Maneuvering to get around taxes isn’t unique to Amazon — note Apple’s own practice of keeping billions of dollars of profits offshore. The Fortune story makes it clear, though, that Amazon’s greatest advantage in the fight over collecting sales taxes has been its ability to adapt quickly to changes in the law — even if it’s simultaneously fighting those changes aggressively. When things don’t go its way, Elkind notes, “Amazon has shrewdly and successfully maneuvered to turn each development, good or bad, to its own advantage.” Part of this strategy simply means “going to extreme lengths — demanding, wheedling, suing, threatening, and negotiating — to avoid collecting for as long as possible, in as many states as possible.”

When Amazon is forced into collecting sales tax, though, it has been able to turn that into an advantage by “maneuvering to combine its needs (more warehouses) with its wants (preserving tax-free shopping for as long as possible).”

For instance, forced into collecting sales tax in South Carolina in 2010, Amazon “offered a compromise: It would start capturing sales tax in January 2016—almost five years later.” The South Carolina House rejected the compromise, and Amazon said it would leave the state and its “half-built warehouse.” Paul Misener, Amazon’s VP of global public policy, stated at a press conference, “The 1,200 jobs and nearly $100 million in capital investment that were coming to the state — aren’t.”

The House changed its mind three weeks later and Amazon will not collect sales tax in South Carolina until 2016. More recently, the retailer enacted a similar strategy in Texas, but there it was also able to secure a write-off of its own state tax bill. In addition, it will benefit from a “rebate” on the sales taxes collected in the suburbs where its warehouses are located. “This bonanza,” Elkind notes, “would run well into the millions.”

By 2016, Amazon will actually be collecting taxes from 17 states, representing about half the U.S. population, and it’s agreed to collect sales taxes in every state where it has a warehouse. And the Marketplace Fairness Act, which would force large online merchants to collect sales tax on behalf of other states, recently passed the Senate. Amazon, which has long said it supports a federal solution for online taxes, supports the Marketplace Fairness Act.

Amazon also argues that its insistence on a federal solution is a matter of principle. Misener testified in Congress last year that “far from an e-commerce loophole, the constitutional limitation on states’ authority to collect sales tax is at the core of our nation’s founding principles.” He told Fortune, “We feel very good about our position because it’s a constitutional right.”

The full Fortune article is only available online to paying subscribers, meaning you may have to pick up a print copy. It’s well worth a read over the long weekend.

The claims are set out, in part, in a letter last week from Apple’s law firm that urges US District Judge Denise Cote to reveal information about its pricing as well as “internal discussions about the inferiority” of its Kindle e-reader compared to the iPad. Apple also says the redacted information will help expose the “fiction” that Amazon was “forced” to adopt a new pricing system as a result of a 2010 arrangement between Apple and five big publishers.

This arrangement — known as “agency pricing” — resulted in publishers requiring retailers to sell ebooks on a commission basis, in which publishers could set the price. This led the Department of Justice, state governments and class action lawyers to sue Apple and the publishers; the latter settled the cases and agreed to pay out millions but Apple is holding its ground.

Apple argues that the Department of Justice is wrong to portray Amazon as a victim, along with consumers, of a conspiracy to raise prices. Instead, the company claims that Amazon was contemplating agency pricing too and was pleasantly surprised when the publishers took it up on their own. Apple is also using colorful emails obtained from Amazon executives to make its point:

 ”I guess what we never figured in was the idea that five publishers would band together and insist on receiving worse terms,” the email said. “And then Amzn would be ‘cornered’ into accepting them.”

“Hysterical, isn’t it?” the Amazon executive replied. “Jedi Mind Tricks here in Seattle.”

The email exchange was reported by Reuters legal reporter, Alison Frankel, whose recent analysis portrayed Amazon as the “elephant in the (court)room.” Her report adds that Judge Cote stated that she doesn’t want the trial “distorted by a larger battle between two commercial giants.”

