Heavy discounts and expensive promotions have chipped away profits at online retailer Amazon.

The company's first quarter sales increased by 24% over the same period last year to $1.9bn (€1.4bn, £997m) - but net income fell 30% to $78m.

Amazon is now forecasting total 2005 sales of between $8.175bn and $8.675bn, and net income between $395m and $510m.

Sales growth was particularly strong in the international division, which encompasses UK, German, Japanese and Chinese sites, and accounted for 45% of group takings over the past year.

The company says it is continuing to see "strong interest" from retailers wanting to use its service arm to develop and operate their own-brand websites, as recently agreed with UK chain Marks & Spencer.

Amazon also announced Wednesday it had formed a new partnership US department store chain Macy's, to sell branded clothing, home and other goods and accessories via its website. It has similar sales partnerships in the US with a variety of other retailers.

Data sourced from Financial Times Online; additional content by WARC staff