Amazon Bleeds Value After Posting $126m Loss

Amazon's strategy of putting investment ahead of profits prompted a further share sell-off in after-hours trading last night, when it emerged losses deteriorated in its last quarter.

The internet retailer's costly shift towards digital content and consumer electronics businesses was a key factor behind its net loss of $126m (£74.1m) - double what analysts had been expecting.

The figure compared to a loss of $7m in the same period a year earlier.

Total (NYSE: TOT - news) operating expenses rose 24% to $19.36bn on revenues of $19.34bn - which themselves represented an increase of 23%.

Shareholders - who have long been frustrated by Amazon's focus on growth over profit - registered their protest through a 10% fall in its share price .

It meant that Amazon's value had plunged 20% during 2014 to date at a time when many world indices are at record highs and there was no sign that the company - the largest online retailer in the US - would change tack soon under the leadership of its chief executive Jeff Bezos.

Amazon forecast an operating loss of between $810m and $410m for the third quarter ending in September, a sharp increase from a loss of $25m a year earlier.

Amazon is investing heavily in new businesses and hardware products, as it prepares to take on major tech rivals such as Apple (NasdaqGS: AAPL - news) , Google (Xetra: A0B7FY - news) and Netflix (Xetra: 552484 - news) .

Chief financial officer Tom Szkutak said Amazon had a "tremendous amount of opportunities" and its investments were "certainly impacting short-term results".

He disclosed that the firm was spending more than $100m on original video content in the third quarter alone.

He continued: "We're going to continue to invest on behalf of customers with the understanding that long-term has to come".

New products and businesses unveiled this year include a subscription book service, new digital content for its Prime online video service, a TV streaming-box and the upcoming Fire smartphone, which makes its US debut on Friday.

Amazon also continues to spend billions of dollars expanding its fulfilment centres, or warehouses, across the world.