morgan said Amazon's strong sales growth shows that the company is grabbing significant market share from other e-commerce players, such as eBay.
In his report, Schachter called the results "phenomenal." He noted that Amazon was able to keep its costs in check while gaining market share in virtually every product category. The analyst also said he was "shocked" to hear Bezos' statement that the Kindle has become the company's top-selling item.
For the current quarter, Amazon is looking for sales of $8.13 billion to $9.13 billion, 21 to 36 percent higher than last year's fourth quarter, and racing past analysts' estimates of $8.11 billion.
Collins Stewart analyst Sandeep Aggarwal said in a report that improving e-commerce trends and continued growth for the Kindle, among other factors, could make Amazon the fastest growing large-cap Internet stock.
Another beneficiary of solid customer growth, Netflix also surpassed analysts' expectations for the third quarter.
The company's earnings jumped 48 percent to $30.1 million, or 52 cents a share, versus $20.4 million, or 33 cents a share in the prior year's quarter. Sales grew 24 percent to $423.1 million, compared with $341.3 million in 2008's third quarter.
Overall, analysts had been expecting earnings of 46 cents per share on sales of $420 million.
Growth in subscribers was the key driver for Netflix in the third quarter. The company ended the quarter with around 11.11 million subscribers, a 28 percent jump from the 8.67 million subscribers at the end of 2008's third quarter. Of the current total, 98 percent, or 10.84 million, were paid subscribers, while the remaining 2 percent were free subscribers.
"Our business momentum is strong and our third quarter performance keeps us solidly on course for a record 2009," Netflix co-founder and Chief Executive Officer Reed Hastings, said in a statement.
Though most Netflix customers still prefer to get their movies by conventional mail, Internet streaming has gradually taken off. In the third quarter, 42 percent of Netflix subscribers streamed at least 15 minutes of video, compared with only 22 percent in the prior year's quarter.
Customers can stream their Netflix picks not just through the PC but via gadgets like Microsoft's Xbox 360, which has helped attract new customers.
Now Netflix has reportedly struck a deal to add streaming to another device, which Hastings said is already in people's homes. Though the company has been mum about details, analysts believe it may be a video game console made by either Sony or Nintendo.
Netflix shares were up $4.58, or 9 percent, to $54.22 on Friday.
For the fourth quarter, the company believes customer growth and sales will be higher than anticipated three months ago. Netflix now expects to end the current quarter with 12 million to 12.3 million subscribers, up from the prior estimate of 11.6 million to 12 million. That would represent an additional 900,000 to 1.2 million customers.
Fourth-quarter sales are likely to reach $440 million to $446 million, up from the previous estimate of $431 million to $445 million.
However, the company forecasts a downturn in earnings from the third quarter, eyeing fourth-quarter net income of $21 million to $26 million, or 38 cents to 47 cents a share.
Expenses may be one factor affecting current earnings. Hastings said the company expects to spend more on marketing and licensing fees for Internet streaming. Netflix also believes its postal costs will continue to grow, surpassing $600 million next year and $700 million in 2011.
