Amazon's Less Is More

With its stock price soaring after saying it would lay off spending on new technology, Amazon.com(AMZN Quote) is now pushing the envelope even further.

The company is pioneering new ways to make money out of its previous spending, as it steps up efforts to pitch its new Web-services offerings.

Amazon is now putting its muscle behind Simple Storage Service (S3), which sells empty space on the company's sea of servers, and its Elastic Compute Cloud 2 (EC2) platform, which sells the latent computing power in the company's technology grid. CEO Jeff Bezos took the stage at the hugely popular Web 2.0 conference in San Francisco last week to plug the service.

The move marks a significant turning point for Amazon. Not only is it turning away from investing in new technology toward finding new ways to make money off past investments, it's also moving from fumbling with novel, potentially high-profit products last quarter back to its roots as a retailer of low-margin, mass-market items.

While Amazon's push into Web services is innovative from a product standpoint, it's not as technologically ambitious as its Unbox film-downloading system, which was riddled with technical glitches in its debut last quarter, or A9, the company's attempt at a cutting-edge search engine, which was scrapped during the quarter as well.