Amazon already allows shoppers to try before they buy

Its losses have narrowed to $43.3m from $93.5m a year ago, the company said.

Revenues have been buoyed by free shipping offers, and sales of the latest Harry Potter book - Harry Potter and the Order of the Phoenix by J K Rowling.

"Harry Potter had a great effect. By offering great value, we were able to attract... new customers to Amazon," Robin Terrell, managing director of Amazon.co.uk told BBC News Online.

Amazon sold 420,000 pre-ordered copies of the book and a total of 1.4 million copies worldwide.

The online retailer said it was raising its revenue targets and expanding its free shipping promotions.

"We're expecting a 25% growth year on year," added Mr Terrell.

Sales overseas are growing faster than at home, company representatives said, with US sales up 20% from a year earlier while international sales were 81% higher.

Excluding special charges, the company reported an operating profit of $42m or 10 cents a share, well ahead of the six cents per share forecast by analysts polled by First Call.

Amazon aims to continue to expand, in part by moving beyond its current product offering.