What do others think? Apple’s view is likely to find support in at least some quarters. The publishing community continues to fume about Amazon’s enormous clout in the book business. Meanwhile, some copyright lawyers have joked to me in the past that Amazon should send US Attorney General Eric Holder a holiday card for suing Apple and the publishers.

Amazon will get to offers it own views directly; its executives, along with publishing executives, will be among the witnesses testifying on behalf of the Department of Justice.

For now, Judge Cote has decided that the evidence Apple is seeking will remain redacted. But the issue will not doubt arise again if the trial, scheduled to begin on June 3, goes ahead as planned. There is a pre-trial conference planned for later this Thursday — we’ll let you know if any new twists emerge.

Here’s the letter from Apple’s law firm:

Amazon to Disclose (Request)

The tablets were already available in the U.K., Germany, France, Italy, Spain and Japan (as well as the U.S., of course). While a 4G version of the Kindle Fire HD 8.9″ is available in the U.S., only Wi-Fi versions are available internationally.

“Kindle Fire HD is the #1 best-selling item in the world for Amazon since its launch, and we’re thrilled to make it available to even more customers around the globe today,” Dave Limp, VP Kindle, said in a statement.

In the U.S., the 8.9-inch Kindle Fire HD, which is Amazon’s answer to the iPad, got a big price cut in March. The 4G, 32 GB version, which had been $499, was cut to $399. The Wi-Fi-only version of the same tablet got a price cut of $30 — to $269 for the 16 GB version and $299 for the 32 GB version. Internationally, prices will vary based on operating costs.

That doesn’t stop readers from writing their own spinoffs anyway: The largest fan fiction site, FanFiction.net, hosts millions of free stories. And in works like these — and the passionate readers who create them — Amazon sees the potential for profit.

On Wednesday, Amazon Publishing announced Kindle Worlds, “the first commercial publishing platform that will enable any writer to create fan fiction based on a range of original stories and characters and earn royalties for doing so.” The company is making this work by securing licenses from existing entertainment properties and by paying royalties to both the original author and the fan fiction author.

So far, Kindle Worlds has licenses for three Alloy Entertainment properties: Gossip Girl, Pretty Little Liars and Vampire Diaries. Writers can publish “authorized stories” inspired by these properties and sell them in the Kindle Store; Amazon says it will add more licenses soon, in areas like “books, games, TV, movies and music.”

The fan fiction authors get a royalty of 35 percent for works of at least 10,000 words, and a royalty of 20 percent on works between 5,000 and 10,000 words. Amazon is also paying royalties to the original authors of the properties, but would not disclose that royalty rate.

Kindle Worlds is not a self-publishing platform like KDP. First of all, any works published through Kindle Worlds are published by Amazon Publishing — they’re not self-published, so the author doesn’t retain print or digital rights and doesn’t set the work’s price. The website notes that “Amazon Publishing will acquire all rights to your new stories, including global publication rights, for the term of copyright.” Second, Kindle Worlds won’t publish all of the works submitted to it; it will only accept some (though the company says it aims to accept as many as possible, as long as they adhere to content guidelines). Finally, “Amazon Publishing will set the price for Kindle Worlds stories. Most will be priced from $0.99 through $3.99.”

Kindle Worlds will officially launch in June with “over 50 commissioned works” from authors like Barbara Freethy, John Everson and Colleen Thompson. At that time, readers can also start submitting works to Kindle Worlds.

The Digital Reader, which has been following this story for several months, reported Monday that an unnamed Delaware-based LLC was the new owner of Liquavista. Amazon confirmed the purchase in a statement:

“We are always looking for new technologies we may be able to incorporate into our products over the long term. The Liquavista team shares our passion for invention and is creating exciting new technologies with a lot of potential. It’s still early days, but we’re excited about the possibilities and we look forward to working with Liquavista to develop these displays.”

The purchase price was undisclosed, though it may be made public in Amazon SEC filings’s next quarter.

Amazon’s Kindle Fire tablets obviously already have color screens, but Liquavista’s technology offers the potential for color screens that wouldn’t deplete battery life to be added to e-ink readers. This would be particularly useful for children’s books and graphic novels.

