Not all books for Kindle include DRM — Amazon leaves it up to the publisher to decide whether or not they would like to protect their content. It is likely the company will rush to patch the hole opened by the hacker, although it was not immediately responding to requests for comment Wednesday.

The hack was developed as an entry to a contest on hacking.org.il, where participants were tasked with finding a way to open up the AZW format to allow it to be read on other devices. The hack took about eight days for Labba to complete. The hack is actually an application that is installed onto the device, which then converts the files to the mobi format. Be forwarned though that Amazon has apparently already pushed out code for the Kindle that breaks these scripts, although it is reported it does not auto-update the device.

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The botnet was a Zeus bot (Zbot) variant. The Zeus trojan is a  program that criminals use to gather personal and financial data from its victims.

Hackers that create trojans such as Zeus are becoming increasingly organized and function like corporations, according to a security recent report published by Microsoft. That structure enables regular malware release schedules, and gives criminals the ability to exploit complex vulnerabilities in software–even as operating systems become more secure.

Law enforcement has made some progress toward shutting down the data centers that criminals use to host their infrastructure, but the crooks are seemingly one step ahead, and have now migrated to Web-based services. IDG reports that unnamed law enforcement officials have begun to worry that stolen credit cards could be used to purchase cloud computing services such as AWS.

That’s a given. I hope that cloud providers take action to discover malware on their server, and have the capacity to shut it down before serious damage can be done. They have a responsibility to do so.

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PayPhrase won’t be limited to just the online retailer. It plans to offer the service to other retailers as well. So far DKNY, Jockey, Patagonia, Buy.com, J&R, and Car-Toys have signed on with the service. Other sites that use Checkout by Amazon would also be able to employ the PayPhrase service, it said.

The nation’s largest online retailer sees this as a big boon for the holidays, where speed is a benefit for shoppers with long Christmas lists.

Is Amazon on to something however with PayPhrase? I think so. Even online methods of payment like PayPal still require several steps to complete a transaction. This requires only two steps: entering the phrase, click, enter PIN, click, done. You can’t get much easier than that while still staying secure.

What remains to be seen however is whether Amazon can drum up more support for this platform. Besides itself, the only other partner with significant market share is Buy.com: that’s way too little reach. If it can manage to snag say two or three more big name partners, PayPhrase may become the next big thing in online payments.

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An Amazon that owned Netflix would get the opportunity to market digital downloads to all those happy Netflix customers; a Netflix that was part of Amazon would have access to Amazon’s ambitious video-on-demand platform and content deals. It would probably leave both companies and their customers better off—and hey, it give Apple an iTunes Store competitor that was that much larger and stronger.

I’m just a customer of Amazon and Netflix, not a shareholder. But if mergers were voted on by shoppers, I’d give this one my stamp of approval. Even if it’s not really under discussion at the moment, it feels sort of inevitable…

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Following in the footsteps of CDBaby, but with a crucial difference, TuneCore and Amazon will launch an on-demand CD printing service, Wired’s Eliot Van Buskirk reports. The musician pays $31 per year for printing, labeling and delivery of a 10-track CD. Amazon sells the CDs for $8.98 each and keeps 60 percent. The rest goes to the musician.

In terms of keeping a low barrier to entry, CDBaby and TuneCore’s services are fairly similar — I could break down the differences in price and process, but I’m sure things will change once the two companies start competing. The real distinction is the muscle TuneCore brings to the table. Buskirk notes that Trent Reznor, Keith Richards and Joan Jett are already clients of TuneCore for other digitial distribution services, and they’ll likely be itching for yet another way to escape the major labels. With TuneCore, they only have to sell nine CDs each to break a profit, and they keep all the rights to their music.

Not that online printing is without drawbacks for consumers: The immediacy of purchasing a CD in a store is absent, and so is the chance to own something with elaborate packaging, as TuneCore’s liner note options are a fairly standard set of sleeves and inserts. Buskirk also raises the issue of selling CDs at a concert, but I don’t see why the band itself couldn’t order a thousand copies and sell them for a premium at the show.

