Strange tales from America as long-time loss-making dotcom reports a profit and traditional retailers face tough new world

Way before the dotcom industry finally fizzled into ignominy, Amazon.com was a business story. The headlines in the financial trade magazines were of the brave new world of retailing spearheaded by this most innovative company.

As the share price hit stratospheric levels and then plummeted, the headlines changed. I was still working on the third floor when they turned into the Amazon.bomb variety. Suddenly the talk was of cash-burn and working capital and how long it would be before Amazon would finally run out of money and become the biggest dot bomb of them all. And yet - they've finally made a profit.

Not much of a profit, admittedly, a mere $5 million (€5.8 million), hardly enough to keep a couple of dotcom executives in their downsized jeeps, dinghies, and twin-prop aircraft for more than a few months. And a profit made by dumb luck as a New York Times analyst pointed out, given that a $16 million gain was made on foreign exchange due to the falling euro. But profit is profit and it's better than the losses of over $3 billion that it's racked up since 1997.

Of course my own relationship with Amazon is somewhat fraught. I occasionally buy books from them but it's almost impossible for me to log on to the site without having a quick peek to see if they're still selling mine. Both the good and the bad part of Amazon as a bookseller is that it encourages people to write reviews of the books that they have bought.

And, of course, for the sensitive artist in me it's difficult to read any review that doesn't say that mine are the best books in the world. Some of the reviews can be complimentary but some aren't. And while you tell yourself that everyone won't like every book, it's still shattering to be damned by faint praise, or by no praise at all.

Within the world of paranoid authors there are all sorts of stories about evil-doing on the review front - like people getting groups together to write glowing reviews, or an author who hates another author writing a really horrible one. And you think the world of business is bad?

I suppose one of the reasons I like Amazon (the company, not the share which analysts are now telling us to buy "on dips") is that its chief executive, Jeff Bezos, has remained upbeat throughout the good and the bad times. In the past he expressed astonishment at the lofty heights to which dotcom shares, including Amazon, were pushed.

He told people to sell but he hasn't sold out. He's still plugging away trying to keep the company on track. And, of course, he's made millions more dollars in selling books than I'll ever make by writing them!

In a dramatic reversal of fortune, it was a bricks and mortar retailer that ended up filing for bankruptcy around the same time as Amazon filed a profit. Kmart has now become America's biggest retail collapse. Charles Conaway, who has been trying to restructure the company for the past year, has been ousted as chairman.

He's been replaced by James Adamson, an expert in saving ailing companies. His challenge is to pull Kmart out of bankruptcy by July 31st next year. He has already secured interim financing but there's a lot to be done to restore Kmart to anything like its former self. Part of the retailer's problems has been that inventory issue again. Apparently they've had so much stock that they've had to park trailers at the back of some of their stores to hold the overflow.

Now the company has cash-flow problems, having reported dismal November and December sales. It's been overtaken by Wal-Mart and another discount chain, Target. According to the analysts Kmart will probably have to shut down about a quarter of its 2,000+ stores.

Retailing is always competitive. Discount retailing can be totally fraught, with margins tight and the line between good value and totally tacky sometimes extremely blurred. I've been in a Kmart store and I came down on the side of totally tacky. It's only redeeming unique selling point is its range of Martha Stewart items.

Personally, I manage to live just fine without Martha Stewart but she's a kind of American Delia Smith who's also branched out into the whole "lifestyle" arena. Clearly Martha's lifestyle products are not totally tacky and they've been instrumental in lifting Kmart above the tasteless line.

But Martha is surely concerned about the impact that Kmart's bankruptcy will have on her own multi-faceted empire and is doubtless in deep discussion with her advisers on where she stands as a purveyor of healthy happy lifestyles for a bankrupt retailer.

Another bastion of corporate America is trying to regroup this year too.

McDonald's chief executive Jack Greenberg has cut back on the traditional route of expanding the chain like crazy and has, instead, concentrated on trying to increase revenue from current restaurants by making them more customer-friendly - which I think means that you can order a customised burger.

Unfortunately the new made-to-order system for food has resulted in service slowing down in many outlets and, of course, burger sales have fallen in Europe as more and more people have given beef the cold shoulder.

Once again, the concept of fast-food versus food that you actually want to eat has left the executives scratching their heads and wondering how best to entice people in and then turf them out.

Obviously, I would be a faller at the speed fence since I go absolutely ballistic waiting in a queue and I've had some full and frank discussions with the local McDonald's Drive-Thru facility on the speed issue in the past. However, if I thought that the burger was better and freshly cooked it might make a difference.

Actually, I doubt it. Nobody goes to McDonald's for the quality of the food; they go when hunger has finally got the better of them and there's no alternative. Unfortunately for the chain it seems that more and more people are finding alternatives and preferring them.

I can't actually remember the last time I chose to go into a McDonald's. Even with my seven-year-old nephew in tow, the food pitstop on our most recent outing was a place where he could get some kind of psychedelic green drink and a huge blueberry muffin.

He was perfectly happy. So was I because at least (wherever it was) the coffee tasted like coffee.

McDonald's might be customising the burgers but the coffee tastes like nothing on earth.