Amazon posts lower profits as competition grows

• 
  Antony Savvas
• Published: 26 Oct 2005 12:32

Amazon.com has posted a quarterly profit fall in the face of stiffer competition.

Amazon said net profit had dropped to $30m (£18m) compared to $54m for the same quarter last year. Sales rose to $1.9bn from $1.5bn a year ago.

Amazon’s share price dropped 1.62% following the results, as analysts became worried about increasingly squeezed profit margins at the company.

They are also concerned about a lack of further product differentiation as competitors move into the on-line markets Amazon helped to establish.

UK competitors like Play.com have impacted on Amazon’s sales here with completely postage-free services, while Amazon only offers free postage on higher value sales.