Amazon.com shares soar on rosy outlook, holiday sales

Amazon gave what it called an "appropriately conservative" first-quarter operating income range of $125 million and $210 million, on revenues ranging from $4.53 billion to $4.93 billion. Wall Street, on average, had been expecting first-quarter revenues of $4.51 billion.

Bezos said the environment was now ripe for Amazon to begin discussing providing web services for larger companies. Amazon provides a cloud computing platform that offers far-flung users access to storage and computing power in Amazon's data center.

"People in this macro environment, they're looking for ways to save money and cloud computing does that. There's a lot that can be done there," Bezos said, calling it a "silver lining" in the grim economic environment.

Asked whether fewer customers were subscribing to Amazon Prime in the recession, Chief Financial Officer Tom Szkutak said Amazon was "very pleased" with the service, which charges a flat fee of $79 for a year's shipping.

"We have very good subscriber growth and customers like it. That was evidenced further in Q4 during the holiday season," he said.

As for Kindle device, which launched last year and racked up a backlog of orders during the holidays, Bezos said its users continued to buy physical books even while purchasing digital versions.

"We had anticipated strong demand and what we saw was stronger than that," he said.

Amazon is valued at 35 times projected 2009 earnings, at a premium to competitor eBay Inc (EBAY.O) and Internet giants like Google Inc (GOOG.O) or Yahoo Inc (YHOO.O) at 8, 16 and 29 times forward-looking earnings, respectively.

Its shares rose 13 percent in after-hours trade to $56.50 after closing at $50 on the Nasdaq.

(Additional reporting by Lisa Baertlein and Sue Zeidler in Los Angeles; Editing by Edwin Chan)