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Amazon.com could be profitable if it wanted to, or if investors demanded it, investment bank Goldman Sachs has claimed in a report published this morning. The GS report will no doubt come as a surprise to many -- Amazon is one of the e-conomy's most notorious loss makers, having consistently failed to report anything near a profit since its much-heralded IPO, despite regular strong revenue growth. Indeed, over the last few quarters the company has been warning that its losses will increase significantly. The reason, it claims, is its ongoing expansion into bother, broader markets than the book retailing operation that made its name. But therein lies the key, reckons GS analyst Anthony Noto, cited by Reuters. Amazon's spread of online stores is now such that it can afford to satisfy itself with the number two, three or four positions in each sector, and focus on making money rather than dominating the market. So if Barnes and Noble sells more books that Amazon, it doesn't matter because it's home improvement, consumer electronics, toys, music and video sales will leave it better off in the long run. This approach would bring Amazon over $10 billion in revenue over the next five years, Noto reckons. As the company's strategy currently stands, it will lose $1.12 per share for the current financial year, according to GS estimates, and $1.20 per share in fiscal 2000. Whatever it does, Amazon should go into the black in 2002, Noto's report claims. The question is, given what else he claims, will Amazon's shareholders want to wait that long? ®

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