Paramount to all this nitty-gritty is the not-so-novel idea that the music business as a whole is decentralizing. The cleverest musicians, big and small, are finding ways to advertise and sell products without major labels. Meanwhile, entrepreneurs are capitalizing in spaces where the music industry was too big, dumb and slow to venture.

These monoliths will shrink, and companies like TuneCore will be the catalysts.

Update: So we’re all clear, TuneCore’s Peter Wells, who comments below, breaks the pricing down in an e-mail as 19.98 for a year of maintenance and storage of the physical CD, plus 99 cents per song, plus a flat fee of 99 cents to sell the album through Amazon, totalling roughly $31. An extra dollar distributes the song to iTunes as a digital download.

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I have argued that Twitter is overhyped, but I acknowledge Twittering as an activity will continue to be influential on how people use the Web. In response to that activity, Amazon created its URL shortening service to generate URLs for its products without having to use third party services such as TinyURL.

It makes perfect sense for Amazon to do this, because some sites, including Yahoo’s forums, prohibit URLs from the TinyURL domain. Amazon’s URLs are unlikely to be blocked, because there has to be a product behind the shortcut as a requirement.

Amazon’s shortened URLs are generated when a user takes an product identification number and pastes it after “amzn.com/’.”

TechFlash has reported that customers may use ASIN numbers (Amazon Standard Identification Number), book ISBN numbers, or Wishlist ID numbers. That kind of control makes Amazon’s URLs safer than ones that are provided by third party services.

This was a very smart move on Amazon’s part. It is making it easier for companies that sell products through its e-commerce site to promote their products, and it will increase search engine exposure for products by associating then with a single URL. While this service is intriguing, Amazon isn’t the first, nor will it be the last to leverage new trends in technology.

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Happy Monday morning, Technologizer pals:

Is Amazon’s newest a King-le?

iPhone could become a Kindle.

Two e-book events happnening today.

Triple-core chips from AMD.

The Dalai Lama joins Twitter.

Hey, Woz is going dancing.

Some Apple Stores ban Facebook.

Amazon’s cheapo BlackBerry Storm deal.

Digital TV boxes getting scarce.

Microsoft preps new phone services.

Judge hands Psystar a victory.

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Amazon has launched an initiative called Frustration-Free Packaging, which involves selling products in packaging that eliminates those indestructible blisterpacks and scissors-destroying plastic ties. The initial lineup of offerings includes a bunch of toys, but also some electronics products, including a Microsoft mouse and Transcend memory cards.

The company says that an added benefit of the frustration-free packaging is that it’s more environment-friendly. That makes sense: I can’t imagine the world really needs all that plastic packaging, when cardboard and paper (which is what the Frustration-Free Packaging involves) will do.

The plasticky stuff–from now on I’ll think of it as Frustration-Filled Packaging–is meant to discourage shoplifters, so it was always pretty silly that customers of a Web-based merchant like Amazon had to deal with it in the first place.

I’d love to see brick-and-mortar retailers jump on this bandwagon. While we’re at it, could they do something about the pointless and insulting anti-shoplifting procedures involving a guy at the door who glances at your receipt and pretends to examine the products in your shopping bag?

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That’s because traditional Netflix offers more than a hundred thousand titles, while Netflix Watch Instantly includes only about a tenth as many. Netflix’s own promotion for the Internet-based service stresses that it offers a “separate, smaller” selection of content, and that it includes “very few” new releases. (When was the last time you heard any company use the word “few” when discussing the choice it offers?)

You can’t blame Netflix for the skimpy selection–Hollywood just remains incredibly backwards when it comes to licensing movie and TV content for Internet distribution. And even though some other purveyors of Net-based video have a lot more stuff than Netflix Watch Instantly, including new releases, nobody offers what you really want: A service as comprehensive as traditional Netflix that lets you watch everything instantly on every digital device you own.

After the jump, a quick look at some of the major competitors.

Amazon Video on Demand

What’s available? 40,000+ items including movies and TV episodes.
Where is it available? PCs and Macs, TiVo, streamable via media adapters and Xbox 360s, portable media centers, Sony Bravia Internet Link.
Is any of it in HD? No, not yet.
How much does it cost? All over the map, but movie rentals start at 99 cents and TV purchases are $1.99 (but with steep discounts for season purchases).
Random thoughts: Amazon’s obviously serious about video on demand. HD would be nice, though–and the range of pricing policies and different time windows for different rentals is kinda confusing.

