Amazon.com has managed to take out one of its leading American competitors, agreeing yesterday to take over the internet operations of Borders, the second-largest bookseller in the US.

Some 70 jobs will be lost at Borders.com, which is being revamped and relaunched in August as a co-branded site. Amazon will run the site, which will feature Amazon merchandise, while Borders will promote both Amazon and the new internet offering through in its own bookshops.

No financial details on the agreement were released, but the news was enough to spark a fresh rally in Amazon's badly damaged share price. Neither was there any information on how the firms might deal with the problem of customers overlapping on the internet.

In March, as Borders announced that fourth-quarter profits had almost halved, the company said it would be cutting costs and seeking out new partnerships for its online operations. The agreement with Borders is similar to deal struck by Amazon with Toys R Us, the toy retailer, in the autumn covering Toysrus.com. Under that venture Toys R Us provides the products and Amazon handles fulfilment and customer service.

Amazon said the agreement with Borders demonstrated the attractions of its e-commerce platform.