Sector Snap: Major Internet stocks mostly decline
NEW YORK—Shares of major Internet companies traded mostly lower Friday, with eBay Inc. dipping after an analyst said that a recent survey indicates the online auctioneer's conversion rates, or listings that result in sales, are down again.
EBay shares declined $1.18, or 3.7 percent, to $30.75 in afternoon trading.
In a client note, RBC Capital Markets analyst Stephen Ju said that in his most recent survey the amount of items sold through eBay "remained relatively steady" while listings continued to rise.
Ju said that while the decline in conversion rates may sound alarming, what really counts is the number of items sold.
"To think about this in retailing terms, eBay is increasing the square footage of its floor space but also charging lower rent as it strikes deals with larger sellers (like Buy.com) to give shoppers an increased selection," he said.
Ju maintained a "Sector Perform" on eBay with a $40 price target.
Elsewhere, shares of Amazon.com Inc. fell 46 cents to $75.66.
Stifel Nicolaus analyst Scott Devitt reiterated his "Buy" rating and $99 price target for the online retailer in a note to investors. The analyst thinks that over time the company's Fulfillment by Amazon service, where it ships items for other retailers, could "become a strategic thorn in eBay's side."
Meanwhile, shares of IAC/InterActiveCorp were unchanged at $23.71 after the Internet conglomerate's Ask.com unit said it purchased Dictionary.com and other reference Web sites by acquiring Lexico Publishing Group LLC.
Answers Corp., which runs the reference site Answers.com, previously agreed to buy Lexico. But in February, Answers said it no longer planned on purchasing the company due to poor market conditions.
Elsewhere in the sector, shares of search site operator Google Inc. fell $1.30 to $579.70, while shares of rival Yahoo Inc. were unchanged at $27.75.
Yahoo said on Friday that it will work with three of WPP Group PLC's divisions -- GroupM, 24/7 Real Media and WPP Digital -- on digital advertising.
