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(July 23, 2001) -- and [email protected], two of the Internet economy's most closely watched companies, released finacial reports for the second quarter today, with mixed results.

Amazon, which has promised pro forma operating profitability by the end of the year, said that its revenue had increased to $668 million, a 16% increase over the second quarter of 2000, in which it had revenue of $578 million.

The Seattle-based online retailer also reported a net loss of $168 million or 47 cents per share, a 47% improvement over the previous year when it had a net loss of $317 million or 91 cents per share, and a pro forma net loss, including net interest and other expenses, of $58 million, or 16 cents per share, a 50% improvement over second quarter 2000, one the company reported a pro forma net loss of with $116 million, or $0.33 per share.

Amazon took the opportunity to also announce a marketing pact with AOL Time Warner's America Online unit. America Online will use Amazon's e-commerce platform to run America Online's [email protected] AOL also bought $100 million of Amazon stock at a price of $15.3 per share.

The AOL deal also calls for a variety of alliances between the two companies, including opening an AOL Time Warner boutique and AOL becoming the exclusive Internet service provider of Amazon, which will offer AOL software throughout its service.

[email protected], the struggling broadband ISP, reported its revenues had declined by 7% compared to the same quarter a year ago.

Revenues for the quarter were $138.6 million, and the decline was attributed to the downturn in media and advertising revenue.

The company saw gains in its residential broadband service, adding 474,000 net subscribers, an increase of 62% from the second quarter of 2000.

The ISP reported net operating loss, though, from $38.6 million or 10 cents per share to $65.1 million or 16 cents per share, which was attributed to both the decline in media revenue and higher net interest expenses. Media revenue was down by 62% compared to the year-ago quarter at $28.6 million. -- Catherine P. Taylor

Copyright July 2001, Crain Communications Inc.

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