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Amazon's Paradoxical Video Move

It isn't 1999 all over again, but Amazon.com seems to think it is.

The e-commerce bellwether is behaving like it did in the halcyon days before the bubble burst, spending more money on customer acquisitions than it can probably afford.

And while the market wants to see revenues increase, investors are also cringing as the company's margins shrink.

Amazon  could very well lay those concerns to rest when it launches a video download service, dubbed Amazon DV, in mid-August, as reported by AdAge this week. Or it could fan the flames of concern.

Amazon did not return a request for comment.

Amazon promised investors this week that its recent investments will be paying off sooner rather than later.

But a new standalone toy and baby department and a premium subscription service have done nothing to allay investor concerns.

Analysts are so far focused on declining earnings, slower-than-expected margin improvements and lower full-year guidance.

Merrill Lynch analyst Justin Post noted in a research note that Amazon DV could be more of a negative than a positive, at least in the short term.

"Amazon remains quiet on how or when investments in digital distribution might begin to pay off," he wrote. "We expect ongoing gross margin concerns on potential transition to digital media sales."

But of all the remaining consumer Internet pioneers of the 90s -- AOL , Yahoo  and eBay  come to mind -- Amazon seems to be the only one with a plan for going after new kinds of business.