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Amazon.com posted Wednesday stronger than expected first quarter results, in part driven by strong sales in its electronics and general merchandise categories.

The online retailing giant also issued a forecast for the current quarter and year that shows greater strength than Wall Street's current estimates.

Shares of Amazon, however, were down roughly 4 percent in after-hours trading to $77.77 a share.

During the first quarter, Amazon generated net income of 34 cents a share to $143 million, up 30 percent compared with the previous year. Revenues jumped 37 percent to $4.13 billion in the quarter, verses the same period a year ago.

Wall Street was expecting the company to report earnings of 32 cents a share on revenues of $4.08 billion, according to Thomson Reuters.

The online retailer got a large leg up from its worldwide electronics and general merchandise sales, which soared 56 percent to $1.48 billion in the quarter, compared with year ago figures.

Amazon's global media sales rose a sharp 28 percent to $2.54 billion in the quarter, compared with last year.

"Our sales growth this quarter was driven by low prices and millions of in-stock items available for immediate shipment," Jeff Bezos, Amazon's chief executive, said in a statement. "We're grateful to our customers."

And in forecasting its second quarter and year-end, Amazon expects to generate greater revenues or stronger earnings than a consensus of analysts, according to Thomson Reuters, which tracks analysts projections.

Although Wall Street expects Amazon to post revenues of $3.84 billion in the second quarter, Amazon gave guidance it expects to exceed that level - with expectations of generating between approximately $3.88 billion to $4.1 billion.

And while analysts expect Amazon to post operating income of $125.3 million in the quarter, the company said it expects to do between $120 million to $160 million.

The online retailing giant expects its year-end operating income will outstrip current year-end estimates, saying it expects to raise between $740 million to $940 million in operating income. Wall Street had been expecting Amazon to do $662.3 million for the year.

And on the revenue front, Amazon expects to generate $19.1 billion to $20 billion, compared with Wall Street's projections of $19.3 billion.

If Amazon would have spun off its recommendation engine to Web publishers and retailers years ago, the company might have pre-empted the spate of new up-and-comers with similar technology.

But then again, if that were the case, the former chief of Amazon's data-mining and personalization group David Selinger wouldn't have seen a hole in the market and started Richrelevance. The San Francisco-based company, which makes software that delivers related product links to prospective shoppers, is in a hotly contested niche with start-ups Aggregate Knowledge and Loomia.

On Tuesday, Richrelevance was buoyed with a fresh investment of $4.2 million from investors including Greylock Partners and Tugboat Ventures. The funding announcement comes roughly a month after the upstart raised a first round of financing from Draper Fisher Jurvetson and Draper Richards.

Recommendation rival Loomia recently closed on $5 million in financing from Asset Management, among other investors. And Aggregate Knowledge has raised an estimated $25 million from Kleiner Perkins Caufield & Byers, among others.

As part of Richrelevance's funding deal, Tugboat Ventures' David Whorton and David Strohm of Greylock Partners will join the company's board. Ellen Siminoff, former Yahoo vice president and founder of Efficient Frontier, is also on the company's board.

Amazon.com unveiled on Wednesday a text-messaging shopping service, which adds a mainstream player to the mix of companies that offer shopping to-go.

Amazon TextBuyIt is designed to let mobile device users window-shop, compare prices, and purchase products from Amazon.

Shoppers send a text message to "Amazon" with the product name, search term, UPC, or ISBN code. The e-commerce giant will offer matching products, as well as prices. Buyers can purchase products by replying to the text message and punching in a single-digit number next to the desired item. Amazon will then call the person to confirm the order.

Amazon is not alone in offering a mobile shopping service. For example, mShopper, which launched in 2007, lets people shop for and buy products from their mobile devices.

The difference, of course, is that Amazon is a pioneer in e-commerce for consumers and has a vast line-up.

Black Friday and Cyber Monday have come and gone, kicking off the 2007 holiday-shopping season...apparently in full force.

As you are probably aware, Black Friday is the term in the U.S. for retail shopping on the Friday after Thanksgiving, and Cyber Monday refers to online shopping on the Monday following Thanksgiving.

These have become milestone shopping days that retailers use as indicators for the health of the holiday-shopping season. While they are often referred to as the busiest or even biggest shopping days, they are quite often trumped by other days leading up to Christmas.

Retail, probably more than any other business, seems to live and breathe on year-over-year and comparable-day sales comparisons. Ask even the smallest retailer you know how they are doing, and without a blink they can probably quote how the day, week, and month are stacking up compared with a year ago.

While economic conditions, weather, and countless other variables can greatly impact sales, I have to imagine that most retailers would feel like a high school football team losing their homecoming game if sales fell even slightly below the previous year. Nothing seems to soften that blow.

What really struck me this year, though, was hearing reports of malls opening at midnight and other stores opening up earlier than ever before. I couldn't help but wonder: how sustainable is Black Friday sales growth?

The National Retail Federation reported that Black Friday weekend traffic was up 4.8 percent over last year, but average consumer spending was down 3.5 percent from last year. The NRF projects that holiday sales will rise 4 percent, though, so perhaps it will all be worth it when all the numbers add up after the season has come and gone.

