Amazon Stock Catches Fire

"For the rest of the year, we will continue to grow into our new level of spending," Szkutak said. "Spending will grow, but we expect the growth rate to be significantly less than in 2006."

International segment sales rose to $1.28 billion, up 31%. Adjusted for currency fluctuations, growth was 26%.

Media business sales grew 27% to $1.83 billion in second quarter 2007, compared to $1.45 billion in the second quarter 2006.

Electronics sales grew 55% to $970 million, and increased to 34% of worldwide net sales, up from 29% in second quarter 2006.

Amazon said it received orders for more than 2.2 million copies of the new Harry Potter book, making it Amazon's biggest new product release.

Amazon CEO Jeff Bezos also gave a bullish outlook for the company's Web services division, which rents things like computing power and storage space to other companies.

"We are seeing very good early traction in our Web services initiatives," Bezos said. "It is very encouraging because we have a lot of customers and we are creating a lot of value for those customers."

Bezos said it was too early to comment on its Unbox video downloading service, but noted that Amazon had announced a partnership with Tivo(TIVO Quote) during the quarter to help boost the service.