Amazon is also spending heavily on new distribution warehouses and technology to support its cloud-computing businesses, Amazon Web Services. It is also investing hundreds of millions of dollars a year on digital content to sell through its Kindle tablets and e-readers.
Amazon Chief Financial Officer Tom Szkutak said the company will continue investing heavily in technology, infrastructure and digital content.
The company spent $1.51 billion on shipping and warehouses in the third quarter, up from $1.12 billion a year earlier. Technology and content spending reached $1.19 billion, up from $769 million in the same period last year.
The Kindle gadgets are being sold at cost, pressuring earnings in the short term. Amazon hopes to make money when customers use them to buy more physical and digital products from the company.
Amazon launched new Kindle Fire tablets in September and CFO Szkutak said demand has been "fantastic."
Chief Executive Jeff Bezos said in a statement that the new $199 Kindle Fire HD, the new Kindle Paperwhite e-reader and the entry-level $69 Kindle e-reader are the top three best-selling products on Amazon, based on unit sales.
Szkutak said Kindle Fire tablet users are purchasing a lot more digital content through the devices, as well as watching free video content.
The introduction of new tablets and e-readers should be good for digital content sales going forward, he added.
Europe's sovereign debt crisis and recession is reducing consumer demand, sparking concern that even fast-growing Internet companies may be affected.
EBay Chief Financial Officer Bob Swan said last week that the company expected an "OK" holiday season, partly because of macro pressure in Europe.
Amazon said on Thursday that revenue from North America was $7.88 billion, up 33 percent from a year earlier. International sales, including Europe, totaled $5.92 billion, up 20 percent from the same period in 2011.
