Amazon Plunges on Forecast (Update)

CEO Jeff Bezos' initial comments were in relation to the sales of electronic book reader Kindle, and how customers have bought 1.6 times as many books on the device compared to physical books.

Kindle has more than doubled the number of book titles available since its launch a year ago, to 185,000 titles.

But most analysts were more interesting in discussing the economy and its effect on Amazon. One of them noted that the company had increased its headcount by a sizeable 2,100 employees in the third quarter, raising questions as to whether it planned to make any cost reductions similar to Yahoo!(YHOO Quote) and eBay(EBAY Quote) -- both of which have announced job cuts.

Bezos said that the company will continue to invest in its business, "but we'll be prudent in how we'll make those investments."

Sales of worldwide electronics and other general merchandise for Amazon were up 52% year-over-year in the third quarter to $1.64 billion. In the second quarter, sales grew 58%.

Worldwide media sales were up 19% to $2.49 billion. They had grown 31% in the second quarter.

North American segment sales, including Amazon's sites in the U.S. and Canada, grew 29% to $2.3 billion, but down from a 35% increase in the second quarter.

Amazon Chief Financial Officer Tom Szkutak said the company saw slower rates of growth in the latter half of the quarter coinciding with the financial market meltdown. He also noted a strong dollar has hurt the company's businesses overseas.