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Amazon rides shoe-fetishist to 68% profit leap

As Kindle goes - gasp! - brick and mortar

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Amazon says its profits climbed 68 per cent in its first quarter. And it says the Kindle "remains our #1 bestselling product." But, yes, it's unclear how much of that profit rise came from the seminal ereader, which now sits in the shadow of the Apple iPad.

Amazon has never given specific Kindle sales figures. And this didn't change with today's announcement of the company's first-quarter earnings.

During the quarter that ended on March 31, the etailer pulled in profits of $299 million, up 68 per cent from the same quarter last year. Revenue grew to $7.13 billion, a 46 per cent leap from 2009.

But these numbers aren't quite as bright as they seem. On January 1, Amazon introduced an accounting change that tags part of its Kindle sales as hardware revenue, and that means it shows up on the balance sheet sooner than it did in the past. What's more, this is the first quarter where the company has benefited from its purchase of shoe-fetishist etailer Zappos, which it acquired last summer for $850 million.

In any event, the company's Q1 number beat the guesses of the Wall Street guessmen. But its predicated Q2 numbers fell below the guesses of the guessmen, and its stock took a tumble, falling 6 per cent in after-hours trading.

This, however, is not where Bezos is looking. "We remain heads-down focused on customers," read a canned statement from CEO and founder Jeff Bezos. "Amazon Prime has just celebrated its fifth anniversary, adoption of Amazon Web Services continues to accelerate, Kindle remains our #1 bestselling product, and earlier this week, Kindle selection reached 500,000 titles."

Which sounds a lot like what he says every quarter. The company not only declines to give Kindle sales figures, it also stays mum on the size of Amazon Web Services, which provides on-demand access to computing resources and applications.

But the company does like to tell you how many titles are in the Kindle store. And in the long run, it's the ebooks Amazon is most interested in selling - not the physical ereaders. Amazon recently introduced Kindle software for the iPad, and such software is already available for the iPhone, the PC, and the BlackBerry.

That said, the physical Kindle is still a means of selling those ebooks, and today, Amazon confirmed that for the first time, the device will be available in a good old-fashioned brick and mortar outlets. The Kindle is expected to hit Target stores in the US later this month. ®

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