Amazon just reported its Q4 2011 results, and while sales grew 35 percent to $17.43 billion, the company's increased operating costs means overall profit fell over 50 percent to $177 million, compared to $416 million in Q4 of 2010. Total sales and profit for the year followed suit, with net sales growing 41 percent over 2010 to $48.08 billion but profit falling by 45 percent: Amazon took home $631 million last year, compared to $1.15 billion in 2010. We're guessing that the loss Amazon's taking on each Kindle Fire is driving that equation as well — Kindle sales were triple from a year ago — but Amazon's operating costs have also gone up in every category, especially fulfillment (packing and shipping) and sales costs.

Of course, these numbers will turn around dramatically if all those Kindle Fire owners buy a lot of content, but for now Amazon's balance sheet is definitely showing the results of a big bet on its digital media strategy. And earnings aren't expected to improve in the first quarter of 2012 — Amazon is projecting that profits will decline between 162% and 69% compared to Q1 2011, meaning that the company could actually be losing money early this year.

Amazon, meanwhile, has refused to answer questions about its profits. When asked about decreasing shareholder value at the earnings press conference, CFO Tom Szkutak said "I'm not sure how to answer that, or exactly what you mean," adding that although there had been "pockets of softness" in Amazon's performance, some attributed to the Thailand floods, he was "incredibly optimistic about the opportunity that we have." Some more relatively specific questions, like whether Amazon was planning to split video streaming into a separate service from Prime or if the Kindle Fire was cannibalizing the rest of the Kindle base, were left unanswered as well. We'll certainly see how and if Amazon can make up its spending this year, but so far the company hasn't given us much to go on.