Jan 14 (Reuters) - Collins Stewart began coverage of e-commerce companies eBay Inc (EBAY.O: Quote, Profile, Research), with a "sell" rating, and Amazon.com Inc, (AMZN.O: Quote, Profile, Research) with a "buy" rating, and said Amazon has a higher quality exposure to e-commerce.
Though eBay offered a broader selection and lower prices in the past, Amazon's offerings have become more compelling in terms of selection, prices, shipping, trust and overall convenience over time, analyst Sandeep Aggarwal said in a note to clients.
The analyst said eBay's online advertising will come under tremendous pressure in 2009 and may not provide the kind of growth the company projects.
The online auctioneer's growth profile has come down materially and it is losing market share in its core market places business -- whose revitalization may take years -- said Aggarwal, who has a price target of $10 on eBay's stock.
The analyst said Amazon has one of the best user-interfaces among online retailers and will benefit from the world-wide growth in Internet usage and online advertising.
Aggarwal expects the online retailer's wireless reading device, Kindle, and its Amazon Web Services to contribute materially to revenue growth in three years' time. He has a price target of $65 on Amazon's stock.
Shares of eBay and Amazon were trading down 3 percent before the bell. They closed at $14.13 and $50.11, respectively, Tuesday on Nasdaq. (Reporting by Mihir Dalal in Bangalore; Editing by Amitha Rajan)
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UPDATE 1-Collins Stewart starts Ebay with sell, Amazon with buy | Markets | US Markets | Reuters 
