Amazon destruction: Online retailer loses almost $500m in biggest ever quarterly loss. Here’s why

Amazon’s net losses reached almost half a billion dollars over the past three months, making it the worst quarterly loss in the company’s history, the retail giant has revealed.

A surge in new projects including developing drone delivery technology has been blamed for the $437m black hole in the company’s finances.

The figure is more than 10 times the $41m loss it recorded over the same period last year.

The news was greeted with a share drop of 11%, wiping an incredible $15bn off the company’s value overnight.

Meanwhile, revenues have risen by 20% to $20.58bn but that was still below market forecasts of $20.85bn.

And more bad news is on the way as the company has predicted that sales over the upcoming Christmas period are likely to be between $27.3bn and $30.3bn, someway off the $30.89bn analysts expected.

Amazon CEO Jeff Bezos has allowed operating expenses to soar as new projects including millions spent on drone technology, cloud computing and new web servers have piled up. The spending frenzy has also seen the firm splashing out to buy media rights to work with a plethora of firms including content providers Netflix and Hulu as well as various Cable TV companies.

In recent months the company has also announced flashy new London offices, bought gaming site Twitch for $970m, and also unveiled its smartphone eariler this year.

Amazon’s chief financial officer Thomas Szkutak said: “We’ve been, for several years now, in investment mode because of the opportunity in front of us,” the Telegraph reports.

“There is still lots of opportunity in front of us, but we know we have to be selective.”

But it seems many of Amazon’s shareholders may not have the patience to wait for the investments to yield returns. The 11% fall saw the value of shares in the company tumble to $278.2 - their lowest value in over a year.

However, the eagle-eyed folk at Business Insider note that amongst the sliding figures, there is one area where the company is doing particularly well. And that is in the growth of the company’s mysterious “other” revenue, which grew by 37% in comparison to the same period last year, making it Amazon’s fastest growing revenue stream. The company doesn’t specify precisely what this “other” revenue is, but according to BI, it is understood to come from Amazon Web Services – its cloud computing arm.

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