Growing sales of Amazon.com’s Kindle e-book reader helped to boost third-quarter profits at the online retailer by 69 per cent.

Net profits hit $199 million (£120 million), or 45 cents a share, for the three months ending September 30 — from $118 million, or 27 cents, a year earlier — comfortably ahead of analysts’ predictions. Sales rose 28 per cent to $5.45 billion, buoyed by price cuts, shipping promotions and the availability of a broader range of products.

Jeff Bezos, the company’s chief executive, said the Kindle had become the bestselling item by both unit sales and value across all product categories on Amazon.

Earlier this week the company began shipping the latest-generation Kindle. Its 3G wireless works in the US and 100 other countries. Yesterday, Amazon lowered its price by $20 to $259, to compete with a new rival product from Barnes & Noble, the Nook. Consumers who bought the Kindle at the higher price will receive an automatic refund.

In a further move to beat off competition from the Nook, Amazon announced that from November it will let people buy, download and read Kindle books on a PC.

The company already offers a similar application for the Apple iPhone and iPod Touch that lets users access Kindle books whether or not they own the device.

The company has announced four acquisitions this year, including Zappos.com, the online shoe seller, in a bid to broaden its reach.

It is currently engaged in a fierce price war with Wal-Mart. After the world’s biggest retailer cut the price of books by best-selling authors to $9 last week, Amazon matched the offer. Target, the second-largest US retailer, followed with a similar price cut.

Amazon shares rose $10.13 to $103.58 in extended trading after closing at $93.45 on the Nasdaq Stock Market. The shares have climbed by 82 per cent this year.

Sandeep Aggarwal, an analyst at Collins Stewart, said the level of outperformance was unexpected. “They are doing everything right,” he said.

? Federal regulators yesterday began voting on new rules aimed at ensuring network operators treat the flow of internet content without discrimination.

The Federal Communications Commission plans to bar internet providers from slowing down or blocking streamed video, music or other content that uses up a lot of bandwidth.The rules would in effect prevent carriers, such as AT&T, Verizon and Comcas, from charging extortionate rates or restricting capacity to small companies or individuals.

Times Recommends

• Toyota recalls 437,000 cars including Lexus
• Myners says bonuses are bleeding pension funds
• Japanese company faked safety reports on seats