The fall came despite an increase in revenues during the period, from £11.08 billion a year ago, to £13.54 billion- a jump of 22%.
That growth came as the world’s largest internet retailer bagged a big share of internet spending during the crucial holiday period.
After reporting the results, Amazon’s shares rose by close to 7%.
“We’re now seeing the transition we’ve been expecting,” said Jeff Bezos, founder and chief executive of Amazon.com.
“After five years, e-books is a multi-billion dollar category for us and growing fast – up approximately 70% last year.
“In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just 5%.
“We’re excited and very grateful to our customers for their response to Kindle and our ever-expanding ecosystem and selection.”
The Seattle based company also said operating income increased by 56% to £257 million in the fourth quarter.