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Over the past couple years, major players like Google (NASDAQ: GOOG) and Amazon.com (NASDAQ: AMZN) have invested in the so-called "cloud." Basically, they are leveraging their huge infrastructures to provision services - like web hosting, storage and so on - to other companies. Actually, I know many startups that have such deals (helping to cut costs and get to market faster).

But what if you don't want to outsource this? Well, there is an alternative: Parascale. The company sells cloud software that you can install on your own servers.

As an indication of its power, Parascale has raised $11.37 million in a Series A round. The investors include Charles River Ventures and Menlo Ventures (both firms have extensive backgrounds in the storage area).

Parascale got its start four years ago. Interestingly enough, it hasn't been an easy journey. The original team had to get second mortgages and lines of credit to support operations.

But now, it looks like the timing is right. "With the explosion of digital content," said Sajai Krishnan, who is the CEO of Parascale CEO, "there is a need for more efficient storage systems."

The Parascale Cloud Storage (PCS) is built on widely followed standards as well as Linux servers. This makes it easier for customers to adapt the technology to their needs (which is not an easy thing to do with Google and Amazon.com).

No doubt, the storage marketplace has gone through several major shifts over the past twenty years. So, with cloud storage, it looks like we may be seeing another shift - and Parascale will now have the resources to become a leader in the space.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

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Amazon.com (NASDAQ: AMZN) shares are falling today after the company announced this morning that it has opened an office supplies division designed to compete with Staples Inc. (NASDAQ: SPLS) and the like. Evidently, investors aren't too excited by the Amazon's entry into this already struggling portion of the retail sector. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on AMZN.

After hitting a one-year high of $101.09 in October, the stock hit a one-year low of $61.20 in March. This morning, AMZN opened at $79.55. So far today the stock has hit a low of $77.63 and a high of $80.08. As of 12:30, AMZN is trading at $80.04, down $0.64 (-0.7%). The chart for AMZN looks bullish and steady, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.

For a bearish hedged play on this stock, I would consider an August bear-call credit spread above the $105 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in two months as long as AMZN is below $105 at August expiration. AMZN would have to rise by more than 30% before we would start to lose money. Learn more about this type of trade here.

AMZN hasn't been above $102 at all int he past year and has shown resistance around $85 recently. This trade could be risky if the company's earnings (due out on July 23) are a positive surprise, but even if that happens, this position could be protected by resistance AMZN might find just above $100, where it topped out twice back in late 2007.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in AMZN.

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Nokia (NYSE: NOK) has decided it would like to get beat up and spit out by the entertainment industry. It also thinks it can compete with Apple (NASDAQ: AAPL) in the content distribution business.

Nokia is the world's largest seller of handsets, with about 40% of the market. Since the margins on that business are being pushed down by lower price for phones sold in places like China and India, the firm needs somewhere else to turn for revenue. Hollywood, where budgets mean nothing, seems like a good choice.

According to The New York Times, Apple's lock on digital music could help Nokia. The paper writes, "Another possible advantage for Nokia is that music companies welcome a challenger to Apple. They are wary of Apple's growing power in digital music distribution."

But Apple is not the only problem. Dozens of companies from Amazon (NASDAQ: AMZN) to Sony (NYSE: SNE) are trying to get a piece of the portable entertainment pie. Most content is likely to be available to all distributors under some kind of contract. The large media companies have little reason to restrict themselves in exclusive deals.

The reason Nokia will probably never be a big "media" company is that a hundred other companies want the same thing. Everyone can't win.

Douglas A. McIntyre is an editor at 247wallst.com.

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This post is part of a series on some of the most memorable companies that have disappeared.

What goes up, must come down. It was a cute ad. Who knew it would turn out to be so prophetic?

Pets.com will go down in history as a textbook example of dot-com flame-out, going from IPO to liquidation in nine short months.

Founded in 1998, the company, which had the bright idea of selling pet food and supplies to the public via the internet, went public in February 2000 and raised $82.5 million.

