The following ratings changes were generated on Monday, Oct. 27. We've downgraded Amazon.com ( AMZN) from buy to hold. Strengths include the company's strong revenue growth across business segments in recent quarters, annual increases in net income, expanding margins and a healthy liquidity position. Downside risks include a decrease in demand for the products and services offered by the company or its third-party sellers, and a failure to drive revenue from new products and services. Amazon's second-quarter revenue increased 34.9% to $2.89 billion, driven by a strong performance from both the North American and international regions. North American revenue jumped 38.4% to $1.60 billion, fueled by higher demand for products within the electronics and other general merchandise business segment. International revenue surged 30.9% to $1.29 billion, supported by strong revenue growth within the media segment. Gross profit margin for the quarter improved 55 basis points to 26.40%, from 25.85% in the year-ago period, while operating profit margin expanded 82 basis points to 4.05%, from 3.23%. Consequently, net income more than tripled to $78 million, or 19 cents per share, from $22 million, or 5 cents per share. Cash and cash equivalents for the quarter ended June 2007 were $1.67 billion, an increase of 17.3% over $1.42 billion a year ago. Meanwhile, the interest coverage ratio improved to 6.16 from 4.06, despite an increase in the interest expense. During the quarter, Amazon launched a number of new products and services. Amazon's revenue depends on demand for company products and services or on demand for third-party sellers. A softening of demand, due to changes in consumer preferences or a weakening in the U.S. or global economies may result in decreased revenue and a failure to successfully launch new products and services.