I've been thinking for a while that Amazon's biggest advantage (in terms of direct revenue) over regular bookstores is advertising and other B2B activities. Unlike brick and mortar stores, which only have so much space for co-op deals, Amazon can sell an almost infinite amount in co-op like advantages: extra content for each book on the site, search campaign advertisements, email blasts, and more. I think maybe advertising is already their knockout punch-- and they will continue to explore new ways to leverage their space and bring down product costs for the end consumer.