Rising IT expenses eat into Amazon's profits

Amazon sees a dip in net income despite record 51 per cent increase in revenue

Online retailer Amazon has seen a big surge in revenues year on year, but rising costs meant net income for Q2 was down on 2010.

The firm saw its revenue increase 51 per cent to $9.91bn (£6.05bn) for the three months to 30 June 2011, compared with $6.57bn in Q2 2010.

This marks the fastest growth in revenue the firm has seen in more than a decade. However, the firm's profit from the same period does not reflect this.

Expenses relating to technology and content rose by 71 per cent on the same period last year, from $408m to $698m.

Order fulfilment and marketing costs also rose by 62 per cent each, from $582m to $941m and from $341m to $211m, respectively.

These factors contributed to the firm seeing its net income decrease by eight per cent to $191m in the quarter, compared with net income of $207m in Q2 2010.