But in the back of my mind, when I start thinking about extra staffing, overtime pay, holiday pay, and perhaps even lower gross margins or even losses on some of the door-buster specials, I wonder what the result of net sales is and whether it is really all worth it? How quickly will the point be reached when you can't open any earlier, drive any more store traffic, or offer enough hot deals to justify it all?

Enter Cyber Monday
Based on survey research from Shop.org, this fact isn't lost on retailers. While Black Friday won't be disappearing anytime soon, many retailers are looking to how they can further tap into the online market to drive sales. I'm sure their data includes retailers that are strictly online-based, but seeing how 72.2 percent of them planned special promotions for Cyber Monday, up from 42.7 percent from two years ago, online holiday sales look to have a pretty solid future.

And if those numbers don't indicate retailers' interest, perhaps the prime-time TV commercial I watched while writing this does. It was for a very well-known national electronics retailer with over 600 retail stores in the U.S. alone, yet the commercial focused solely on its Web site.

Perhaps the number that has online retailers already smiling this year though was from the Shop.org survey that revealed that 72 million Americans--11 million more than last year--planned to shop online this past Monday. Maybe next year more shoppers will measure the shopping season based on remaining online shipping days than store shopping days, and more retailers will start planning their holiday calendar around SEO.

Which would you choose during the holiday shopping season: a long line at the local Costco warehouse store or an average download wait of 115 seconds per page on Costco's e-commerce site?

During Black Friday and Cyber Monday, a third of the 30 Web sites that Keynote Competitive Research monitors during the holiday season showed a significant drop in speed. Online shoppers, despite using high-speed connections, faced up to 2 minutes to process their e-commerce transactions, compared with the 1- to 2-second blip most are accustomed to, according to Keynote, which released its report Tuesday.

Traditional brick-and-mortar retailers that recently beefed up their e-commerce site were the group largely affected with traffic slowdowns, according to the report. And the research firm noted that product searches and check-out transactions were the two areas on sites that were affected the most with sluggish performance.

In Costco's case, for example, its site slowed by as much as 500 percent between 7 a.m. PT and 1 p.m. on Cyber Monday to log on, add items to a shopping cart, and check out, according to the report.

Toys "R" Us suffered as much as a 300 percent slowdown in downloading pages between 10 a.m. PT and 2 p.m. on Cyber Monday, translating to an average wait of 30 seconds to 60 seconds per page. J.Crew experienced a similar slowdown, with the average wait increasing more than 400 percent, according to Keynote. Black Friday and Cyber Monday typically result in a 5 percent to 10 percent increase in site sluggishness, Keynote said.

As you debate the merits of venturing out to hit the local retail stores this holiday season, verses spending a little more time processing transactions online, consider this: which situation affords you more time to eat another Christmas cookie and drink more eggnog?

It's happening again.

If you thought one minute past midnight the day after Thanksgiving was too early to choke out your fellow shoppers in the name of a great deal, you were wrong.

An Acer laptop will be one of the featured items offered at Black Friday-like prices Friday, November 2, in its stores.

(Credit: Wal-Mart)

Following last year's decision to offer a $398 laptop several weeks ahead of the traditional Black Friday (the day after Thanksgiving), Wal-Mart is planning on slashing prices on five items--in its stores, not online--beginning at 8 a.m. this Friday. One of them will be a $348 Acer laptop with 1GB of RAM. The other four items and their prices will be kept secret until Friday morning when the sale officially begins. At that time, the prices will be available on the Wal-Mart Web site. The retailer will still hold a traditional Black Friday sale.

The secretive nature of revealing the pricing online at the very last second is likely an attempt to avoid what has become ritual among retailers and Black Friday fans. More and more, Black Friday Web sites have made it their business to reveal retailers' circular ads before they are officially published.

It's caused some retailers, like Wal-Mart, to threaten legal action. Earlier this month, Wal-Mart sent notices to 10 Web sites that the retailer says it will sue if the ads are published before November 19, the official release date.

But will the strategy of starting the holidays earlier and earlier bring more change to Wal-Mart's coffers? In past years, the evidence of success has been "mixed," according to consumer retail analysts. In general the lower-priced items do well, but products with higher price tags, generally over $500, are still a tougher sell.

I'd like to pass along a press release from one of my favorite Silicon Valley start-ups. It's a place you can go to make chips... but I'd better explain that.

The Dimension 3D printer at TechShop in Menlo Park, Calif.

(Credit: TechShop)

A lot of people do woodworking at home. The equipment is moderately priced and there's plenty of support available from TV shows such as Norm Abram's New Yankee Workshop on PBS and a variety of woodworking shows on the DIY Network.

But for those of us who like working with metal instead of wood, things aren't so simple. The equipment, for example, is much more expensive. Wood lathes start at just a few hundred dollars. Metal lathes capable of working similar-size objects are several times more expensive. A full-size milling machine-- for which there is no woodworking equivalent--can cost from $3,000 up to $30,000 with computer control. And metalworking can be more dangerous, with sparks, flames, and sharp bits of metal getting underfoot. It's tough doing this kind of work in a garage, though a lot of people do so safely.

