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Amazon international cloud growth dwarfed by American performance

Billy MacInnes

Growth at Amazon's web services division internationally is falling further behind the company's performance in the North American market where AWS reported a massive revenue growth rate of 85% for its latest quarter.

Overall sales growth at AWS for the second quarter rose 75% excluding the effect of exchange rates, but international sales growth was 13% compared to 18% in the corresponding quarter in 2010 and first half revenue was up 12% compared to 31% for the same period in the previous year.

The figures suggest the AWS operation is not gaining traction internationally to anywhere near the same level as in North America.

International revenue from the AWS operation was $34m for the second quarter, just over a tenth of North American sales of $325m. For the same period last year, international sales were equivalent to 15% of North American revenue.

Overall, Amazon reported a 51% rise in second quarter sales to $9.91bn, although profits declined just under 8% to $191m. Sales of electronics and other general merchandise, which increased by 67% in North America and by 71% internationally, contributed around 59% of the company's worldwide revenue. Media sales declined from 44% to 37% of overall revenue while AWS rose from 3% to 4%.

Commenting on the figures, Amazon CEO Jeff Bezos said that "low prices, expanding selection, fast delivery and innovation are driving the fastest growth we've seen in over a decade". He also highlighted the success of the Kindle 3G which had become the company's bestselling Kindle product.

Looking forward to the third quarter, Amazon predicted overall sales growth of between 36% and 47% but warned that operating income could fall by anywhere from 37% to 93%.


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