Amazon: E-book sales increased 70% in 2012, media revenues up 8% in Q4

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Five years after Amazon (NASDAQ:AMZN) launched its first Kindle e-reader device, founder and CEO Jeff Bezos said e-books are now "a multi-billion dollar category," with sales increasing 70 percent in 2012.

"In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just 5 percent," Bezos said in conjunction with Amazon's fourth quarter earnings report, issued Tuesday.

The digital retail giant reported sales of $21.27 billion, a 22 percent year-over-year jump. Net income nevertheless fell to $97 million, down 45 percent compared to $177 million during the year-ago period, as a result of increased investment in the company's distribution network and its Kindle range of devices.

Amazon reports that for the second year in a row, its Android-powered Kindle Fire HD tablet was its best-selling and most-gifted item. Amazon has never disclosed Kindle device sales totals, but said consumer demand for its Paperwhite e-reader exceeded supply. "The team is working very hard to make sure we have good in-stock going forward on that product, but we certainly could have sold more in Q4," said CFO and Senior Vice President Thomas Szkutak during Amazon's earnings call.

Amazon added that digital media revenues totaled $6.51 billion during the fourth quarter, up 8 percent. "I can't give you specific numbers but we have seen very good progress on a number of our other digital media categories," Szkutak said. Amazon now offers more than 23 million Android apps and games, movies, TV shows, songs, magazines, e-books and audiobooks, an increase from 19 million at the end of 2011.

Looking ahead at the first quarter of 2013, Amazon anticipates net sales between $15 billion and $16.6 billion, increasing anywhere from 14 percent to 26 percent compared to the first quarter of 2012.

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