Standard and Poors Research Analysts Look For Certain Categories To Out Perform In On Line Sales Growth

• On 12:31 pm EDT, Thursday October 22, 2009

67 WALL STREET, New York - October 22, 2009 - The Wall Street Transcript has just published its Online And Direct To Consumer Retailing Report offering a timely review of the sector to serious investors and industry executives. This 38 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Online Retailer Profit Margins Vs. Bricks-And-Mortar Retailers - Uptick In Internet Commerce - Secular Shift In Market Share To Internet Retailers - Post-Crunch Consumer Confidence - Growing Market Share For Online Travel Agents - Possible Consolidation Of HSN, Inc. - Amazon As The "Wal-Mart Of The Internet" - Online Marketing Vs. In-Store Marketing - Maximized Markdowns - Online Traffic Conversion Rates - Social Networking To Drive Brand Awareness - Online Sales Holiday Outlook - E-Commerce As A Path To International Expansion

Companies include: Abercrombie & Fitch (ANF); Amazon (AMZN); Ann Taylor (ANN); Apple (AAPL); Ask.com (IACI); Bebe (BEBE); Best Buy (BBY); Bidz.com BIDZ); Dell (DELL); Dick's Sporting Goods (DKS); Expedia (EXPE); GSI Commerce (GSIC); GameStop (GME); Gap (GPS); General Motors (GM); Google (GOOG); HSN (HSNI): Hot Topic (HOTT); Interactive Corp. (IAC); Liberty Media Interactive (LINTA); LivePerson (LPSN); MercadoLibre (MELI); Move Inc. (MOVE); Orbitz (OWW); Pacific Sunwear (PSUN); Quiksilver (ZQK); Ralph Lauren (RL); ShopNBC/ValueVision (VVTV); South Korea's Gmarket (EBGMy); Sport Supply Group (RBI); Staples (SPLS); Starbucks (SBUX); Target (TGT); Timberland (TBL); Urban Outfitters (URBN); VeriSign (VRSN); Wal-Mart (WMT); WebMD (WBMD); eBay (EBAY); hhgregg (HGG); priceline.com (PCLN).

In the following brief excerpt from just one of the in depth interviews in the 38 page report, expert e-commerce research analysts discuss the outlook for the sector and for investors.

SCOTT KESSLER is a Senior Director with Standard & Poor's, heading up information technology sector equity research efforts and covering individual stocks. Since 2000 he has personally covered Internet software and services, and Internet retail companies, including bellwethers eBay, Google and Yahoo. Mr. Kessler received the S&P Analyst of the Year award in 2006 and a Gold SPARC award for innovation in 2007. He graduated from Brandeis University in 1992 and received a law degree from Washington University in St. Louis in 1995.

MICHAEL SOUERS joined Standard & Poor's U.S. Equity Research in 2004, where he is currently an industry Analyst in the consumer discretionary retail group. He primarily covers home improvement retailers, home furnishings retailers, consumer electronics retailers and other specialty retail companies. Prior to joining S&P, he worked as an investment analyst intern at Teacher Retirement System of Texas, where he covered basic materials stocks. He previously worked as an Associate in the Private Wealth Management Group at Bank One. Mr. Souers received a B.S. in finance at Trinity University and an MBA in finance from the McCombs School of Business at The University of Texas at Austin.

TWST: Which product categories are doing the best in online retail right now? And which of the companies that you follow are best positioned to take advantage of any growth that we might see?

Mr. Kessler: Mike is the person responsible for the Internet retail sub-industry within the consumer discretionary sector, so I'll let him talk about the big picture. I cover eBay (EBAY), and would note that categories the company has highlighted relatively recently include business and industrial, clothing, shoes and accessories, and electronics. For somewhat obvious reasons, eBay Motors has experienced some notable challenges.

TWST: So Michael what are your thoughts on that?

Mr. Souers: I think one of the categories that is showing the most growth and probably has the most potential for future growth is electronics. I think people are getting more and more comfortable buying electronics online. For instance, Amazon's (AMZN) electronics and other general merchandise category grew to 39% of sales in 2008, up significantly from previous years. Another category that's growing rapidly is apparel. It's fairly easy to return items purchased online, which makes buying apparel increasingly attractive. I think a problem that's precluded apparel from growing even faster is that sizes often vary based on brand or manufacturer. However, given the ease of returning items, I think this concern is abating. Multimedia products such as books, CDs and DVDs are obviously growing as well, but media has always been a product category that conforms well to online purchases. Therefore, growth is slower in this category than in most others due to past advances.

Mr. Kessler: I wanted to mention online travel. This category has shown some nice growth, especially outside the U.S., in Europe especially. I think a lot of this is attributable to two factors. One is that most people would say that Europe is a couple of years behind the U.S. in terms of adoption of the Internet in general and for travel transactions. Two is the increasing growth of the footprints of companies like Expedia (EXPE)and priceline.com (PCLN). In addition, consumers have been trying to find appealing values given the so-called "Great Recession". I remember that during the largely challenging 2000 to 2003 period - and I covered the online travel area back then - one could argue that some of the worst-performing areas in terms of both financial performance and stock performance stocks were the Internet category, as well as the travel area. Interestingly, however, I could argue easily that the Internet travel area did actually quite well. And one of the reasons for that, one of the reasons why I think these companies have done pretty well over the last number of months, say year-to-date for example, is because it seems to me that a lot of the vendors - the airlines, the hoteliers, the car rental companies, the cruise operators - they are looking for these companies to increasingly distribute and sell their products, and take on the related risk. It appears that this phenomenon has manifested itself like it did at the beginning of this decade.

Note: Opinions and recommendations are as of 10/07/09.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 38 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

For Information on subscribing to The Wall Street Transcript, please call 800/246-7673

Buzz up!