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Amazon has its first $10 billion quarter

The company still fell short of Wall Street's expectations, but e-book sales are better than ever and now top paperback book sales.

There were some surprising tidbits in Amazon's quarterly earnings release today.

Sales topped $10 billion for the first time. In spite of the threat that Apple's iPad presents for its Kindle e-book reader, Amazon announced that its Kindle e-book sales now top paperback book sales; they were already more popular than hardcover books. However, the 36 percent increase in revenue, unfortunately, still fell short of Wall Street's high expectations for the steadily growing e-commerce company.

Sales reached $12.95 billion for 2010's holiday-heavy fourth quarter, up from $9.52 billion in the fourth quarter of the previous year. Amazon noted that this 36 percent increase would have been 37 percent had it not been for the $139 million shaved off it from unfavorable changes in foreign exchange rates. Operating income was $474 million, down slightly from $476 million in the fourth quarter of 2009.

Amazon had expected that Kindle book sales would surpass paperback book sales in the second quarter of 2011 (the count excludes free Kindle titles), so the milestone was reached earlier than expected. Also in last year's final quarter, it sold three times as many Kindle books as hardcover books.