June 5 (Bloomberg) -- Amazon.com Inc., the world's biggest online retailer, will raise spending on its money-losing unit in China to bolster sales in the largest Web market behind the U.S.

The shares closed at a seven-year high after Brian Pitz, an analyst at Banc of America Securities, separately raised his stock-price forecast to $79 from $62.

The Chinese Web site, renamed Joyo Amazon.cn today, is the company's fastest growing by sales, Chief Executive Officer Jeff Bezos told reporters in Beijing, without providing figures. Amazon bought the Beijing-based unit formerly known as Joyo.com Ltd. for $75 million in 2004.

``With something growing this fast and doing this well, as far as investment goes, we would like to double down,'' Bezos said. ``Double down is a term used in backgammon, which means when you like the odds, you want to increase the investment.''

New products and markets helped Seattle-based Amazon, founded by Bezos in 1994, raise earnings estimates for this year. The company will increase spending in China on warehouses, bicycle couriers and inventory to boost sales of products including books, watches, electronics and makeup, Bezos said.

In the first quarter, Joyo ranked second in the local online retail market with a 12 percent share, behind Dangdang.com, with 18 percent, according to Beijing-based researcher Analysys International. Sales in China's electronic commerce market may more than triple to 18.83 billion yuan ($2.5 billion) in 2010, from 5 billion yuan in 2006, the research firm said.

Price Increased

Banc of America's Pitz said today that Amazon will boost earnings by slowing technology spending and selling more digital content. Pitz rates the company's shares ``buy.''

Amazon said last month it will offer music downloads from record companies such as EMI Group Plc this year without software that restricts how customers can play the songs.

Shares of Amazon.com rose $3.23, or 4.6 percent, to $73.65 at 4:16 p.m. in Nasdaq Stock Market composite trading today, its highest close since February 2000. The stock has more than doubled in the past year.

Same-day deliveries are available in Beijing, Shanghai and Guangzhou, where Amazon's warehouses are situated. The company allows cash-on-delivery payment in more than 330 Chinese cities, where most packages are sent by bicycle to speed up delivery in congested areas.

Cash Payment

Customers use that payment method for more than 70 percent of orders because credit card usage is not widespread, said Wang Hanhua, president of the Chinese unit. Amazon is ``actively looking at how to take advantage'' of rising credit- card use, Wang said.

China is the only market where Amazon has kept the local brand in its official name because it is ``established,'' Bezos said. Amazon's warehousing space in China totals 35,000 square meters, about the size of four soccer fields.

The company took seven years to be profitable in the U.S., and typically takes between five and seven years in other markets, he said.

`Right Time'

``We are very fortunate because we have the resources to continue to invest until the right time that business has the scale it can be profitable and start being a cash contributor,'' Bezos said. ``At the rate it keeps growing at it may happen in a very acceptable time period'' for the Chinese unit, he said, declining to be more specific.

Amazon on April 24 raised its 2007 operating income forecast to as much as $593 million from as much as $505 million after posting better-than-expected first-quarter earnings. It also increased the sales projection for this year to as much as $14 billion from as much as $13.7 billion.

Sales from the U.S. and Canada fell to 54 percent of total revenue in 2006, from about 90 percent six to seven years ago, Bezos said. Sales from international sites including China, France, Germany, Japan and the U.K. accounted for 46 percent, he said. The company doesn't break down revenue by countries.

Contributions from international sales will increase and outpace that from the U.S., Bezos said, without giving a time frame.

Amazon will be ``practical and open minded'' when considering more acquisitions in China, he said.

To contact the reporter for this story: Janet Ong in Beijing at jong3@bloomberg.net

Last Updated: June 5, 2007 16:50 EDT