Despite posting a 35% sales increase for the fourth quarter and earnings that were better than expected (if still down compared to a year ago), last week was a tough one for Amazon. Analysts and investors were disappointed in the quarterly report, and the stock price for the nation’s largest online retailer fell almost 8% the day after the earnings report was released on Tuesday, though it bounced back a bit on Thursday. Analysts have long worried that Amazon was investing too heavily in its business, but that hasn’t stopped Amazon from keeping up those investments or its stock price rising (it has a 52-week high of $246.71). The most recent report, though, renewed concerns among some analysts that Amazon was not getting a high enough return on its investments.

The figure that caught analysts’ attention the most was the 8% increase recorded in Amazon’s North America media segment. While a solid increase for most companies, the 8% gain was below the 16% recorded for the full year. Four analysts asked about the figure during last week’s conference call and none seemed satisfied with Amazon CFO Tom Szkutak’s answers about the slowing growth rate, which he attributed primarily to a decline in video-game and video-console sales and an increase in third party unit sales for which Amazon receives only a commission.

One of the analysts who asked about the “deceleration” of the fourth-quarter growth of the media segment was Jordan Rohan of Stifel Nicolas. The day before the earnings release, Rohan upped his estimate for Amazon’s 2012 revenue based in part on his assumption that increased sales of the money-losing Kindle would result in higher sales of e-books and other media used on the various Kindle devices. A slowing growth rate in Amazon’s biggest media market, however, caught analysts by surprise and raised the possibility that Amazon’s strategy may not play out as anticipated. Rohan asked if perhaps consumer buying patterns had shifted from content purchases to hardware purchases, but Szkutak repeated that blame for the slowing growth was video games and consoles and that sales of digital content, including e-books, were very strong in the quarter. Indeed, sales of content were strong overall, with sales of print books rising by double digits in the quarter, something that surprised even Amazon. “Physical books’ unit growth was double digit in Q4 year-over-year, which we were very pleased with, if you think about the shift to digital content and just the really rapid growth on the Kindle side,” Szkutak said.

Amazon’s earnings announcement was made almost simultaneously with the news that Barnes & Noble will not carry Amazon Publishing titles, including those released and distributed by Houghton Mifflin Harcourt under the New Harvest imprint. The deal with HMH was aimed at broadening Amazon Publishing’s reach, as Jeff Belle, v-p of Amazon Publishing, told PW in December “beyond the Amazon platform.”

In its statement about not carrying Amazon titles, B&N castigated its archrival for its “continued push for exclusivity with publishers, agents, and the authors they represent. These exclusives have prohibited us from offering certain e-books to our customers. Their actions have undermined the industry as a whole and have prevented millions of customers from having access to content.” The nation’s only other major bookstore chain, Books-A-Million, said on Friday it too will not carry Amazon Publishing titles. Whether those decisions will hamper Amazon’s efforts to sign authors is unclear. The company has not been able to offer widespread distribution to authors it has signed to date, and although no major fiction author has signed with the company, a few bestselling nonfiction authors have signed with Amazon including Tim Ferriss and Deepak Chopra.

Amazon by the Numbers

$48.0 billion: Total sales, 2011
41: Percentage increase in 2011 sales over 2010
$631 million: Net income, 2011
45: Percentage decline in net income compared to 2010
164 million: Number of active customer accounts worldwide
8: Percentage increase in North America media segment sales, fourth quarter
16: Percentage increase in North America media segment sales, full year
15: Percentage increase in total media segment sales, fourth quarter
19: Percentage increase in total media segment sales, full year
48: Percentage increase in total electronic and general merchandise segment sales, fourth quarter
56: Percentage increase in electronic and general merchandise segment sales, full year
36: Percentage of total units generated by third party sellers, fourth quarter
69: Number of fulfillment centers