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Media sales at Amazon slowed in its latest quarter, with worldwide media sales up just 1%, flat in the US, and up by 3% internationally. Sales growth at its international businesses was almost exactly the same as over its first quarter, up 28% without the effect of exchange rates, or 16% in real terms. Both measures are significantly behind what it reported this time last year, when the international divisions grew by 47%, or by 34% when exchange rate movements are excluded, with media sales up by 38%.
The results came as founder and c.e.o. Jeff Bezos issued what he called a "deep apology", for removing illegal digital copies of George Orwell's 1984 from users' Kindles. On the Amazon Kindle forum, Bezos wrote: "Our 'solution' to the problem was stupid, thoughtless, and painfully out of line with our principles. It is wholly self-inflicted, and we deserve the criticism we've received. We will use the scar tissue from this painful mistake to help make better decisions going forward, ones that match our mission."
As usual Bezos was less fulsome when talking about the online retailer's performance: "We’re staying heads down focused on providing customers low prices, vast selection, and fast delivery." There was nothing on Kindle sales, the launch internationally of its Kindle device, or on the slowing sales at its core media segment.
International segment sales, representing the company’s UK, German, Japanese, French and Chinese sites, were $2.2bn, up 16% from second quarter 2008. Excluding the unfavourable impact from year-over-year changes in foreign exchange rates throughout the quarter, international sales grew 28%. Within this segment, media sales rose from $1.26bn to $1.29bn. Operating profit grew to $179m, compared with $149m last year.
Worldwide media sales grew 1% to $2.44bn. But Amazon said that excluding the impact of foreign exchange rates throughout the quarter sales grew 7%. This time last year, worldwide media sales were reported to have grown by 31%.
Overall at Amazon.com net sales increased 14% to $4.65bn in the second quarter, compared with $4.06bn in second quarter 2008. Operating income decreased 27% to $159m in the second quarter, compared with $217m in second quarter 2008. Amazon put the decline in profits down to currencies, exceptional losses this quarter, and an exceptional net gain in the comparable quarter last year.