“We will continue to add more ways to earn and spend Coins on a wider range of content and activities,” Mike George, Amazon’s VP of apps and games, said in a statement. “Today is Day One for Coins.”

Users can buy 100 coins for $1, with discounts up to 10 percent for larger purchases. Developers get their standard 70 percent revenue share for purchases made with Amazon Coins.

The podcast is sponsored by Amazon Publishing’s romance imprint, Montlake Romance. The first two featured titles – Crazy Little Thing by Tracy Brogan and The Second Chance Café by Alison Kent — were both published by Montlake, although USA Today, which first reported the news about the podcast, says that “the books discussed will span a variety of publishers and imprints, including indie-pubbed books.” (Many of those indie-pubbed books will likely be published through Amazon’s own KDP.)

The podcast host is Laura Roppé, a singer-songwriter and the author of Rocking the Pink: Finding Myself on the Other Side of Cancer, published by Seal Press in 2012.

There are a number of podcasts out there focused on romance books, including those from Smart Bitches Trashy Books and Romance Radio Network. One possible advantage of “Kindle Love Stories” is that, if it focuses primarily on titles published by Amazon, all of those titles should be available free to Kindle owners through the Kindle Owners’ Lending Library.

Merkoski ran technology departments for a number of companies and headed e-commerce initiatives at Motorola before joining Amazon as a technology manager in 2005. For the next five years, he served at the company in a number of Kindle-related roles, helping to launch the first two Kindle models and the Kindle DX. “I first joined a team that built the electronic books for Kindle, but I went on from there to do it all,” he writes. “I invented some of the technology used in ebooks and launched the first few Kindles. I’ve traveled to book fairs in New York and London and Frankfurt to evangelize ebooks. I’ve watched ebooks being made in the Philippines and supervised the assembly of Kindles in China. I’ve talked to the White House, former presidents, and astronauts about ebooks.”

I found Burning the Page the most interesting when Merkoski discusses his experience at Amazon, working directly for CEO Jeff Bezos. “I worked in a modern version of Gutenberg’s workshop,” he wrote. But he can’t share much:

• “I believe Jeff [Bezos] wanted Kindle to be his legacy to history. He wanted it to succeed.”
• “The Kindle organization was in some ways a startup within Amazon and benefited from Jeff Bezos’s venture capital infusions, long-range vision, and full support.”
• “Jeff originally wanted the Kindle code names to come from Star Trek, since he’s such a Trekkie, but more literate minds prevailed.”

While Merkoski describes himself as “the closest there was to an ebook shaman, a tribal elder who could talk to all the people who joined Amazon after me about the early days of Kindle, provide the inside scoop,” he doesn’t (and may be legally unable to) provide any inside scoops in this book. So the next best thing is when he can speak specifically about e-reading platforms — including the advantages of Amazon’s competitors. The development of the Kindle was highly secretive: “No outsiders had seen the Kindle because it was created in a perfect vacuum from the very beginning,” Merkoski writes. That resulted, in 2007, in a $399 device that sold out in five and a half hours, remained out of stock for months and got a lot of mixed reviews (facts that Merkoski doesn’t mention).

Kindle’s flaws — and what competitors did better

Future versions of the Kindle improved on some flaws: Merkoski calls the Kindle 2, introduced in 2009, “truly an incredible device.” But “in fits of wakefulness, I thought about how Kindle lacked nuance, style, fonts, and things like multimedia…Kindle’s success made new ideas paradoxically difficult, as if everyone was walking around on stiletto heels on a glass floor, careful not to run, not wanting to take the wrong risks.”

Kindle competitors, he says, have done better in lots of ways. Take Barnes & Noble: “Out of all the retailers who sell dedicated e-readers, they’re the most innovative. They’re the first to release new book-reading features and to innovate on the hardware side. They were the first to have touch-sensitive e-ink screens…They totally get the social experience of books in the way that it crosses over from the real world to the digital. They can innovate so fast because they’re not burdened with their own R&D group.” Likewise, “companies with more humanistic sensibilities than Amazon will win the e-reader war by making the experience more human, more playful…let’s face it: there’s still something emotionally bereft about a Nook or a Kindle.” The winner on that front, he says, is Apple’s iPad.

