The company's customer base grew by over a million during the last three months, which has also seen Amazon.com move into the music business and expand into Europe.

In just one year, Amazon.com has increased the number of its customers by 377%.

Amazon.com has also become the leading online music retailer only five months after entering the market.

Music sales for the third quarter were $14.4m, with classical music launched in September.

Jeff Bezos, chief executive of Amazon.com, said:

"We are very grateful to our customers for choosing Amazon.com as their online music store so quickly."

Rival online music retailers CDNow and N2K have responded to Amazon.com's success by merging last week.

Still making losses

The company's sold $153m worth of books in the last three months, as compared to $38m in the same period last year.

But it lost $45m for that period, compared to $9m last year.

Nevertheless, Amazon.com's chief financial officer said that the company was making steady progress towards profitability

Mergers and acquisitions accounted for a substantial proportion of the loss, at around $20m.

Amazon.com has bought Bookpages in the UK, and more recently acquired Junglee, the leading provider of retail search software, and PlanetAll, an Internet-based address book and reminder service.

The company sells its products on 140,000 associated web sites.

The losses were less than the market was expecting.

Amazon.com stock rose nearly $2 to $119 in late trading, still below its high of nearly $140 this summer, which valued the company at nearly $2bn.