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Amazon.com, Inc. (AMZN): Is The e-Retailer Large Enough?

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Once referred to as the world’s largest online bookstore, Amazon.com, Inc. (NASDAQ:AMZN) is that and so much more today. As the company has added more products and services to its overall mix, its customers, merchants, and shareholders have all benefited — and it looks like this may continue to be the case moving forward.

Continuing to expand

Recently, Amazon reported very solid first-quarter 2013 profits. These were due in part to gaining more control over the company’s shipping expenses and other costs. Decreased shipping costs came from Amazon.com, Inc. (NASDAQ:AMZN)’s building of more distribution warehouses that are closer to the company’s worldwide customers. Amazon also began to charge its third-party merchants on its marketplace a higher amount for their shipping services as well.

Although still riding strong, Amazon’s international revenue growth did slow down a bit early this year, possibly prompting some declines in the firm’s operating profit and likewise its net income as compared to the first quarter of 2012.

Amazon.com Inc. (AMZN)Yet, as far as its overall gross profit margin — which has come to be a closely monitored measure of the company’s profitability — Amazon.com, Inc. (NASDAQ:AMZN) posted an impressive increase in that category. Overall, Amazon reported the highest gross profit since the early 2000s.

Revenue was also up in early 2013, increasing substantially over the first quarter 2012. Likewise, the company’s international revenue also was up more than 25% during the same time period.

While these positive financials initially prompted the shares of Amazon.com, Inc. (NASDAQ:AMZN) to rise, the company guided its second quarter 2013 figures closely in line with Wall Street’s sell side estimates. If Amazon can meet or beat these estimates, though, shares are likely to continue rising.

One potential catalyst for big gains in the latter part of 2013 is the potential set-top box that would deliver Amazon.com, Inc. (NASDAQ:AMZN)’s digital video service — as well as other offerings — to its customers. This new box, appropriately titled “Kindle TV” after the firm’s famous e-reader device, could give Apple Inc. (NASDAQ:AAPL)‘s  web-tethered set-top device a real run for its money.

Although Apple Inc. (NASDAQ:AAPL)’s set-top device to deliver its digital video content has been on the market for several years, the device has never gained the popularity — or the sales figures — that lie anywhere close to those of the company’s iPod, iPad, or iPhone. However, investors can breath a sigh of relief from the recent sales numbers, as Apple TV sales in the recent quarters have shown increased demand for an understated device that is now more than five years old.

Is there a close second?

Faithful movie watchers and Netflix, Inc. (NASDAQ:NFLX) shareholders have also been well rewarded of late. Here, too, is a story of positive numbers — including the signing up of more than 2 million new U.S. streaming subscribers in just the first quarter of 2013 alone — nearly topping the company’s own predictions and cleanly beating analysts’ estimates. Include worldwide numbers, and that figure goes up to an impressive 3 million.

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