Thread: Amazon profits dive after heavy Kindle investment

Profits at the online retailer Amazon have dropped 73% after the company invested heavily in the Kindle tablet computer.

The company, the world's largest online internet retailer, said third quarter net income was $63m (£40m, 45m euros).

During the period it launched the Kindle "Fire" model, which runs apps and streams films and other non-text content.

The results left Amazon shares down 12% in after hours trading.

The company said that sales had grown by 44% and that last month, on 28 September, it had its "biggest order day ever for Kindle, even bigger than previous holiday peak days".

It now offers four Kindle devices, including a 3G model.

BBC News - Amazon profits dive after heavy Kindle investment


This is what happens when a company that sells books invests in a device that means you don't have to buy books anymore cause you can download them for free. Although if they didn't do it with Kindle someone else would do it.

this could actually be misleading,

US GAAP requires companies to expense their R&D, and for a book company like Amazon, the Kindle is regarded as R&D, not capital assets (software companies though, like MS, can capitalized certain R&D costs under certain conditions)

by next quarter if the Kindle sells well, they might record very high profit