Amazon shares have fallen more than 9pc after the online retailer warned of a possible loss in the current quarter and its quarterly results missed Christmas expectations.
It was better news for Google, whose quarterly revenue beat Wall Street's target despite an ongoing decline in prices for its online ads and deepening losses at Motorola, the handset-making division to be sold to China's Lenovo.
Amazon, the world's biggest online retailer, said it expects operating results for the current quarter to range from a $200m (€148m) loss to a $200m profit, compared with a profit of $181m a year earlier.
The outlook was somewhat conservative, reflecting Amazon's focus on investing aggressively in growth opportunities and new initiatives, analysts said.
"In addition to increased internal investment to build out the digital library, distribution centre capacity and enhance offerings... Amazon may be facing further margin pressure due to the success of its Amazon Prime offering," Benchmark analyst Daniel Kurnos wrote.
Amazon charges users an annual fee of $79 for its "Prime" two-day shipping and online media service, considered instrumental in driving online purchases of both goods and digital media.
The company said it was considering raising prices for Amazon Prime by $20-$40 in the United States due to higher fuel and transportation costs and increasing usage.
Analysts said the price increase would add about $600m to Amazon's annual revenue while still representing compelling value to customers.
The company more than doubled its profit to $239m, or 51 cents per share, in the fourth quarter, but fell short of analysts' average estimate of 66 cents per share.
Amazon faced lofty expectations going into one of the most heavily competitive festive seasons in years, with retailers vying to out-do each other with steep discounts.
"Amazon continues to prove that its business is less holiday-driven than many other retailers due to the high volume of 'staple' and recurring unit sales," Susquehanna Financial analyst Brian Novak said.
Shares in Google, which have risen more than 20pc in the past three months, rose nearly 4pc to $1,178 in after-hours trading on Thursday.
Google executives said in a conference call that the company benefited from strong demand from brand marketers and retailers in the fourth quarter, as well as healthy demand for online ads in international markets.
"In the holiday season one thing has become very clear, the web has truly become the new holiday store window," Google chief business officer Nikesh Arora said.
Paid clicks on Google's online ads jumped 31pc during the typically busy holiday quarter, but the average cost per click that marketers paid the company slid 11pc.
Google's advertising rates, like those of other internet companies including Yahoo, have been under pressure as more consumers access its online services on mobile devices such as smartphones and tablets, where advertising rates are lower than on PCs.
Motorola, which Google has agreed to sell to China's top PC maker for $2.91bn, saw operating losses of $384m in the quarter, more than double the $152m loss from a year earlier.
The internet search giant has struggled to turn the unit around in the face of steep competition from Apple, and the sale of the loss-making unit is considered a positive for Google. (Reuters)