Apple iTunes Store

What’s available? 30,000+ items including 2500+ movies and 30,000 TV episodes.
Where is it available? PCs and Macs, iPods, iPhones, Apple TV.
Is any of it in HD? Yep–600 movies and an unspecified number of TV episodes from all the major broadcast networks.
How much does it cost? TV purchases are $1.99; movie purchases start at $9.99; new movie rentals are $3.99 to rent ($4.99 for HD); older titles are $2.99 ($3.99 for HD).
Random thoughts: Steve Jobs may still claim that TV is a mere hobby for Apple, but the company’s done a good job of lining up content and has aggressively jumped into HD–and having a monopoly on distributing it to iPods and iPhones doesn’t hurt. It also comes as close as anyone to having easy-to-understand pricing and rental policies.

CinemaNow

What’s available? 2270 movies to purchase; 1199 movies to rent; 130 TV series to buy.
Where is it available? PCs, Archos and Samsung media players, HP MediaSmart devices, various set-top boxes. Can be burned to DVD with Qflix DVD burners.
Is any of it in HD? Yes, but only 69 episodes of TV series such as HDNet World Report and Roy Firestone Face2Face.
How much does it cost? Typically $9.99 to $19.99 to buy; $3.99 to rent; $8.99 to $14.99 to burn to DVD. $29.95 a month subscription plan features only titles from non-major studios and “mature” titles.
Random thoughts: CinemaNow was one of the first outfits to sell movies over the Internet, but it hasn’t changed much with the times.

Netflix Watch Instantly

What’s available: 10,000+ items including movies and TV shows.
Where is it available? PCs, Netflix Player by Roku, LG and Samsung Blu-Ray players; Mac and TiVo in the works.
Is any of it in HD? No, not yet.
How much does it cost? Included in the cost of a monthly Netflix subscription, starting at $8.99 a month (or $4.99 for a plan that includes only 2 hours of viewing).
Random thoughts: A complement to Netflix’s DVD rental biz rather than a standalone service, especially since it’s mostly older stuff rather than new releases–but a nifty one.

Movielink

What’s available? 5500 movies and TV episodes for purchase; 2300 to rent.
Where is it available? Windows Vista and Media Center PCs; streamable to TVs via media adapters and Xbox 360; AT&T HomeZone set-top box.
Is any of it in HD? A few TV documentaries.
How much does it cost? $1.99 and up to buy; 99 cents and up to rent.
Random thoughts: Like CinemaNow, a pioneer that’s fallen behind the times.

Vudu

What’s available? 10,000+ items including 6600+ movies and 51 TV series.
Where is it available? On Vudu’s box, which starts at $299.
Is any of it in HD? Yes, 634 items in HD and 119 in super high-res HDX.
How much does it cost? Rentals are 99 cents to $5.99; purchases are $4.99 to $24.99.
Random thoughts: This is the only service here that requires you to buy a fairly pricey dedicated box–albeit a nicely-designed box with a very slick remote–to do anything at all.

Anybody using any of these? Am I being too harsh when I say that they all fall short of plain old fashioned snail-mail Netflix? I’d love to hear your thoughts, pro or con.

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Winfrey says the device “was life-changing” and is “the wave of the future.” With her influential book club, which have turned many an author into overnight success stories, Oprah brings a large consumer base into Amazon’s waiting open arms.

At $359 the Kindle is still expensive for most — Oprah even admitted as much during the show, which also featured Amazon CEO Jeff Bezos. But with Oprah’s star power behind it, the device now has the opportunity to move out of cult favorite and into the mainstream

The appearance of the device on the show did not come without a promotion. By entering the code “OPRAHWINFREY” at checkout, a $50 discount on the device will be provided. For those on the fence, here’s your reason to jump in.

How big is this for Amazon? In my opinion, very. This essentially gives the device the kind of publicity it needs in order to survive. It also puts pressure on Sony, who now must try to match Amazon’s move. A deal with Martha Stewart, anyone?

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