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Online Shopping Returns To Normal-Almost

Sales bounce back to near pre-attack levels, but analysts lower growth forecasts
Online retailers saw sales drop in the weeks following terrorist attacks in New York and Washington, and analysts expect lingering uncertainty to slow further growth.

ChartE-retail sales fell to 85% of normal sales volume the week after the attacks, and still weren't up to previous levels last week, comparison shopping site BizRate .com says. Goldman Sachs revised its 2001 E-commerce forecast to 25% growth from 35% to 40%, and lowered revenue estimates last week for Amazon.com, CNET Networks, Homestore.com, 1-800-Flowers.com, and Yahoo, stating that the terrorist attacks weakened consumer confidence. Goldman Sachs expects Amazon's revenue to slip from $3.16 billion this year to $3.05 billion.

One exception is eBay Inc., which reaffirmed its third-quarter estimates for a record net revenue of $185 million. However, the auction site says sales will slow because of the attacks and has launched a program that lets lets sellers donate proceeds to charity.

The National Retail Federation revised its fourth-quarter sales growth forecasts, which include online revenue, from 4% to 2.2%, "in light of the continuing psychological and economic impact of recent terrorist attacks." Still, Cathy Hotka, VP of IT for the group, says she doesn't expect that impact will keep people away from the mall and in front of their PCs. "The fun part of shopping is to be there," she says. "It's retail therapy to listen to the music, to spritz on some cologne. People won't want to give that up."