Amazon in a Bind

Compare that to Google (GOOG Quote), which last week reported yet another a blowout quarter, pushing its stock to an all-time high. With the Mountain View, Calif., search engine emerging as an old-school Internet growth story, Amazon is getting less ink. Even so, Amazon shares are near a 52-week high, having jumped more than 30% in the last year. On Monday, Amazon added 59 cents to $46.54.

Other metrics point to increased competition. Amazon had 43 million unique visitors to its Web sites in September, up 25% from a year earlier, according to comScore Media Metrix. That growth lagged behind the 83% increase seen by retail giant Target (TGT Quote), as well as Wal-Mart's (WMT Quote) 46% jump and a 27% gain at Best Buy (BBY Quote).

"The offline competitors are getting better and better at their e-commerce strategy," Jim Friedland, an SG Cowen analyst who follows the Internet sector, said in an interview. The firm doesn't have official stock ratings.

Earlier this year, Circuit City (CC Quote) and Amazon ended an agreement that had allowed Amazon customers to pick up electronics that they purchased on the Web site at Circuit City stories.

Last month, Buy.com declared what it called a price war against its larger rival, promising to sell books at 10% below Amazon's prices. Overstock.com (OSTK Quote) says its prices are 25% cheaper than Amazon's on "best-selling" books.

"They have to continue to be aggressive on pricing," said Martin Pyykkonen in an interview. The Hoefer & Arnett analyst rates Amazon sell.

Amazon showed last quarter that, despite concerns about its margins, the company is capable of expanding sales while maintaining profitability. Amazon shares surged 12% in a day after the online retailer posted strong second-quarter numbers.

Other Internet companies that are scheduled to report this week include Monster Worldwide (MNST Quote), owner of the Monster.Com Web sites, on Wednesday. Monster is expected to make 24 cents a share on sales of $247.8 million, according to Thomson Financial.