Not wishing to pay shipping and storage charges on potentially slow-selling consumer goods, retailers have cut back, awaiting better economic news.

BBC: Trucking industry faces world of woes

More important, the growing competition from Amazon is based on a different business model entirely: Amazon can sell products so cheaply because it uses its other profitable units such as cloud data storage and fees it charges others to sell on its website to subsidize the rest of its business.

WSJ: Showdown Over 'Showrooming'

Amazon charges 15 cents for a gigabyte of storage and 10 cents an hour for a server, services that customers say are up to 90% cheaper than rental alternatives from computer-hosting companies like Equinix and Rackspace.

FORBES: Magazine Article

Amazon charges 15 cents for a gigabyte of storage and 10 cents an hour for a server, services that customers say are up to 90% cheaper than rental alternatives from computer-hosting companies like Equinix (nasdaq: EQIX - news - people ) and Rackspace.

FORBES: The Death of Hardware

Mr Dotcom's lawyers deny the charges saying the site simply offered an online storage service and that the majority of its traffic was "legitimate".

BBC: Kim Dotcom

Mr Dotcom's lawyers reject the charges, saying the site simply offered an online storage service and that the majority of its traffic was "legitimate".

BBC: Megaupload case: US prosecutors win evidence appeal

Amazon, he notes, charges about 12 cents a gig per month for data storage.

FORBES: CES: EMC's Iomega Pushing 'The Personal Cloud'

Dotcom is clever and MEGA is designed both to compete with cloud storage giants like Dropbox, Google Drive, and RapidShare and also to insulate itself from future charges.

FORBES: Kim Dotcom's New MEGA Encrypted Cloud Storage: See No Evil, Store No Evil