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Amazon Profit Plummets 73%

Company cites pricey investments in streaming, Kindle Fire

By Neal Colgrass, Newser Staff

Posted Oct 25, 2011 6:27 PM CDT

(Newser) – Amazon.com's lavish spending has cut into profits and left investors rattled, the Wall Street Journal reports. The company announced a dizzying 73% drop in third-quarter profit today and saw its stock fall by 12%, or $28, to $198 in after-hours trading. The reason: Amazon is investing big-time in new shipping centers and cloud storage as it expands further into consumer gadget sales and digital content.

The company also predicted lower-than-expected profits for the fourth quarter, citing its investment in online streaming and the new Kindle Fire. Still, net sales are up to $10.88 billion from $7.56 billion a year ago. Finance chief Tom Szkutak predicted that Amazon's investments would pay off: "Once customers purchase a Kindle and are carrying around this really massive selection at their fingertips, they're buying more content."

Amazon CEO Jeff Bezos addresses a press conference to introduce new Amazon and Kindle products in New York, September 28, 2011. (Getty Images)

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Showing 2 of 6 comments

OuttaHere

Oct 25, 2011 10:13 PM CDT

Amazon's spending sounds a lot like the spree Americans went on back a few years. Guess they aren't smart enough to read the handwriting on the wall. Amaz(on)ing.

Yourself

Oct 25, 2011 6:58 PM CDT

"Once customers purchase a Kindle and are carrying around this really massive selection at their fingertips, they're buying more content."" If they buy the Kindle Fire, maybe so, but just the kindle??? No... Just the kindle gives them access to a library of books they can buy. Or they can find them SUPER easily online for free and cross-load them onto their kindle for free.. Just like you can buy the Kindle with ads and jailbreak it to not have the ads. Thus saving you some money on the EXACT same hardware.

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Amazon Profit Plummets 73%

Company cites pricey investments in streaming, Kindle Fire

OTHER STORIES ON OUR RADAR

profits • stock price • quarterly profits • Amazon • Kindle Fire

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More Newser Stories

Android May Outsell iPad by 2016

Amazon's lower prices might make the difference: report

Amazon Plans Brick-and-Mortar Boutique

Online megastore may also launch national chain

Guess How Many Kindles We're Buying a Week?

1M!

Amazon Loses Money Every Time a Kindle Fire Is Sold

...and it's totally OK with that

New Kindle Can't Touch iPad

It'll be a competitor, but Apple has little to fear

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