The pet supplies e-tailer was the second Amazon.com-affiliated company to go public after an investment by the e-commerce giant, according to press accounts at the time. Online pharmacy and Amazon.com (NASDAQ: AMZN) affiliate Drugstore.com, launched in 1997, raised $90 million in an IPO in July of 2000 and saw its shares more than double on its first day of trading.

But Pets.com entered an already crowded field of online pet stores (PetSmart.com and PetStore.com were also up and running, among several others), and investors were starting to ask ugly questions such as, "How are you making money?" that they weren't asking in the late 1990s, when "irrational exuberance" ruled the day. The stock was ultimately a flop, with the price briefly hitting $14 a share before falling back to its opening price of $11.

By November of 2000, however, things had gone barking up the entirely wrong tree, and Pets.com filed for bankruptcy protection. Rival PetSmart.com acquired some of the company's assets, as well as its domain name.

In the end, the best thing about the company was its wildly popular sock puppet mascot. According to its Wikipedia entry, after the company closed, Hakan and Associates and Bar None Inc. purchased the rights to the sock puppet mascot under a joint venture called Sock Puppet LLC.

Drugstore.com (NASDAQ: DSCM) is still in operation.

Let us know in the comments what you miss about Pets.com. And be sure to check out other Companies That Have Vanished.

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This post is part of a series on some of the most memorable companies that have disappeared.

Back in the heady dot-com days of 1999, any parent who didn't want to brave the holiday season parking lots knew what to do: Get online and buy those Christmas presents at eToys.com. Unlike Toys-R-Us, which had recently gone online itself, eToys seemed to know what it was doing. It offered a vast array of toys at reasonable prices, and it got them to you on time as promised.

But by March 2001, you were back to the Toys-R-Us option -- by then allied with Amazon.com, and doing online retailing the right way. In the end, eToys proved no more durable than the Furby -- much sought-after, priced up by speculators and hype, only to ultimately end up in the backyard, broken and ignored.

eToys went up fast and crashed hard, (not unlike a pogo stick), and in many ways it remains a textbook example of the excesses and "irrational exuberance" of the dot-com era.

When it was launched in 1997 out of then-noted start-up incubator Idealab!, eToys was hyped as the next big thing, the new paradigm if you would, of the retail toy industry. And indeed since it had the competitive advantage of being the first to market, it easily attracted venture capital money. After a successful first Christmas season (relatively-speaking, that is; 1998 is considered the first year e-tailers racked up sales of any significance), it became the darling of the media and technorati. It went public in 1999 and saw its stock price triple, reaching a high of $85 in October of that year, giving it a market cap greater than the then 50-year-old market leader, Toys-R-Us.

The company poured money into inventory and infrastructure. Although the company didn't see as hefty sales as it would have liked its first few Christmas seasons, it's main rival, Toys-R-Us, saw a much bigger flop in its first forays into online retailing.

eToys also saw the bright future of content -- and in particular, parenting content. It bought BabyCenter.com in 1999, with the aim of tapping into that site's huge online community of parents.

There were some high-profile gaffes of its own, however. That same year, after being savaged in the press and online, eToys backed away from its lawsuit against the European artists' site of almost the same name (etoy, all in lowercase). It had sued the art group for its domain name, although the group had held it for years.

But like so many high-flying internet start-ups, eToys was blindsided by realities of retail. It bought much more inventory than it moved. In 2000 it spent some $72 million on advertising and marketing, trying to drum up customers, and although its online sales were growing, they weren't enough to address its tremendous debt. Christmas sales in 2000 were only $120 million, far less than the $210 million it had forcecast. It was hemorrhaging money at that point, and in 2001 it sold Babycenter to Johnson & Johnson (NYSE: JNJ) for a mere $10 million.

When its arch rival Toys-R-Us hooked up with mighty Amazon.com (NASDAQ: AMZN) the writing was on the wall. eToys filed for bankruptcy in March of 2001, citing debt of $247 million.

eToys went dark, but went live again in October, 2001 as a subsidiary of KB Toys. Today, eToys Direct, as it is now called, is owned by hedge fund D.E. Shaw, as part of (aptly-named) Parent Company, a content and e-commerce umbrella group focusing on the parenting market.

