US internet giant Amazon said today sales outside the US, including those in the UK, accounted for more than half of its business for the first time as it posted its third straight quarterly profit.

The company, which now sells everything from books and CDs to gardens sheds and jewellery and recently launched its own search engine, is also considering a move into the highly competitive digital music download market.

The online retailer, which made its name selling books but has diversified into a wide range of product categories, last night announced earnings of £62.6m in the first quarter, compared with a net loss of £5.6m a year ago.

The company, one of only handful of internet retail brands to emerge from the dotcom boom and bust with a profitable business, said international sales had soared by 80% in the past year to outstrip the US and Canada for the first time.

The Amazon UK managing director, Robin Tyrell, said that expansion into new categories such as consumer electronics, homeware and garden furniture had helped boost growth in the UK.

Favourable exchange rates lifted this figure and the group also benefited from shipping offers at its overseas sites in the UK, France, Germany and Japan.

Amazon has also maintained its free shipping offer for orders over £30 and reduced the threshold at which its 30% book discount kicks in from £15 to £10.

"As people become more comfortable shopping for smaller items online, they begin to look at doing more and more of their shopping online for bigger items," Mr Tyrell said.

He added the company would be looking to expand into even more new areas in the rest of the year and become "the place where you can buy anything online".

He predicted that growth would continue throughout the year with the release of the original Star Wars trilogy on DVD in the autumn expected to overtake the last Harry Potter book as its biggest ever earner.

Amazon.com posted its first profit last year, confounding analysts who said the online retailer would find it hard to increase profits on low margin goods when it was also offering free postage and packing.

The company has also benefited from the huge boom in iPod sales and Mr Tyrell said the UK website was able to offer the sought after 20Gb version at a discount when other retailers were finding it hard to keep up with demand.

He also hinted Amazon was set to enter the burgeoning digital music download market, pitting it against the likes of Apple's iTunes, the recently reborn Napster, Sony and Coca-Cola.

"We have a long standing policy of not pre-announcing things but we will continue to look at that area. It's clear that it is something that is becoming more and more popular.

"Until iTunes came along no one had been doing it very well. It's still very early and we will wait until we can offer something that meets our standards of quality and customer service," he said.

Although it is a competitive area Amazon's sophisticated technology, which recommends products based on others customers have bought or expressed an interest in, could give it a head start on other download services.

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