Amazon.com said last night that net profit fell in its crucial holiday quarter as shipping and technology costs rose.
The company's revenue was shy of Wall Street expectations, sending shares down more than 8 per cent.
Fourth-quarter net income fell to $199 million, or 47 cents per share, from $346.7 million, or 82 cents per share, year-on-year. Sales rose 17 per cent to $2.98 billion from $2.54 billion a year earlier, but fell short of analysts' targets of $3.08 billion.
Amazon said that North American sales grew 21 per cent to $1.68 billion, while international sales grew 13 per cent to $1.29 billion.
During the quarter, Amazon's investment in technology and content grew 57 per cent to $132 million, compared with $84 million a year earlier.
The Internet retailer joined a string of major Web companies to disappoint Wall Street with quarterly results or outlooks, including Google, Yahoo and ebay.
Analysts have been concerned that Amazon faces increasing competition from the online sites of brick-and-mortar retailers such as Wal-Mart Stores and Target.