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Amazon Moves Fast to Quench Kindle Fire Complaints

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Company vows a quick fix after first buyers post some zingers.

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Note to Jeff Bezos: Hoo boy, that customer review feature on Amazon can be a bummer, eh? The first 5,000 or so customer reviews are in on Amazon's (AMZN) new Kindle Fire tablet device and, in case you thought the company's CEO wasn't paying attention -- along with about 100,000 tech bloggers -- Amazon already has responded to the criticism.

On Monday, the company put out the word that it will release a free upgrade within two weeks to improve problems noted by early users, particularly in performance speed and the ease of touch navigation. It also will revise a "carousel display" issue; apparently some users prefer not to disclose their media choices to others sharing a device.

The customer reviews weren't bad, really. With more than 5,000 reviews posted as of late Monday, nearly half gave the device the top 5-star grade, and the average rating was 4 out of 5 stars. As is typical on Amazon, both praise and criticism is highly detailed and scrupulously fair ("I want to love it, I really do. But I can't.") And then there are the 1-star reviews, which are fun to read, though you're inclined to duck under your chair to avoid the spew of bile. But only about 12% gave the Fire the ultimate 1-star diss.

The quick response suggests just how much Amazon wants mass acceptance of this device, which is actually a machine for one-click purchase and consumption of Amazon inventory. After all, Bezos might have just said, "Jeez, whataya want for $199? An iPad?"

Meanwhile, the company also is heavily promoting its low-end $79 Kindle model, which is available at Best Buy (BBY) and Wal-Mart (WMT).

Speaking of the Amazon machine, or in this case steamroller, another of the company's aggressive moves may lead straight to public relations hell.

This month, the company began promoting its price comparison smartphone app by offering a 5% discount on several items to customers who scanned the bar codes of the items in brick-and-mortar stores, then ordered the item from Amazon.

Must have seemed like a nice little stunt at the time, but it was a low blow to small independent business people who are struggling to compete with the retail giant.

Forbes calls it a rare "strategic error" by Amazon. The New York Times suggests that the move is "tone-deaf," given the vulnerability of small business, and the communities they are part of. An Occupy Amazon page has appeared on Facebook, apparently run by outraged independent booksellers. Maine Sen. Olympia Snowe issued a statement denouncing Amazon's "attack on Main Street businesses that employ workers in our communities."

The issue lurking behind the visceral reaction is Amazon's long and mostly successful campaign to avoid collecting sales tax from its customers, giving it an inescapable price advantage over its "Main Street" competitors, and even online retailers who operate brick-and-mortar stores. But there are distinct signs that this advantage, which is based on a Supreme Court ruling that dates to 1992, won't last much longer.

The Los Angeles Times reports that legislation pending in Congress might fix the problem by providing federal guidelines for state tax collections on online sales.

Web Weekly In Brief:

Rumor Boosts Netflix
A rumor that Verizon (VZ) may be in talks to buy Netflix (NFLX) goosed the video streaming service's stock by about 7% early Monday. The rumor may have been based on little more than a Reuters report last week that Verizon is interested in launching its own video service. Other rumors linked Verizon with Coinstar (CSTR) or Redbox, possibly on the same thin basis. Netflix closed the day up only $0.24.

Nevertheless, Forbes writer Eric Savitz thinks it would be a pretty good move for Verizon, given the "iconic" status of Netflix as an Internet brand, and its recent drop in stock price.

Another TouchPad Fire Sale
Hewlett-Packard (HP) threw another $99 fire sale on its TouchPad devices on Sunday, and bargain shoppers practically crashed eBay (EBAY) in their eagerness to buy them. This time, HP was selling refurbished rather than leftover models of the tablet device, which flopped at the original $499 or $599 pricing. A lot of shoppers apparently went away mad when their TouchPads disappeared before they finalized their purchases.

Ultra Apple
An analyst for JP Morgan thinks the Apple (AAPL) Air will dominate the market for super-skinny personal computers in 2012, even though it is costly, at $1,000 and up. He reasons that the "ultra-book" is a discretionary luxury item, so style will triumph over price.

Bad Gadget!
A new study reports that many consumers feel that technology companies are bringing new products to market faster than people need them. The New York Times digs deeper into the report, from Underwriters Laboratories, and finds that the real problem is not the pace of innovation. It's the over-the-top marketing of lousy products and clones that's making people nuts.

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