Amazon: Giving Away the Store?

Revenue growth outstripped predictions, but margins are slimming and some say the e-tailer has to spend too much to lure customers

It was a happy holiday shopping season for Amazon (AMZN). The e-commerce giant reported sales of $3.99 billion for the last three months of 2006, a 34% increase that beat the Street's average estimate of $3.77 billion. But the better-than-expected fourth quarter was not enough to distract analysts and investors from signs that the days ahead could be challenging.

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