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EcommerceBytes-NewsFlash, Number 2225 - February 17, 2010 - ISSN 1539-5065    3 of 5

Citigroup Notes Growth Amazon, eBay Growth Rates Diverging

By Ina Steiner
February 17, 2010

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Mark Mahaney of Citigroup Global Markets said total U.S. online retail spending in the fourth quarter of 2009 increased 14.4% year-over-year, citing U.S. Department of Commerce figures. The analyst expects online retail sales in the U.S. to grow approximately 14% year-over-year in 2010 to approximately $153 billion. He compared growth rates at eBay.com (ex-vehicles) and Amazon North America to total online retail growth for the past two years, showing a narrowing spread between Amazon and total online retail growth, and a widening gap between eBay and total online retail growth.

Citigroup said Amazon.com faces continued margin pressures and "very significant" competition. eBay also faces a highly competitive landscape, and Mr. Mahaney said he is looking at eBay's execution; share buyback activity; and performance in eBay's core marketplace segment. "Factors that could cause downside to our estimates and price target include: 1) Greater than expected market share losses, 2) Mis-execution in the core PayPal segment, and 3) Worse than expected macroeconomic conditions."

The full report is available on the Citigroup website

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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