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

(Newser) –'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."