Amazon.com said Tuesday that its net income fell 33 percent in the latest quarter

While Amazon's profit was a disappointment, its revenue topped expectations. The company's management says that the stronger sales mean Amazon needs more warehouses and upgraded research, which require bigger investments that cut into revenues.

Amazon's expansion is as well being complicated by ongoing battles with states over when Internet retailers should be forced to collect sales taxes from their clients.

But revenue rose 38 percent to $9.86 billion, ahead of the $9.54 billion that analysts were forecasting, and up from $7.13 billion a year ago.