Expansion cuts into Amazon's profits

Online retailer Amazon has revealed a steeper-than-expected drop in profits after the cost of expanding its operations offset a jump in sales.

Net income of $201 million (122m) was down by a third on a year ago, despite a 38 per cent jump in revenues to $9.86 billion. The company said its strong sales growth meant it needed more warehouses and upgraded technology, which has cut into earnings.