Sales surged to $12.95bn (£8.2bn) in the three months to December, up from $9.52bn (£8.09m) in the fourth-quarter of 2009, and profit rose 8% in the three months to December to $416m (£353.4m).
Amazon’s reported profit was slightly lower than analysts’ predictions largely due to the retailer offering discounts and free delivery over the Christmas period to attract customers.
Operating margins declined to 3.7%, from 5% at the end of 2009, and the online retailer warned it may slip further in the first three months of 2011 as it invests in technology, new distribution centres and acquisitions in order to grow the business.
Earlier this month, Amazon took full control online film rental service LoveFilm, buying the 58% in the company it did not already own for an undisclosed sum.
In the US, Amazon says sold 115 e-books for the Kindle for every 100 paperback books bought but declined to report specific sales figures.
Founder and CEO of Amazon.com Jeff Bezos says: “Thanks to our customers, we achieved two big milestones: we had our first $10bn quarter and after selling millions of third-generation Kindles with new Pearl e-ink display during the quarter, Kindle books have now overtaken paperback books as the most popular format on Amazon.com.”