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Tickers in this Article: AMZN, NFLX, T, GOOG, KFT, SBUX (Nasdaq:AMZN), the online retailing giant, has been gradually expanding its reach into other areas. Lately, the two most notable areas are its cloud computing services and its recent entry into streaming video.

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Small Changes, For Now
Amazon, which does roughly $34 billion in annual sales, made a small splash with the recent announcement that it would be offering streaming video service as part of its "Prime" subscription service. Netflix (Nasdaq:NFLX) remains the clear leader in streaming video as it has established an enormous head start in the business. Initial projections are for Amazon to generate perhaps $400 million in annual revenue from streaming video, in comparison to estimates that place Netflix's take at over $4 billion in 2012.

Amazon Vs. Netflix, or Is There More to It?
Whether the threat to Netflix is large or small, the long-term story may be more about Amazon's attempts at strengthening its overall business rather than simply going after Netflix. A clue to Amazon's approach can be gleaned from the company's recent earnings report, which the Street found partially indigestible, as it choked on the bit about upcoming capital expenditures. This was seen as slowing growth for a while, a point on which the company took the long view. As Amazon sits on nearly $9 billion of cash with not much over $500 million in debt, Amazon doesn't appear too concerned about one or two quarters of results when it clearly has bigger things in mind.

To the Cloud
Consumers know of Amazon as a way to buy books and just about anything else online, but Amazon's background business, Amazon Web Services, its cloud computing business, has intriguing growth possibilities. Cloud, or off-site data storage, is currently estimated at perhaps 5% of the $1.5 trillion in corporate information technology spending, so it appears to be in its infancy. Amazon's revenue from its stake in its storage infrastructure is currently modest for sure, but the scale of opportunity is massive.

The Wider View
If investors focus only on the above numbers, as well as CAPEX, which may eat into earnings growth in the year ahead, they miss the larger view. Netflix's present domination in streaming video renders Amazon's immediate payoff as small. But Amazon doesn't have to head off Netflix in the business, as Amazon still retains its growing, thriving multi-billion online retailing enterprise. Streaming video is vital to Netflix; it's just another growth avenue for Amazon.

In cloud computing, Amazon joined such players in the space as AT & T (NYSE:T) and Google (Nasdaq: GOOG), as well as traditional IT infrastructure providers. Cloud services are used by a multitude of companies such as Kraft Foods (NYSE:KFT) and Starbucks (Nasdaq:SBUX), and now consumers, with an array of growing ancillary management and analytic options.

Amazon, like Google, has managed to grow, develop and broaden keep itself without diluting its primary business. Jeff Bezos and his management team are positioning Amazon not for quarters ahead but for years. (For additional stock analysis, see Bearish On Netflix.)

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