Amazon Q4 2011 results disappoint

The markets reacted negatively to Amazon's Q4 figures in the US, showing a 35% increase in revenue, to US$ 17.4 billion but the bottom line profits fell by 57% as Amazon restructured to compete in the online jungle, with expensive new sales hubs opening.

Their cost base grew by 38% as they promoted the new low cost Kindle, selling around 6 million of them in Q4, margins pared to the bone and with low cost or free shipping included, expecting further Kindle related revenue to come from the Ebooks and Apps Kindle owners may purchase.

The current quarter may show an operating loss due to the implementation of it's investment strategy and this has surprised analysts, the share price dropping by over 8% in after hours trading, as investors digested these figures, focusing on the huge rise in costs.