Amazon to Buy $1B of Itself (AMZN.O: Quote, Profile, Research) said on Friday its board authorized the repurchase of up to $1 billion of the company’s common stock over the next two years, and its shares rose 3.3 percent.

Amazon said its board also authorized a debt repurchase program, enabling the company to redeem, repurchase, or retire up to all of its outstanding 4.75 percent convertible subordinated notes due next year, and 6.875 percent convertible subordinated notes due in 2010.

The company said it has $899 million in principal outstanding on its 4.75 percent convertible subordinated notes.

With Amazon “sitting on cash and marketable securities exceeding $3 billion, we think these programs will be beneficial to shareholders,” Standard & Poor’s specialty retail analyst Michael Souers said.

[cob:Related_Articles]On January 31, Amazon said it reached a deal to buy digital audio books provider Audible (ADBL.O: Quote, Profile, Research) for about $300 million, aiming to bolster its audio download offerings.

Souers, who reiterated his “hold” rating on the stock, also raised his 2008 and 2009 earnings estimates to $1.62 and $2.21 a share, respectively, from prior targets of $1.60 and $2.15.

On January 30, it reported net profit rose 112 percent and offered a bullish 2008 sales view above Wall Street targets, but also posted a decline in profit margins.

Amazon’s shares traded up $2.32 to $73.23 Friday morning on Nasdaq.

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