Amazon.com (AMZN)

Recently,"the amount of bandwidth used by Amazon Web Services, which includes cloud computing and server storage space, recently surpassed the bandwidth used for its retail business," says founder Jeff Bezos, in a recent Seattlepi article. Amazon has become much more than just a place to buy books: people sell shoes, cars, food, you name it. But even more significant is the fact that over 30% of units sold are 3rd party sellers, which would imply that these businesses are paying Amazon a hefty price for allowing them to store their data on Amazon.

In addition, the introduction of the Kindle Reader will continue to spark new interest in consumers, and more importantly stands to prove that Amazon isn't running out of new, techy, ideas anytime soon.

Amazon has seen tremendous growth in Amazon Prime memberships. The company is tight-lipped about its Prime membership numbers, but they wouldn't be expanding internationally if the program were not successful. During the second half of 2007, Amazon rolled out Prime to 3 international marketplaces (Japan, UK and Germany)

According to a research note by Jeetil Patel of Deutsche Bank,"Over the past year, services such as Amazon Prime have helped to shift consumer behavior, fuel cross-category shopping and consolidate wallet share into the hands of Amazon.com. This strategy has helped to accelerate user growth, purchase frequency and unit growth at the company in the past year, while the e-commerce market has deteriorated. Once again, we think Amazon Prime should fuel growth in 1Q 2008, based on shifting consumer behavior."

I've seen this growth first hand. I use Amazon's FBA program to fulfill my Amazon orders, which makes my items eligible for Super-Saver shipping and Prime members. In the 4th quarter of 07, 14% of my shipments were for Amazon Prime customers. So far in the first quarter of this year, 19% of my orders are going to Prime customers. Those are sales I would not be getting if I was self-fulfilling my orders.

Growth opportunities abound -- the company continues to diversify into many new businesses, a homerun in any of which could have substantial unexpected impact on company financials

The Street and many others don't understand Amazon's business model going forward. In 3 years, they won't be generating the bulk of their revenue from book sales - they'll be generating it from selling their expertise in Web 2.0 business management. From pay-per-use server usage to flexible payment applications, the business of doing business on the Internet will increasingly take a front seat in Amazon's business model as their low-margin book retailing business fades into the background.

Amazon has few major competitors and is well poised to profit from the long term trend of increasing share of wallet spent online

Aggressive sales growth show Amazon is successfully growing its revenues while simultaneously improving its profitability