Amazon stretches deal with Target

The e-tail giant says it has extended its five-year contract to provide all back-end Web operations for retail giant Target.

Jim Hu Staff Writer, CNET News.com
Jim Hu
covers home broadband services and the Net's portal giants.
Jim Hu
Amazon.com said Tuesday that it has extended its contract to provide all back-end Web operations for retail giant Target.

E-commerce, steady as it goes
Online outlets will claim 10 percent
of total U.S. retail sales by 2008.

The extension comes nearly two years after the companies originally struck their five-year deal on Sept. 11, 2001. The agreement allows Amazon to power e-commerce services such as online order fulfillment and customer service for Target.com and its online properties MarshallFields.com and Mervyns.com.

"As a result of our association with Amazon.com, we increased sales significantly year-over-year for our online properties in the first two quarters of 2003, and look forward to continuing this success," Target Vice Chairman Jerry Storch said in a statement.

The agreement extends the deal's lifespan to 2008.

Over the past few years Amazon has tightened its relationship with offline retailers, which were once expected to become victims of Amazon's success. Amazon has similar deals to power e-commerce functions for retailers such as Office Depot, Circuit City, Toys "R" Us and Borders.

Amazon last year also opened an apparel store by teaming with offline retailers such as Gap, Eddie Bauer and Nordstrom.

Last quarter Amazon reported a net loss of $43 million, or 11 cents a share, on revenue of $1.1 billion. That's an improvement from a net loss of $94 million, or 25 cents a share, on $806 million in revenue the year before.