Its losses were due in part due to charge of $169m related to its stake in the Living Social deals website and weak demand from European markets due to the ongoing economic crisis in several nations.
The loss was set against profits of $63m in the same period last year underlining the scale of the decline, although overall sales were up from $13.81bn in the third quarter, compared with $10.88bn in the same period in 2011.
The firm has likely also taken a financial hit by selling its raft of Kindle tablets for no profit, instead hoping to recoup earnings on media content downloads.
Chief executive Jeff Bezos was upbeat that the strong demand for its tablet devices proved this would work, though.
"Our approach is to work hard to charge less. Sell devices near break-even and you can pack a lot of sophisticated hardware into a very low price point," he said.
"And our approach is working - the $199 Kindle Fire HD is the number one bestselling product across Amazon worldwide. Incredibly, this is true even as measured by unit sales. The next two bestselling products worldwide are our Kindle Paperwhite and our $69 Kindle."
While the firm now faces a challenge from Apple's iPad Mini in the smaller tablet market, Amazon used its earnings release to point out what it believes are several advantages of its Kindle HD tablets to Apple's device.
For the Kindle Fire HD 8.9in, set to launch on 20 November, this includes more pixels on the screen, improved audio and the ability to watch HD content, as well as costing 30 less, Amazon said.
While for the Kindle Fire HD 7in device, which has been available for order in the UK since Thursday, Amazon touted its improved pixel display and the fact its costs $130 less than Apple's device.
The direct comparison from Amazon of the two products underlines the scale of competition in the tablet space, as Google continues to push its Nexus 7 tablet and Microsoft enters the game with its Windows 8-based Surface tablet.
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