Sector Snap: Major Web stocks decline

NEW YORK - Shares of major Internet stocks declined Friday along with the overall market, with Amazon.com Inc. and eBay Inc. sliding after a Cowen and Co. analyst lowered his 2008 earnings estimates for the companies.

In afternoon trading, online retailer Amazon's shares declined $2.63, or 3.1 percent, to $81.63, while online auctioneer eBay's stock dipped 56 cents to $29.80.

In a Friday client note, Cowen and Co. analyst Jim Friedland lowered his 2008 profit estimates for the e-commerce companies he covers, including eBay and Amazon.

The analyst said that although few signs point to a slowdown in e-commerce growth, he doesn't think the sector will remain immune if consumer demand keeps slowing.

Friedland noted that in the 2001 recession, Amazon's North America revenue grew just 3 percent.

"We believe that Amazon and eBay are most exposed to a slowdown, given their broad exposure to the economy," he wrote.

At the same time, shares of Internet conglomerate IAC/InterActiveCorp declined 42 cents to a new year low of $23.60.

Elsewhere in the sector, shares of online search engine operator Yahoo Inc. shed $1.04, or 4.3 percent, to $23.05.

In a Friday client note, Bernstein Research analyst Jeffrey Lindsay lowered his price target for the stock to $28 from $32, citing a deterioration of the company's main business.

The company's stock got a boost Thursday from a media report of another possible acquisition by Microsoft Corp., he said, but the analyst still thinks the market is placing a higher value on Yahoo's minority equity holdings and non-operating assets than to its core business.

Lindsay rates Yahoo shares "Market Perform."

Rival Google Inc.'s stock declined $9.56 to $637.17.

The Dow Jones industrial average declined more than 225 points in afternoon trading, and the tech-heavy Nasdaq composite index shed more than 36 points.

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