Jeff Bezos, founder and chief executive officer of Amazon.com, predicted last week that the trusted relationships consumers have had with their banks and other service providers would be replaced as new types of companies built trust through personalisation. Amazon.com, which aims to provide the biggest selection of books, music, toys, and videos on the Internet, is on a mission to emulate the trusted adviser role of those in the financial services industry and the medical profession.

"We're working hard to earn the trust of our customers," Mr Bezos said in a keynote address at last week's PC Expo in New York.

The five-year-old company is investing heavily in its ability to present customers with personalised versions of its website. This helps customers save time, accelerate their discovery processes, and connect with trusted friends to help them make purchase decisions, Mr Bezos said.

"Today it's working well," he said, though Amazon has "tons to do".

Amazon.com, which boasts a million customers in 160 countries, wants to be the "earth's most customer-centric company" Mr Bezos said. This means listening to its customers, continuing to invent and personalising by "taking each customer and putting them at the centre of their own universe", he said.

One effort in this direction is Amazon's Trusted Friend network. Customers can set up "Friends and Favorites" web pages and view their friends' recommendations for products. "The Friends and Favorites area is the newest that we've done, and it is a great example of personalisation," Mr Bezos said.

Using proprietary collaborative filtering software, Amazon.com also gives customers "quick picks", its term for recommended products, based on the customers' past purchases as well as those of customers who have similar tastes. Quick picks can be updated hourly or even more frequently.

"We make these picks based on what toys, music, or electronics you might like, even if you have only bought books from us," Mr Bezos said.

Customers can then use Amazon.com's 1-Click software, which stores credit card and shippment-related information, to purchase items. Customers can also use the Wish Lists feature to inform friends about what gifts they might like to receive and what they have already. There were now two million wish lists on Amazon.com's site, Mr Bezos said.

Best known for selling books, Amazon.com has expanded from its original business into art, auctions, lawn furniture and beauty products, among others. Its aim is to "build a place where people can discover anything they want to buy online", he said. According to surveys more than 100 million American adults recognise the Amazon name, a figure higher than any other electronic commerce company. Some 22 per cent of its purchases are now made from outside the US. Because Amazon.com offers so many products, personalisation runs the risk of losing serendipity. "If we customise based on what we think you would like, we could narrow your focus," he said.

Mr Bezos advocated a return to yesteryear when a small-town merchant knew his customers' preferences and was qualified to make personal recommendations. "Many of our current shopping experiences are not personalised," Mr Bezos said.

He also stressed the need for privacy and security measures in handling online transactions.

While companies held such valuable information they needed "to work on deterrents to make sure their building locks are as good as they can be" and to set expectations with regard to security, he added.

But, in the end, what really drives business "is a neat service that generates word-of-mouth referrals". Eventually, there will be "thousands of winners and thousands of losers online", he said.

Mr Bezos was born in Houston, Texas, of a Cuban-born father and a mother who worked in a bank. He spent his time growing up on a farm in Texas and, by all accounts, from an early age he was a perennial overachiever. He attended Princeton University where he studied electrical engineering and computer science.

He worked in New York for eight years, first at Bankers Trust and later at DE Shaw, a hedge fund, before he headed west to Seattle to set up Amazon.com in July 1995.

That year, he raised $1 million (€1.05 million) from 60 people, including family and friends, and later he raised another $8 million from a venture capital company.

He said those amounts were peanuts compared to the money that some Internet companies raised last year. "In 1999, every idea got funded and that can't be right," he said. "In 1999, irrational plans were proved to be irrational." Some Internet companies, he said, blew half their investment dollars - in some cases as much as $30 million - on television advertising in a single quarter.

Even though Amazon was one of the first brands on the Internet, like many other Internet companies its stock price has recently taken a tumble. Its stock is hovering at around the $32 mark, down from a $113 high six months ago.

While some analysts are sceptical about its business model, others believe it will be in the black by 2002 with $6 billion in sales, up from $1.6 billion last year.

At PC Expo one attendee asked Mr Bezos what was his prognosis for profit. "No company cares more about profitability than Amazon.com," Mr Bezos replied. But "Amazon is famously unprofitable", he added. It was profitable in December 1995, he said, six months after the company opened. Since then the company has been busy expanding geographically - Amazon now has a presence in Britain and Germany. It has also been expanding its range of products and features.

"Expansion is expensive," he said. "We're building and integrating the fundamentals and we're operating in an unconstrained market size." Part of the problem, he said, was that Amazon was investing in scale as a public company and so its every move was open to public scrutiny.

Mr Bezos said the company was not as strapped for cash as some analysts might have the public believe. It has about $1 billion in cash and the US books and music business is becoming profitable. While the investment outlook has changed considerably, he believed that 2000 is still a period of "unusually easy access to capital".