• Wall Street Journal, Monday, October 1, 2007 12:45 PM

Amazon.com and eBay have enjoyed a solid year on Wall Street, thanks in part to a change in the way financial analysts and investors assess their performance, says The Wall Street Journal. Both are members of the Internet's Old Guard; as such, their growth is slower than other companies, prompting analysts to weigh metrics like operating margins and revenue per user more heavily.

In fact, eBay and Amazon would have posted relatively weak second-quarter earnings by traditional Web standards. It's hard to expand an already-massive audience, but keeping hold of existing ones--and sucking more time out of them--is impressive for an established company. They have also moved into new business, such as digital music for Amazon and voice over Internet protocol for eBay. Emphasizing the new metrics and the growth in new business has made the online retailers look stronger--especially in comparison to slower-growing offline competitors.

"As growth slows [at eBay and Amazon], you're going to look at more and more retail-type metrics around these names because their fortunes are going to be tied to the consumer," eBay and Amazon investor Rafael Tamargo, a portfolio manager at Wilmington Trust Investment Management LLC, told the Journal. For the year, eBay's stock is up 31 percent, while Amazon's has more than doubled.

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