There’s a writeup in Businessweek about how Jeff Bezos has a “risky bet” going on with Amazon — how they’ve spent hundreds of millions of dollars on R&D that has yet to pay off, while the “core” business seems to be flagging with questionable marketing strategies (no advertising, free shipping).

What’s really, really fascinating — and important — is what that R&D is going into.

While the rest of the blogosphere, startups, and their hommies rap on about the explosion of web services — some of which may or may not exist, and some may or may not make money, even now — Mr. Bezos has quietly gone about creating a “WebOS”.

That’s right. He’s taken the nuts and bolts behind Amazon’s engine, and has created systems that are easily packaged and used by engineers and programmers to make web applications.

Building scalable and efficient code is hard; Amazon is going to make it easy – while making a buck in the process.

If you’ve ignored this ol’ web1.0 warhorse (I’m guilty, too!), get ready, because I predict its about to leap right into the web2.0 fray in the most amazing way.

The earliest evidence of that was S3, “Simple Storage Services” — which was probably the first attempt at Amazon tipping their hand to this paradigm. Its a way for companies to store data, whether it be video, images, or what have you at a pay-as-you-go pricing program that any teenager could understand.

There are much more qualified and meaningful discussions by people who do this stuff for a living. In particular, I would point you out to Read/Write Web’s for an explanation of how Amazon’s Service Stack is going to tackle all the dimensions of Web Services [you've got to give a hand to Alex; he called it two months ago!]

The bottom line should be important enough for even blogging monkeys like me to understand — while we’re yammering on about whether Google/Youtube should or shouldn’t be sued, distracted by Mark Cuban’s latest rants/antics, or goggling at the latest travails of MySpace, Jeff Bezos is up to something really important.

Like building the infrastructure for the next level of web2.0 services.

And the best part is — investors don’t really understand what the fooferah and kerfuffle is, so they’re downgrading their recommendations.

Look for the hype to grow on this folks; I suspect though, most of it will be warranted this time.