Let us know in the comments what you miss about eToys. And be sure to check out other Companies That Have Vanished.

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Do you like auctions? Personally, I don't. Sure, the stock market is essentially an auction, but it's an auction without a lot of noise (at least on my end). Anyway, this brings me to a BusinessWeek piece on eBay (NASDAQ: EBAY) and its evolution. It looks like auctions are no more fit to survive than the dinosaurs were. Research overwhelmingly shows that users of the most famous online auction destination in the world would rather pay a fixed price for an item than haggle over it like a frantic trader at a busy bazaar.

Now, as one commenter made clear in the article, this changes the essential gene structure of eBay's DNA. But is mutation necessarily bad in this case? Not to my way of thinking. To be honest, I haven't done any eBaying directly; I usually use a friend to acquire an item for me if I'm looking for something. Not only am I too lazy to open an account, but I dread having to play the auction game. Why put up with such nuisance? When I want to buy something, I don't want to compete and see values change. Think about it: when you go to Wal-Mart (NYSE: WMT), do you want to barter over a bar of soap?

Okay, so we're not talking about bars of soap. We're talking about items that, to be fair, do lend themselves to the auction motif. Comic books, autographed photos, rare recordings, and so forth, are definitely fair game for the electronic gavel. Still, it's annoying. Wouldn't you rather know that a rare copy of The Texas Chainsaw Massacre for the Atari 2600 is $200, take it or leave it, and that you didn't need to get down in the pits to start bidding for it?

Maybe I'm exaggerating the kind of frustration that can be encountered on eBay. But it seems like management is willing to bet on a future sans auctions. Actually, it's not so much that they're willing to make a bet on this thesis on their own volition; simply put, the numbers are compelling. People want more of an Amazon (NASDAQ: AMZN) type of experience. They want to simply click, buy, and wait for the item to arrive on their doorstep.

Personally, I think this kind of paradigm shift stands a great chance of being a net positive for eBay. Yes, many sellers will flee; others, however, will take their place. Besides, I've oftentimes noticed that many auctions never have much bid history to them; that isn't an observation based on any scientific collection, but nevertheless, it is one of the reasons why I would support management in reducing exposure to auctions. Shareholders actually should want to see management focus more on the fee structures in place, as many sellers believe there is an inequity when it comes to them.

That's the larger opportunity, and the more important one. Auctions will always remain applicable for many items on eBay (imagine how traders would feel if they didn't have eBay to auction off the next PlayStation iteration!), but if they only comprise a small percentage of revenues, it won't make a difference so long as fixed-price selling becomes the norm.

Disclosure: I don't own shares of any company mentioned here; positions can change at any time.

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Netezza Corporation (NYSE: NZ) provides data warehouse appliances. The company's Netezza Performance Server integrates database, server, and storage platforms in a purpose-built unit to enable detailed queries and analyses of stored data. The firm serves data-intensive enterprises in telecommunications, e-business, retailing, financial services, analytic services and healthcare. Amazon.com (NASDAQ: AMZN) is a major customer. IBM (NYSE: IBM) and Oracle (NASDAQ: ORCL) are competitors.

Netezza surprised the Street last week, when it reported Q1 EPS of three cents and revenues of $39.6 million. Analysts had been expecting two cents and $36.2 million. Management also guided FY09 revenues to $172 million, versus consensus of $166.65 million. Needham subsequently reiterated its "buy" rating on the issue.

NZ shares popped on the earnings news and then moved into a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Altogether, brokers now recommend the stock with two "strong buys," four "buys" and two "holds." Analysts see a 33% growth rate, through the next five years. The NZ Sales Growth rate (56.52% y/y), EPS Growth rate (-0.44 to +0.03 y/y) and Return on Equity (17.88%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 43% of the outstanding shares. Since going public last July, the stock has traded between $7.02 and $17.57. A stop-loss of $11.40 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.

