Amazon reported a fall in profit, but a surge in sales on Tuesday. The surge was mainly attributed to strong sales of Kindle e-reader, subsidized by advertising.

"Low prices, expanding selection, fast delivery and innovation are driving the fastest growth we've seen in over a decade," Amazon's CEO Jeff Bezos said in a release.

Bezos said Kindle 3G with Special Offers priced at $139 has become the top selling e-reader since being launched two weeks ago.

Amazon report showed revenue in the recently finished quarter increased 51 percent to $9.91 billion but net profit decreased eight percent to $191 million compared to last year same period.

The results contrast with Q1, when its income decreased 33% due to a huge hiring and a 42% surge in operating expenses.

Operating margin fell to 2.0 percent from 4.1 percent a year earlier.

The Seattle-based company is also expected to follow the success of its Kindle e-reader by introducing a multi-purpose tablet this fall.

However, the company has declined to comment on recent reports that it plans to introduce a tablet computer in order to tap into growing market dominated by Apple's iPad.

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