Ultimately, Merkoski believes, “Amazon is winning the ebook revolution, but it may lose the war…Competitors like Barnes & Noble and Apple have successfully blurred the lines and proven that they can provide a great media experience, so Amazon’s brand matters less in the eyes of readers now.” He says “it’s hard to love Amazon…at best, you respect Amazon for its obsession to detail, for its cheap prices, and for how it achieves the promised arrival dates for its products.”

Oddly, Merkoski doesn’t mention the Nook division’s terrible performance these days, or the company’s inability to cut into Amazon’s market share. Nooks, he claims, are “downright futuristic.” And that’s really where he wants to go in this book: How will ebooks, reading and writing change?

What’s next: High-speed head plugs and a “Facebook for books”?

Let’s be clear: Merkoski loves books. An endless number of sentences like “Books are priceless,” “Books can inspire us toward greatness,” “Books hold the repository of human knowledge, and then some,” “Reading is an act of bathyspheric descent into the depths of an inky-black ocean,” “For me, it really is about books. They’re not commodities, but soulful voices that actually speak to you” become increasingly irritating as the book goes on and weigh down Merkoski’s ideas on what the future of reading could actually look like.

Once you cut through the platitudes, Merkoski envisions some specific innovations that are interesting and imaginative. For instance, “the future might hold some sort of high-speed plug that goes into an author’s head, some way of taking an author’s imagination and converting it directly into a digital format. The same high-speed cables will connect you to the author’s original experience.” That sounds horrible to me, but another idea — a screenless e-reader that uses a pico projector to project an ebook onto a blank surface (like a ceiling or the pages of a blank book), pulls ebooks from the cloud and is navigated by voice commands — seems like something that could actually exist in a few years.

Ultimately, Merkoski believes there will be

“just one book, a vast book that includes all the others inside it, which I call the Facebook for Books. You’ll be able to start reading from an ebook and naturally segue into a different one, just by following a link. It could be a bibliographic link, or just a link to a book that influenced the author and that’s been annotated as such by a reader like you or me. You will be able to link forward or double-back and keep reading…The more content you get, the more cumulative the connections are between books, and the more intertwined and rich the network becomes.”

The company best situated to make this dream a reality is not Amazon, Merkoski believes, but Google — thanks to its knowledge of search engines and the vast number of titles it’s scanned for Google book search, “Google has digitized more of human culture than any other retailer or library.”

For now, rights issues are in the way, and so books, “our greatest repository of knowledge and inspiration, aren’t participating in conversations with us online, with the exception of public-domain books that lag by at least ninety years.” It will take “a sea-change in opinion about ebook pricing models,” Merkoski acknowledges, before such a hyperlinked database of books can legally exist — even though we have the technology to put it in place now.

Great UX, thwarted by walled gardens

Readmill is a great reading environment. That their designers obsess on visceral user experience makes it a true pleasure to use. It may very well be the best “feeling” ereader application out there. This is a critical attribute for an environment in which you can spend hours a day.

But it suffers from the thing that any book-related company or product or startup that is not a Kindle suffers from: It’s a slog to get content into it.

This is a discussion less about DRM (although, it is that, too) and more about seamless user experience. Sure, you can hunt down a copy of “Gone Girl” on a website you’ve never bought a book from before. Enter your credit-card information. Download it. Then upload it to your Readmill account. Or, you can click “Buy now with 1-Click” on Amazon.com and have it on all your devices in 10 seconds, ready to be read in the Kindle reading application. You have to be really persuasive to beat that kind of convenience.

Since Amazon would never allow its library to be accessed by reading applications other than Kindle, this is a non-trivial problem for a startup like Readmill to surmount.