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I've got to be honest, I wasn't so sure that Amazon's (NASDAQ: AMZN) Kindle device would be a hit. But, according to BusinessWeek, it seems like it's doing okay. Kindle, which is a reading platform for e-books, actually experienced sell-outs after it was launched last fall. And now, CBS's (NYSE: CBS) Simon & Schuster has upped its support of the platform by increasing the number of titles from its portfolio to be sold on Kindle. How does 5,000 more titles from Simon & Schuster sound?

Just great, I'm sure Jeff Bezos would say. And who can blame him? It looks like people are really taking to Kindle, and although I don't think reading books for pleasure in such an electronic manner will ever come remotely close to challenging printed tomes, I know it's still important for Amazon to have a strategy in this arena. And like I mentioned at the beginning, the fact that Kindle seems to have had a strong start is very impressive.

It should be noted, though, that Bezos is keeping sales figures close to the vest. He doesn't want to give away too much in terms of stats, so who knows exactly how well the Kindle brand is doing. But the device received a price cut last week, and that is an interesting little tell in terms of the viability of the technology. In fact, one friend of mine is hoping the price continues to drop below $349 because he is bullish on buying one. I never thought I'd hear anyone in my circle even mention this thing in casual conversation.

While the Simon & Schuster vote of confidence shows that Amazon is on the right track with the Kindle, I still am reticent about its ultimate future. I see the platform as more of a showcase for shorter technical documents that don't need to be stored in print format to be fully enjoyed. Also, short stories and/or novellas that might be hard to place in literary markets also would be of great value to Kindle.

Jeff Bezos has got an interesting technological experiment on his hands, and while I know that I will always read novels the old-fashioned way, I'm willing to bet Kindle still has at least some growth ahead of it.

Disclosure: I don't own shares in any company mentioned here; positions can change at any time.

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The White House is in overdrive promoting former press secretary Scott McClellan's What Happened. That promotion has helped drive it to the number one selling position on Amazon.com (NASDAQ: AMZN). While Amazon will benefit from the sales of the book, the stock is more than fairly valued.

The White House's promotion is based on its passionate response to the confirmation bias it demonstrated in the run up to the Iraq war. As I wrote in this Business Strategy Review article, confirmation bias is when facing a major decision, one exhibits an unwillingness to admit conflicting data - no matter how salient - to influence a closed point of view. Mclellan points out that the White House decided to go to war against Iraq a year before its start and manufactured a false "case" to sell it.

McClellan pointing this out is hardly news. But I thought his comments about George W. Bush's cocaine use, as reported by 6abc.com, were more revealing. Recalling a 1999 conversation with Bush, McClellan writes: "'The media won't let go of these ridiculous cocaine rumors,' I heard Bush say. 'You know, the truth is I honestly don't remember whether I tried it or not. We had some pretty wild parties back in the day, and I just don't remember.'

And yet, McClellan concludes, "I think he meant what he said in that conversation about cocaine. It's the first time when I felt I was witnessing Bush convincing himself to believe something that probably was not true, and that, deep down, he knew was not true. And his reason for doing so is fairly obvious political convenience."

The White House is helping McClellan tremendously. By attacking him personally -- making remarks about how "sad" it is to see this book from "not the Scott I know" -- it reinforces the fundamental truth of McClellan's text. After all, if the book was wrong, there would be ample grounds for a slander lawsuit and the White House would release information that would handily disprove what McClellan is saying. But its personal attacks on McClellan reveal the weakness of its position.

And with McClellan's book at the top of Amazon's list it made me wonder whether investors can share in McClellan's good fortune by buying Amazon stock. Its shares have risen 18% in the last year. But it trades at a Price/Earnings to Growth ratio (PEG) of 1.7 -- with a P/E of 67.5 on earnings forecast to grow 41% to $2.12 in 2009.

This is a very successful company that will be made even more successful thanks to McClellan's book. But it looks like its stock price reflects that future growth -- and then some.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Amazon stock.

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