Amazon to launch virtual currency
This week, Amazon said it will soon offer its own virtual currency, called the Amazon Coin.
Amazon is known for selling just about everything, from unicorn meat to uranium ore. This week, the retailing giant said it will soon offer its own currency, called the Amazon Coin. Customers can buy the coins and then use them to purchase apps for the Kindle Fire.
“I think there’s a potential for a win-win-win here,” says University of South Carolina retailing professor Karen Edwards.
App developers win because Amazon Coins can be spent within apps, offering them a new revenue stream. Amazon wins because it stands to attract the most talented app developers. And consumers win because Amazon is giving away tens of millions of dollars worth of the currency.
Amazon might be the biggest online company to toy with the idea of virtual money, but it’s not the only one. Facebook developed its own coinage to pay for online games, but saw limited success. Last year, Facebook axed the idea.
Analysts say Amazon is in a better position, because there’s a huge market for the Kindle Fire, Amazon’s mobile device. If Amazon Coins are successful, there’s a potential snowball effect -- that’s what happened for BitPay. Business boomed after a giant blogging portal began taking its virtual money.
“Once WordPress decided to accept BitCoins, a lot of companies came on board following their lead,” says Tony Gillippi, the company’s founder.
Expect to see the Amazon Coin released this May.