A community to challenge Amazon

Goodreads has always been a bit of an enigma. Truth be told, I’ve never been an avid user. There’s a number of reasons why, but the biggest is simply that the distance between my books — and the activity that happens within them — and Goodreads has always seemed ginormous. That is, updating reading statuses for books on a website always felt odd and forced. It felt odd in 2007 when I was mainly reading physical books, and it feels odder still in 2013, where I’m mainly reading Kindle books. That said, 16 million people clearly don’t agree with me.

So why did Amazon buy Goodreads? Well, the promise of a collaboration between Goodreads and a great reading platform (like Readmill) loomed large. A combination like that had the chance of being the Last Great Stand against Amazon. Goodreads is many things but most defensibly it is a community. A strong community. An engaged community. (And now, a slightly enraged community.) Sixteen million users is nothing to dismiss. It’s not Facebook or Instagram levels, but 16 million excited people is a firehose to be reckoned with. What Goodreads didn’t have was a reading application.

It also should be noted that publishers love Goodreads. No surprise there; it’s just as one would imagine. Goodreads is an amazing platform for promoting books to an avid, core readership. So if Goodreads were to develop a reading application, it doesn’t take much imagination to see them signing up the catalogs of the big five and launching a Goodreads store for the Goodreads reader. And were that reading application to plug seamlessly into the Goodreads ecosystem — the community — then getting those 16 million users to switch from Kindle to Goodreads Reader would have been one of the easier platform sells in publishing.

Goodreads users already want to hang out at Goodreads. If they could read there too — in an app — I suspect many would.

Kindle flaws present opportunity

Despite the maturity of the market, the tablet reading space is still weirdly under-polished. Kindle reading environments have hardly changed in the last three years. The Kindle app has seen some improvement — mainly in support for complex KF8 formatted titles — but the polish around the reading experience, that visceral component, for novels and other mass-market books has remained largely unchanged. Books in the Kindle applications still don’t hyphenate. And page slides still stutter ever so slightly. These are small details that add up.

Certain polish aside, Kindle’s strengths are manifold. It has a vast catalog and transactional trust. It has all our credit-card information, making purchasing seamless. It is also supremely good at cloud data — consistent and reliable storage and retrieval of our books across devices. What it doesn’t have — and no inkling or iota of — is community.

What might have been

So you can see, there was a combo here. A curious matchup. Take one of the most polished, most satisfying digital book reading applications and merge it with one of the most engaged reading-specific communities. A marketplace could have developed that might have been the first real competition against Kindle. Not one built around competing with Kindle toe-to-toe as Barnes & Noble and Kobo have attempted (and failed at), but competing on ground on which Amazon has no footing: community.

It’s a certainty that Amazon, too, saw this. Which is why the sale this week comes as little surprise. I’ve always imagined that secretly, deep down in the murky stacks of Amazon headquarters, they had a crackerjack team making kindle.amazon.com the best social reading network in the world. Maybe they did. Or maybe they just realized it would be easier to buy the one that already existed.

Craig Mod is an independent writer, designer and publisher focused on publishing and storytelling. You can follow him on Twitter @craigmod.

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“Amazon’s acquisition of Goodreads is a textbook example of how modern Internet monopolies can be built,” said Guild president Scott Turow in a statement issued on Friday. Turow claims that Amazon sought to eliminate Goodreads as a future competitor and that it has “squelched” an important source of independent discussion and reviews.

It’s unlikely anything so dramatic will occur in the short term. As executives from Goodreads and Amazon told my colleague Laura Owen, the book network will remain for now a standalone site and the first goal of the merger is to “do no harm.”

The data and marketing insight Amazon receives from Goodreads is likely to strengthen the retailer’s already powerful position in book selling. The question of whether this will lead to an Amazon “monopoly” is another matter altogether. Under American rules on vertical integration, a company breaks antitrust laws only it obtains a dominant positions and abuses that position to harm consumers.

Turow and the Authors Guild have already been vociferous critics of Amazon. Last year, Turow accused the company of using discounting to “destroy bookselling.” More recently, the Guild joined with the Association of American Publishers to demand that Amazon be denied control over new internet suffixes “.book” and “.author.”