Profits at Amazon.com have tumbled as the world’s biggest online shopping company spent heavily on new technology and invested in its new toy business.

Net income in the three months to 30th June fell 58% to $22m (£12m) from $52 (£30m) a year before. Sales rose 22% in the quarter to $2.14bn but the shares have been marked down sharply.

“I do question the company’s decision to focus on its discount shipping programme, Amazon Prime, at a time when it is facing intense competition,” said City analyst Colin Perry.

“Unfortunately, Amazon just doesn’t seem to be generating sales in the way I hoped,” he concluded.