Amazon has reported a 57% drop in profits for the fourth quarter of the year as the maker of the Kindle was hit by soaring costs.
The Seattle-based business saw revenue soar by 35% to $17.4bn (£11bn), below forecasts.
But costs grew by 38% to $17.2bn as the world's largest internet retailer looked to attract customers by pushing free shipping and, analysts believe, selling cut-price Kindle devices.
Net income fell to $177m (£112m), from $416m (£264m) in the same period a year earlier.
Investment in new sales centres has also eaten into profits, the company said.
Share prices dropped nearly $16.71 (£10.60), or 8.6%, to $177.73 (£112.75) in after-hours trading after the latest figures were announced.
Sales of Amazon's Kindle tablet computers and e-reader gadgets nearly tripled compared with the final quarter of 2010.
As usual the company did not give exact sales numbers for the devices, but its chief financial officer, Tom Szkutak, said he was "very encouraged" by early spending habits of owners of the new Kindle Fire tablet computer.
Owners of the new device are buying more digital content such as e-books, video, music and apps, he told reporters.
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