Aug. 11 (Bloomberg) -- Amazon.com Inc. rose to a seven- month high in Nasdaq trading after Citigroup Inc. doubled its estimate for the number of Kindle electronic reading devices the world's largest Internet retailer might sell this year.

The company may sell 380,000 Kindles in 2008, up from its earlier projection of 190,000, Citigroup analyst Mark Mahaney wrote yesterday in a research report. Apple Inc. sold 380,000 iPod music players in 2002, the first year they were sold, according to Mahaney. He recommends buying the stock.

``Kindle is becoming the iPod of the book world,'' Mahaney wrote. ``Kindle could be one of the top `gadget' gifts this holiday season.''

Amazon.com, which began as an online bookseller, introduced the paperback-sized Kindle in November and has increased the number of books, magazines and newspapers offered by two-thirds. Chief Executive Officer Jeff Bezos wants to compete with Apple by offering media services, including movie and music downloads, and reduce its reliance on sales of books, CDs and DVDs.

``Kindle's apparent success highlights the very significant and consistent innovation focus that Amazon has maintained over the past five years and helps hedge the company against the digitization of media products,'' Mahaney wrote in the note.

The retailer began selling the Kindle at $399, with more than 90,000 titles available. The Kindle now costs $359 and Amazon.com offers more than 150,000 downloads.

Kindle-related sales may hit $1 billion by 2010, or 4 percent of Amazon.com's revenue, according to Mahaney. Previously, Citigroup had estimated revenue of $400 million to $750 million.

Amazon.com gained $7.58, or 9.4 percent, to $88.09 at 4 p.m. New York time in Nasdaq Stock Market trading, the highest value since Jan. 7. Before today the stock dropped 13 percent this year, after more than doubling last year.

Amazon.com doesn't disclose Kindle sales, spokeswoman Heather Huntoon wrote today in an e-mail.

To contact the reporters on this story: Heather Burke in New York at hburke2@bloomberg.net; Eric Martin in New York at emartin21@bloomberg.net.

Last Updated: August 11, 2008 16:27 EDT