Web retailers Amazon, eBay down on Cyber Monday

LOS ANGELES (Reuters) - Shares of eBay Inc (EBAY.O), Amazon.com Inc (AMZN.O) and other online retailers fell on "Cyber Monday," as analysts worried that deep discounts from traditional retailers may have stolen the thunder from their online-only rivals, known for lower pricing.

Shopping traffic online typically rises on the Monday after the U.S. Thanksgiving holiday, as consumers seek better bargains than they found in brick and mortar stores over the weekend.

But this year's Cyber Monday was expected to be somewhat muted, because worried retailers were already advertising deep discounts online and in stores even before the Thanksgiving weekend.

"One of the implications of the heavy discounting at physical retail is that bargain-hunters will not be as enticed to go to bargains on the 'net," said Soleil-Media Metrics analyst Laura Martin.

"If you're in the stores this year, you're not online. I think that would explain today's stock prices," she said.

Ebay shares were down 4.8 percent at $12.51, while Amazon's stock was off about 2.2 percent at $41.76.

Elsewhere on the Web, shares of discount diamond seller Blue Nile Inc (NILE.O) were down more than 9.9 percent and Overstock.com Inc's (OSTK.O) stock dropped 12.7 percent.

Forrester Research expects Web sales to increase about 12 percent for the holiday shopping season in November and December, their smallest rise ever according to the research group's measurements.

The online sales increase for the season is usually about 10 percentage points higher than the increase at traditional retailers because online sales start from a much smaller base, Forrester said.

Tracking firm comScore (SCOR.O) has predicted holiday sales online will be flat this year at about $29 billion, compared with 19 percent growth in 2007.

Analysts said a credit crunch that has credit-card companies raising rates and lowering available credit limits could also hit online retailers hard since they do not accept cash payments.

According to a Shop.org survey, 84.6 million consumers plan to shop online from home or at work on Monday, up from 72 million in 2007.

(Reporting by Lisa Baertlein, editing by Matthew Lewis)