MONEY MATTERS: NEXT CHAPTER FOR BOOKSELLER; ON-LINE VENDOR TO GO PUBLIC THIS MONTH WITH 2.5 MILLION SHARES.

Byline: Sana Siwolop The New York Times

Amazon.com, the Internet company that bills itself as ``Earth's Biggest Bookstore,'' will open its doors to investors later this month.

The company, which set up its on-line shop in July 1995, will sell 2.5 million shares, or 10.9 percent of all shares, at an expected $12 to $14 apiece. It plans to use the $32.5 million in proceeds for general purposes.

The initial offering may be particularly popular, for Amazon.com is one of the few Internet marketers that is earning substantial revenues.

For interested investors, however, the question is whether those rare, real results are enough to overcome the risks of betting on an emerging medium of commerce, in which heavyweight competitors may soon come in swinging?

Many investors will point to the record of Amazon.com and say yes. In less than two years, the company has served about 340,000 customers in more than 100 countries. Those customers - more than 40 percent of whom are repeat buyers - can buy around-the-clock and can use personalized search tools like the Eyes feature, which lets them specify an author, title or subject and then automatically receive a notice when a new book arrives that matches their needs.

They also get more choice than in any traditional bookstore, the company contends. While even super-stores, on average, stock less than 10 percent of the estimated 1.5 million English-language books in print, Amazon.com carries them all, as well as more than a million out-of-print books, and a small number of compact discs, videotapes and audiotapes.

And because Amazon.com is a virtual store, it has low overhead, keeping only a small number of books in Seattle, where it is based, and getting the others from distributors and publishers.

Although Amazon.com has not made a profit yet - it lost $5.8 million last year - it is making real sales. In 1996, it had $15.7 million in revenues, and they are rising fast, reaching more than $32 million for the 12 months ended March 31.

Such numbers impress Ryan Jacob, research director at IPO Value Monitor, a New York research firm. ``We're usually negative or neutral on Internet companies,'' he said, ``but this is a company that has already shown that it can sell things.''

He added, ``If you took out their marketing and sales expenses, they'd be profitable today.''

Kathleen Smith, portfolio manager at Renaissance Capital, a firm in Greenwich, Conn., that researches and invests in initial public offerings, also likes the Amazon.com offering - even though the expected offering price of about $13 a share would give the small company a hefty market capitalization of $300 million.

Nevertheless, Smith said, ``Assuming that their revenues grow 100 to 200 percent annually over the next few years, that's a fairly justifiable price.'' And indeed, Amazon.com's revenues have grown even faster; in 1995, sales amounted to just $511,000.

Internet commerce is so new, however, that predictions can be risky. As Amazon.com itself said in its prospectus, ``As a result of the company's limited operating history and the emerging nature of the markets in which it competes, the company is unable to accurately forecast its revenues.''

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The New York Times