Amazon Stands Tall

During a conference call for investors, Amazon CFO Tom Szkutak said that the growth rate of the company's spending on technology and content would be significantly slower in 2007 than it was in 2006.

While its core retail business is in much better shape than Wall Street had expected, Amazon CEO Jeff Bezos was also bullish about the company's forays into the Web services space where it offers storage and computing capacity to other companies.

"We are seeing very strong demand for those services," Bezos said. "We have been adding new capacity for those services and will continue to do so indefinitely."

As he has done previously, Bezos said that it would take time for the new initiatives to begin making meaningful financial contributions to the company, given the enormity of its retail business. Still, he was optimistic when asked if Amazon's Web services business could rival its retail in the future. "The market sizes are potentially very large, though we will have to wait and see how large," Bezos said.

Amazon also dismissed concerns that the quarterly results were given a big boost by the highly-anticipated release of the new Harry Potter book due out later in the year. "While we are pleased by the pre-orders we have received in the first quarter, the impact on the overall growth rate was pretty small," Szkutak said.

Szkutak sounded particularly optimistic about the company's prospects internationally, where growth rates are not as quick as they are at home. "The international segment is made up of several different countries, but as we get more scale it will help us buy better and improve over time," he said.