Amazon.com flexed its muscle during the recent holiday shopping season. The online retail giant said fourth-quarter sales were up 42 percent to $9.52 billion, and profit for the quarter jumped 71 percent to $384 million, or 85 cents per diluted share.

The results handily beat Wall Street estimates. Analysts polled by Thomson Reuters had been expecting sales of $9.04 billion in revenue and earnings of 72 cents a share.

Amazon is extending its reach over the growing ecommerce market, said Dan Geiman, an analyst covering the company for Seattle brokerage McAdams Wright Ragen.

"Online took share from brick-and-mortar during the holidays, and Amazon took share from the rest of online retail during the quarter," Geiman said. "It was a hugely successful quarter for them. They're definitely on a roll right now."

Online shoe retailer Zappos.com contributed approximately $200 million to Amazon's Q4 revenue. Amazon completed its acquisition of Zappos on November 1, 2009.

Amazon's results benefited from favorable foreign exchange rates. Excluding the impact of those exchange rates, Amazon's sales would have increased by 37 percent in the fourth quarter.

For the full year 2009, sales increased 28 percent to $24.51 billion. Profit totaled $902 million in 2009, up 40 percent from the previous year.

Amazon's international sales grew faster than its North American business in Q4. The company's international segment sales from its U.K. German, Japanese, French and Chinese websites grew 49 percent to $4.56 billion. North America sales from Amazon's U.S. and Canada sites grew 36 percent to $4.96 billion.

On the product side, Electronics and General Merchandise, a category that includes TVs, laptops, toys and clothing, grew 60 percent to $4.61 billion. Media sales, including books, CDs, video games and consoles, grew 29 percent to $4.68 billion.

Amazon's Kindle electronic reader faces increasing competition in the digital book market, including from Apple's new iPad tablet, which was just unveiled yesterday.

Amazon CEO Jeff Bezos, in a statement, said that "millions" of people now own Kindles — a noteworthy bit of information from a company that normally reveals nothing about Kindle sales — though Bezos didn't elaborate much beyond that.

"Millions of people now own Kindles," Bezos said. "And Kindle owners read, a lot. When we have both editions, we sell 6 Kindle books for every 10 physical books. This is year-to-date and includes only paid books -- free Kindle books would make the number even higher. It's been an exciting 27 months."

Amazon CFO Tom Szkutak, on a conference call with analysts, gave another hint about Kindle sales. He said Amazon — due to a change in the way it accounts for Kindle-related revenue —has about $500 million in deferred revenue from Kindle shipments from last year that it will be spread over 2010 and 2011.

Szkutak also signaled that Amazon will continue to add products to its websites, saying, "We still have a lot of room to add additional selection." Szkutak said Amazon's third party seller program — letting outside retailers sell products on its sites — continues to "grow nicely."

Amazon said its board of directors had authorized the company to repurchase up to $2 billion in common stock. The new program replaces the board's previous 2008 repurchase authorization of up to $1 billion in shares.

The company gave guidance for the first quarter of 2010, saying it expects sales to be between $6.45 billion and $7 billion, or to grow between 32% and 43% compared with first quarter 2009. Operating income is expected to be between $275 million and $365 million, or to grow between 13% and 50% compared with first quarter 2009.

Szkutak said Amazon will incur capital expenditures of approximately $100 million in 2010 related to its upcoming move to a new headquarters campus in Seattle's South Lake Union neighborhood. That move is expected to start this spring and last several years.

Amazon released earnings after the market closed Thursday. The company's shares rose 2.67 percent to close at $126.03 for the day, and were up another 2 percent in after-hours trading.

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