Shares of major Web companies dropped sharply Monday amid a massive market sell-off that sent the Dow skidding below 10,000 for the first time in four years.
Shares of Google Inc., the leading Web search and advertising provider, plunged $17.84, or 4.6 percent, to $369.07 in late afternoon trading.
Yahoo Inc., its closest competitor, saw its stock fall 99 cents, or 6.2 percent, to $15.01.
Analysts fear that Web ad sales, particularly graphic-rich "display" ads, could take a hit if economic turmoil depresses consumer spending; New York-based research group eMarketer Inc. has cut its Web ad spending forecast twice so far for 2008.
Shares of Web movie rental company Netflix Inc. plummeted $3.31, or 11.4 percent, to $25.66 after the company trimmed guidance for fourth-quarter sales and total subscriber numbers. The Los Gatos, Calif.-based company blamed the economic climate.
Web auctioneer eBay Inc.'s stock also sank after the company announced its largest round of layoffs to date. Shares of San Jose, Calif.-based eBay dropped $1.63, or 8.6 percent, to $17.31.
EBay said it will cut about 1,600 jobs, or 10 percent of its work force, as it fights fierce competition from Amazon.com Inc. and other players in online commerce.
The company also announced acquisitions of an online payment company and two Danish classifieds sites.
Standard & Poor's Equity Research analyst Scott Kessler cut his rating on the stock to "Buy" from "Strong Buy," writing, "We think these deals make strategic sense over the long term, but we question the timing, valuations and consideration."
The Dow Jones industrials plunged by as many as 800 points Monday afternoon, setting a new record for a one-day point drop, as investors despaired that the credit crisis would take a heavy toll around the world.
