Gloves come off in Apple vs. Amazon

Apple is certainly the biggest music/tech company around, but Amazon has been very clear in its intention to up the stakes in the fight with the company – and today, it threw a haymaker. Gaga-born this way

Amazon is offering a daily special for Lady Gaga’s “Born This Way,” offering the entire album as a digital download for 99 cents. That’s less than the cost of a single track on iTunes.

In the big picture, it’s a short-term nuisance for Apple, which will almost certainly still see massive revenues from the digital sale of the CD. However, Amazon’s using this promotion to drive traffic to its Cloud Drive online storage program. (Buyers are encouraged to store their music there – and by buying the under-a-buck CD, their account is automatically upgraded to a 20 GB tier.

Why is that important? Amazon is already fighting Google for users in its cloud storage system – and Apple’s entry in the field is seemingly imminent. Promotions like this give Amazon the chance to establish a customer base before the other services get a foothold.

Cloud storage sites traditionally have been like email accounts for users – once they have taken the time to set up the service and use it a few times (or, in this example, have loaded their files to one), they quickly become embedded and are less likely jump to a competing one.