Who Can Rival Amazon?

Recently my friend Mike Shatzkin asked me to participate in a panel on Amazon at Digital Book World. Mike asked all the panelists a question that I want to attempt to answer at greater length than I was able to at the conference. The question was in two parts: first, how much more market share can Amazon amass before it slows down or is stopped? Second, who can put together a meaningful merchandising service that could take share from Amazon?