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Last Updated: Thursday, 1 February 2007, 22:18 GMT
Investment dents Amazon profits
Amazon remains highly popular even though margins have fallen
Online retailer Amazon sees quarterly profits halve, after higher taxes and investment over the holiday period.

Net income fell to $98m (49m) in the three months to 31 December from $199m a year earlier, but sales rose 34%.

Though lower, profits beat expectations and the firm posted stronger than expected annual forecasts, sending shares 6% higher in after-hours trade.

Amazon has invested heavily to expand beyond books, but this has eaten into profit margins in recent months.

Amazon said revenue would be between $13bn to $13.7bn for this year, above analyst expectations.

The firm has seen its margins decline as it has invested in improving its technology and website recently, but it still remains highly popular - ranking second only to auction site eBay.

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