Amazon Expands Downloads; Cuts Staff Inc. is expanding the number of free music downloads it offers and linking downloads with its Honor System micropayment service, which lets people pay for songs if they want. As with all Honor Payments, Amazon will take a cut of each "tip."

Thousands of MP3 and Liquid Audio downloads, including exclusive cuts from the Beastie Boys, Pearl Jam, Coldplay, Barenaked Ladies, and the Eagles, will be available. Amazon has offered limited downloads of featured music before, but the new section is a dramatic expansion of the number of titles available.

Also tweaking its business model this week was retailer, which even in its third incarnation has yet to find the right E-commerce mix. The company Tuesday got the dubious distinction of becoming the first online division of a major brick-and-mortar retailer to lay off staffers--in this case 24 employees, about 10% of its staff. It's also cutting advertising and culling its online items for sale. People are less likely to buy cheaply priced goods if they have to pay for shipping.

A spokeswoman notes that overall staffing at is still rising. She says 52 people will be added in engineering, site design, and product management.

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