Amazon Rise Defies the Odds

Amazon.com , known for its useful innovations, seems to have a new invention: A magical device that can cause its stock to defy gravity.

Over the past three months, Amazon's stock has risen the furthest of the big four Internet companies, up 43% as of Friday, compared with gains of 41% and 29%, respectively, for eBay and Google and a 1% decline for Yahoo! .

All four stocks are up since they began reporting third-quarter earnings a few weeks ago. Google has delivered another stronger-than-expected quarter, while eBay showed it's handling near-term challenges with its usual skill.

Even Yahoo! has managed to claw its way back from what had been an 18-month low, by declaring that a search upgrade that could make it more competitive with Google was on track for an early 2007 rollout.

But there was nothing new in Amazon's third quarter -- certainly nothing that could warrant a 13% boost in its stock price the following day. Nor did the market seem to regard it as a quirk, a temporary spurt caused by short-covering that would soon be corrected. After rising to $37.98 the day after earnings, the stock has since held that ground and more, closing Monday at $38.21.

Some news stories and analyst reports asserted that the surge came because Amazon said its technology and content spending would finally fall as a percentage of revenue. Tech and content spending had risen to 7.8% in Amazon's second quarter, up from 6.4% in the first and 4.4% in the quarter before that. Much of that spending is believed to have been on developing Amazon's ill-starred Unbox video downloading program.