US online retailer, Amazon has said that its profits plunged 73 per cent in its latest earning news. The company’s revenues were at 10.88 billion while the stock price, which were at $230 a share at the beginning of the week were at $217.20.

The company has a trailing price/earnings ratio of 115 and there is a possibility that it will suffer an operating loss in the fourth quarter. However, many believe that the company could be one of the exceptions and could turn around its prospects.

Amazon is transforming itself from being an online retailer offering just about anything to a provider of amazing e-book readers and now tablet computers. It has also entered into the cloud computing based services in a big way. Analysts expect Amazon to sell about 26m Kindle devices next year and added with sales from e-books, it could generate revenues of nearly about $6 billion.

Some appear concerned that the company is inviting financial trouble by losing $5 or $10 on the sale of each $199 Kindle Fire device. However, this can be compensated by the sale of online content from the vast collection maintained by the company. The so called sell-off is a opportunity for the company to enter the market with an affordable option and could help it attract new users.