<edited to remove the unintended snarky tone and clean up some points>

What I got from this blog post is that they made an uninformed decision, and ended up with an unexpected result that pissed them off from the perspective of "lost sales".

The email from Amazon clarified there were no money to made and sure enough, no money was made.

The added costs of the server is unfortunate and justifiably something to be upset about (especially if you weren't accounting for it), but I have to point out that the sales before the free-app-of-the-day listing[1] were slow: 2, 4, 14, 20 sales... then 101k copies given away in one day.

For an app selling 10-20 copies a day, how much would it have cost that company, paying a PR firm, to get it infront of 101k new users (forget about payment)... how many tweets would you have to get out or blog posts written to make 101k people aware of your app?

Amazon gave that company an incredibly aggressive marketing campaign for 1 day and from where I'm standing, gave that company an enormous opportunity to be successful with a future app or future subscription services for their existing app.

I think things like what Amazon are doing certainly don't fit in the old model of software sales and if you are betting the company on that model, it is going to be a painful trip for you.

Something to consider is that if this app offered a subscription-based premium mode or some in-app micro transactions and just 5% of people that downloaded the app engaged in that, I think the tone of this entire blog post would have been completely flipped about how awesome the Amazon model is. Even if that app could simply be used to announce the release of a new app in the app store from the same company when the time comes that would be a huge amount of people seeing that announcement that would not have otherwise seen it (not the full 100k, but whoever is still using the app).

Given that, I would assert that the Amazon App Store model isn't broken, it is just different and requires some planning to take advantage of.

If you have a flexible business model and can roll with the punches and take advantage of opportunities like these and see them coming you stand to benefit quite a bit from Amazon's free app of the day.

Let's say everything I've typed up until now is garbage and you waved it all away, another reason this was a good thing for the company: reviews.

Out of 101k people that now have this app, how many are going to eventually leave reviews? 20? 30?

How many reviews may be a half to a full star higher because the app was free and there isn't that feeling of being owed value by the reviewer because they got your app for free.

So now let's say in a few weeks (or at some point in the future) this company now has 15, 20 or 30 reviews on this app, all fairly good (4 and above).

Now that the app is no longer free, how much higher in the search results is this app going to show up for people when they are searching for apps like this? How much more likely are people browsing the Amazon App Store to buy this app because it has such good reviews?

I would argue had this guy listened to his co-founder and not flown off the handle, and left his app in the app store, and built off of this success he would have seen sales gradually increase over time, similar to how it was trending before they had the one day give away. All those sales before the give away were people finding the app because (I assume) they wanted an app like that.

The one day give away was likely a bunch of people that just grab every free app they see each day.

Either way, it sounds like he took the gift horse he was given by Amazon, punched it in the horse-face and then let it run off a cliff because it wasn't the exact horse they were expecting.

</end-backseat-internet-business-driving>

[1] http://shiftyjelly.files.wordpress.com/2011/08/results2.png?...