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, 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 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.
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