And there are no TV shows to help, since most woodworking techniques don't translate to metalworking. So metalworking hobbyists get by with Web sites and hobbyist magazines such as The Home Shop Machinist. And, of course, they get together and share information in person. Often, hobbyists will share their machines and do work for each other.

But that only goes so far. If you want formal instruction from someone trained in metalworking, you generally have to sign up for classes and shop time at a community college, and those courses are usually intended as job training for professional machinists. Plus, when you're not taking classes, you usually can't get access to their shops for your own projects.

Someone's finally trying to solve this problem for the hobby metalworkers of the world: TechShop, a public-access workshop in Menlo Park, Calif. I signed up for a membership before TechShop even opened, but I've had so little time at this job that I haven't started any projects there.

Fortunately for TechShop, a lot of people in the San Francisco Bay Area have had time to spend there. TechShop has (or plans to get) a long list of industrial tools for its current 15,000-square-foot shop. There are lathes, milling machines, welding equipment, and esoteric items including the Dimension 3D printer shown above.

TechShop holds multiple training classes for its tools every week--not just in metal cutting, milling, and welding, but in laser cutting and etching, making things from carbon fiber, and even industrial sewing and embroidery. So pretty much whatever you want to do, but can't do in your garage, you can learn how to do it at TechShop.

TechShop has been so popular--with customers and investors--that by the middle of next year, there will be 10 more TechShops. That press release I mentioned has a list:

• Los Angeles
• Sacramento, Calif.
• San Diego, Calif.
• San Francisco
• Sunnyvale, Calif.
• Orlando, Fla.
• Durham, N.C.
• Portland, Ore.
• Austin, Texas
• Seattle

The Sunnyvale location will be perfect for me. That is, whenever I get some spare time...

Oh, right, I was going to explain that lame pun I opened with.

Remember my little piece on the phrase "Speeds and Feeds" back in June? Well, when a cutting tool advances through a metal workpiece on a lathe or milling machine, the little curls and bits of metal that are removed by the tool are called "chips." So now you know.

One of our favorite sites, the airfare prediction site Farecast, is spreading its wings today and launching a beta pricing service for hotels as well. The service works for the top 30 U.S. travel destinations.

Using hotel inventory data from partner sites Orbitz, Cheaptickets, and ReserveTravel, as well as from its own historical database, Farecast can now tell you which hotels in the area you're looking to book are good deals, and which are not. And, just as it does with airfares, Farecast can tell you which hotels' prices are likely to be better if you change the dates of your stay.

Step 1: Find the red hotels at your destination. Those are the good deals.

Farecast displays hotels that match your search on a Microsoft-powered map. Bookings that are good deals (reservations that cost less than they normally do for the particular hotel) are color-coded in red. Poor deals are in blue. If you click on any hotel, you get a graph that shows how the hotel's prices fluctuate over the days before and after your trip.

Step 2: See if your hotel's prices are better before or after your planned dates.

(Credit: CNET Networks)

It's interesting that Farecast doesn't color-code by price, but rather by amount of discount from the historical average. Thus a $400 booking can be a better "deal" than a $200 hotel--however, the high-priced lodging is likely to be at a five-star hotel, while the cheaper room can be found at a lower-quality location.

The system will let you know, visually, if you're traveling at a bad time. If all the hotels you're looking at are bad deals, there's a good chance that there's an event in town that's driving up prices. Farecast also has data about local events, Farecast's Mike Fridgen told me, but it doesn't display this information in this beta.

This new hotel price-finder feature is quite useful, and Farecast does an extremely good job of displaying its data and predictions. I would recommend using it for your next booking.

(The one thing I really would like to see added is integration with Farecast's airfare system. It'd be even more useful if the site could combine airfare and hotel info to help you pick the best dates for a trip. That's on the road map, Fridgen said.)

Somewhat related: Rentometer (review) and Zillow (previous coverage).

A new start-up called mShopper has just introduced an application that lets people shop from their cell phones.

(Credit: mShopper)

The company on Thursday launched its new service that allows mobile-phone subscribers to search and compare prices for more than 7 million items from over 100 merchants. Once they've found an item, people can buy it with just a few clicks on their phones.

It works like this: you enter the first two letters of a brand name or product model. The application finds the item you're looking for and lists prices from a variety of Web retailers. Users can register their credit card and shipping information in advance on mShopper's site. Or they can simply click to call to register their billing and shipping information.

There are other companies that offer some of what mShopper can do. For example, a company called Frucall allows people to comparison-shop by calling a 1-800 number and typing in a product code to get prices from a variety of Web sites. But the application doesn't let people buy things directly from the phone.

David Gould, mShopper's CEO, said the company is currently testing the service with a major U.S. operator, but he declined to mention which one. The operator plans to add mShopper to its service menu under its own brand and share revenue with mShopper, Gould said.