Amazon will host your e-commerce site free

A little birdie from Seattle dropped this bombshell in my ear this morning, but I still didn't believe until I saw it here with my own eyes.

That's right, Amazon is offering free Web hosting of your e-commerce bookstore. Or you can sell any other kind of merchandise except the usual prohibited stuff like firearms and pornography.

Amazon hasn't announced this program yet. It's still in beta, but you can sign up here.

I've got to admit, I never saw this coming. It's a bold move by Amazon, and a huge counterpunch to eBay's Stores program, which costs at least $14.95. The barriers to entry to e-commerce are just about gone now. The only remaining obstacles for Joe Six-Pack having his own Web store are monthly hosting fees and the hassle of getting your own domain. With this offer, Amazon eliminates both those headaches for you -- you just give them the name of your company and the URL you want to use.

And not only that, Amazon will collect the payments for you, so no need for you to fiddle with PayPal or paying a big application fee for your own credit-card merchant account.

Believe it or not, it gets even better: Amazon is thinking about offering to warehouse and ship your goods too. My understanding is this part of the program hasn't been finalized, but it's part of the plan.

Looks like Amazon is targeting every kind of merchant under the sun, not just booksellers. Here's one of the pilot stores, a Web site that sells waterproof bedding. Other pilot stores are selling coffee, auto accessories, flowers -- a big variety.

Now this program won't automatically generate traffic to your e-commerce site -- that's still your job. But here's the great thing about it: Say a visitor to your site buys your item. During the checkout process, they see related merchandise from another Amazon seller. You can get an affiliate commission (probably about 6.5 percent) on that additional sale. To get these additional commission, you'll need to sign up for Amazon's Associates Program separately.

One more thing: The word I hear is that Amazon will tie this new program into its plans for pay-per-click advertising. In other words, if you're paying Google to bring in customers using Adwords, Amazon is going to go after that business too.

So Amazon isn't just trying to one-up eBay here, it's trying to outdo Google too. Awesome!