Amazon Profit Plummets 73%

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." (More Amazon stories.)