Yahoo posts 86% rise in holiday shopping sales

NEW YORK: Holiday shopping sales on Yahoo Inc. shopping Web sites jumped 86

per cent this year, the Internet media company said on Wednesday, an early sign

of strength as online retailers tabulate their success.

Yahoo said its sales growth outpaced Forrester Research analysts' original

estimates of 10 per cent growth by more than eight-fold. Yahoo users spent $10.3

billion online in the fourth quarter, the company said, citing research group

ACNielsen.

Deep discounts on items from brand name retailers helped fuel the increase in

shopping activity at Yahoo, the No. 2 online retail destination, between Nov. 23

and Dec. 24, the company said. The growth figures helped lift shares of online

retailers in early trade on Wednesday. Shares of Amazon.com Inc. rose $1.15, or

12 per cent, to $10.98 on Nasdaq, while Yahoo stock jumped $1.33, or 8 per cent,

to $18.00.

"It's stronger than I expected," US Bancorp Piper Jaffray analyst

Safa Rashtchy said, referring to the sales growth. "I would just caution

that you've got to take a look at the whole quarter," he said. "As

narrowly as they've looked at it, it might not necessarily tell the whole

picture."

Unlike other online retailers, Yahoo does not run its own stores. Instead, it

hosts more than 10,000 online stores operated by third parties, and the company

keeps a fraction of the sales itself.

Like their brick-and-mortar counterparts, online vendors offered deep

discounts this year. The five most popular product categories on Yahoo this

season were video game consoles, digital cameras, laptop computers, toys and

apparel.

Analyst comments lift Amazon shares



Shares of Amazon, operator of the top e-commerce Web site, were among the top
gainers of the morning on Nasdaq, fueled in part by positive comments from US

Bancorp Piper Jaffray.

Based on an analysis of Amazon's holiday Web traffic and purchases, Piper

Jaffray's Safa Rashtchy wrote that lower overall prices were offset by a surge

in the number of products sold.

Even after a free shipping promotion ended at Amazon, the number of items

purchased each day were rising. "Daily units were still around 1 million a

day as late as December 18, well past the free shipping and the height of the

shopping season for online retailers," typically Dec. 14 or 15, Rashtchy

wrote.

(C) Reuters Limited.