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Online businesses are providing some bright spots amid the


that has enveloped the retail sector in recent weeks.

Despite weakening consumer confidence and a dismal economic outlook, Internet sales over Thanksgiving were up slightly compared with last year, according to retail analyst firm comScore. Boosted by a slew of

special offers

from anxious retailers, Web sales on Thanksgiving Day and Black Friday increased 2% from the same period last year.

Although online sales those two days slowed significantly from the growth seen in 2007, when they were up more than 20% from the prior year, the figures will offer some comfort to online retailers and other Internet firms.

With Cyber Monday, the traditional start to the online holiday shopping period now underway, companies such as

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and search giant


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will be praying that this relatively solid start to the season continues through the coming weeks.

The initial signs are certainly good, explained Youssef Squali, an analyst at Jefferies & Co.

"Mildly positive year-over-year e-commerce growth data from comScore and eBay over the weekend indicate that the 'sky is not falling,'" he wrote in a note released Monday. "If sustained through year-end, this trend would be positive for Google, Amazon and eBay, among others."

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Youssef also highlighted information from online payment specialist PayPal, now part of eBay, which suggests that online retail remains resilient in the face of the economic slowdown. PayPal handled 34% more Black Friday transactions than in 2007, and also saw a 26% increase in payment volumes, a clear sign that consumers were rushing to buy heavily discounted products.

Despite the apparently positive online shopping figures, though, shares in Amazon, eBay and Google were down Monday as the Nasdaq slipped 5.5%. Internet giant Google was the worst hit, and saw its stock dive $22.63, or 7.7%, to $270.33.

Shares of eBay dipped 63 cents, or 4.8% to $12.50, while Amazon's stock fell $1.02, or 2.4%, to $41.68.

Analysts feel that online retail specialist Amazon is nonetheless well positioned to exploit the current economic malaise.


Amazon's online-only model provides meaningful competitive advantage," said Heath Terry, an analyst at Friedman Billings Ramsey, in a research note. "The company is able to centralize operations and rely on a more efficient distribution network without the investment in physical stores."

Terry reinitiated coverage of Amazon with a market perform rating and a $45 price target.

Confronted with an increasingly uncertain economic climate, more consumers are clearly choosing the Internet for comparison shopping and actual purchases.

A recent survey of 766 consumers by JPMorgan, for example, revealed that overall holiday spending could be down in the high single-digits to low double-digits in 2008, whereas online spending will be flat year-over-year. Among U.S. online retailers, Amazon is the clear leader, according to the firm, which found that nearly 50% of respondents plan to use the Seattle-based company.

Amazon's reach is 39% higher than its nearest competitor, eBay, explained JPMorgan analyst Imran Khan. "Amazon continues to pull in very high percentages of users earning more than $100,000, with 59% of shoppers saying they had shopped there," he wrote.

Online retailers such as Amazon and eBay could, however, face stiff competition from the Internet-based versions of traditional brick-and-mortar businesses over the coming months. JPMorgan's survey found that the number of shoppers planning to use


grew by a double-digit percentage from last year.

also enjoyed a "statistically significant" year-over-year increase, according to Khan.