That’s what Larry Dignan is predicting.

I’m sceptical. I like what Amazon is doing with its infrastructure services, but I’m guessing they are low margin and price-sensitive; it’s going to be difficult to pump up its value to equal the retailing side.

My hunch is that Amazon will work at bringing its retailing and cloud computing businesses together. Look at the Flexible Payments Service and DevPay:

Amazon customers can pay using the same login credentials and payment information they already have on file with us. This helps Amazon customers keep their payment information secure and removes the friction you would face if you required customers to enter their payment information before they could make a purchase.

Sounds like a bank, right? Now look at what eBay is doing with PayPal (which it is moving towards making obligatory), and Google with Google Payments – note that the new AppEngine can use Google accounts as an identity service.

Banking is highly profitable. These three giants will be fighting over how to get a small slice of more of our Internet transactions – which will be an increasing share of our total transactions.

Like eBay, Amazon already has a strong business handling the storefront and payments for third parties in its marketplace.

I’ll be surprised if things like S3 and EC2 become more important to Amazon than its retailing; but I won’t be surprised if identity and financial services become the core of its business, rather than running warehouses and shipping out goods.

Update: clearly not yet.