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Online retailer Amazon.com has good news for the tech sector at a time when technology businesses are cutting profit forecasts, announcing massive layoffs, and eliminating future investments.

The Seattle-based company reported solid fourth-quarter sales Thursday and said profits for the quarter surpassed the company's estimates -- showing that Amazon.com is passing rival eBay on the path to growth.

Net sales for the quarter increased 18 percent to $6.7 billion in the fourth quarter, compared with $5.67 billion in the same quarter of 2007. Not including the $320 million impact from year-over-year changes in foreign-exchange rates throughout the quarter, sales would have grown by 24 percent compared to the same quarter in 2007, according to the company. Income for the quarter was up nine percent to $225 million from $207 million a year ago.

Leading the Pack

Amazon used the economic conditions and recession to woo holiday shoppers by offering shipping promotions and low pricing. The strategy worked, and Amazon reaped the benefits of its biggest holiday season in history, according to Amazon CEO Jeff Bezos.

Strong demand for the Kindle, Amazon's electronic book reader, also didn't hurt, according to Bezos, who said he was "grateful" for the demand.

In fact, as of Friday afternoon the Kindle was completely sold out "due to heavy customer demand." Users, however, were encouraged to reserve a place in line by placing their order anyway.

While online auction house -- and Amazon rival -- eBay has had great success since its launch in 1995, this quarter it turned in the other direction.

eBay suffered from the recession with a bleak holiday season and quarterly revenue decreases for the first time in its history. eBay reported $2.04 billion in fourth-quarter revenue compared to $2.18 billion in the same quarter last year.

John Donahoe, eBay's chief executive and president, said the holiday season...

YouTube and the William Morris Agency are nearing a deal that would put the Hollywood talent broker's clients in made-for-YouTube productions, according to a report in The New York Times.

The YouTube deal would reportedly give William Morris clients an ownership stake in the videos they create for the popular video Web site. William Morris represents the likes of actors Denzel Washington and Russell Crowe and producers Michael Bay and J.J. Abrams.

An agreement would give the agency's clients, which also include musicians and other celebrities, access to at least 100 million viewers, the latest figure comScore offered for YouTube traffic.

"This is inevitable. It's good for YouTube and good for people who are creating content that can't find a place on the TV or cable networks," said Phil Leigh, senior analyst at Inside Digital Media.

Monetizing YouTube Content

The Times cited anonymous sources who were not authorized to speak about the deal publicly. Those sources called the reported deal with the William Morris Agency YouTube's most far-reaching agreement yet to add professionally produced videos to the site. Most of the videos are user-generated.

The William Morris Agency and YouTube could not immediately be reached for comment. But the Times quoted Fred Davis, a senior partner at entertainment law firm Davis, Shapiro, Lewit & Hayes, as saying that the deal may include traditional media talent looking to expand into Web properties.

"Although everyone realizes that the monetization of this content is not quite there yet, everyone also realizes the huge potential as the digital media business matures," Davis told the Times.

Davis pegged YouTube's prime motivator: Monetizing content at its high-traffic video portal. The Google-owned company has attempted to generate revenue streams from advertising on the site, but most of the content is user-generated and the revenues have not reached what YouTube sees as the site's potential. To...

Now that a beta version of Windows 7 has been released to the public, Microsoft is letting users know what to expect next. Instead of moving on to a release candidate as in the past, Microsoft will first resolve problems reported by users.

Windows 7 beta was released Jan. 7 at the Consumer Electronics Show to MSDN, TechNet and TechBeta subscribers, and then to the rest of the world shortly thereafter.

"As we have said before, with Windows 7 we chose a slightly different approach which we were clear up front about and are all now experiencing together and out in the open," said Steven Sinofsky, Microsoft's senior vice president for Windows, in a blog post Friday.

Worth the Wait

Microsoft is working with PC makers, hardware engineers, and software vendors to get the operating system ready, echoing CEO Steve Ballmer's call to make it simple, reliable and fast. To do that, Microsoft said it is collecting performance telemetry and application compatibility data, as well as information on usage.

"Think of all those Web sites, download pages, how-to-articles, training materials, and peripheral packages that need to be created -- this takes time, and knowing that the release candidate is the final code that we're all testing out in the open is reassuring for the ecosystem," Sinofsky said.

The release candidate will be the final Windows 7, since Microsoft plans to make it available to PC makers.

Once ready, the release candidate will be a refresher for the beta version. Users are supporting Microsoft's new course, telling the Windows 7 team to take its time and give users a quality product.

Microsoft is doing just that by not offering any release dates and saying the company will not be driven by "imposed deadlines." Sinofsky, however, did say that Microsoft is making progress and echoed Ballmer's promise to...