EBay has disappointed Wall Street profit forecasts for the first time in three years, prompting a 17 per cent plunge in its shares and depressing stocks in other internet companies.

Net profits at the online auction house for the last three months of 2004 were, at $205.4 million, 44 per cent higher than a year before. The figure, equivalent to 30 cents a share, rose to 33 cents once one-off charges were omitted.

However, the figure missed the 34 cents a share forecast by analysts, raising fears for the company's growth prospects.

"Investors are used to eBay beating [Wall] Street, not just by a little but by a lot," Stephen Leeb, the president of Leeb Capital Management, said.

The figures sent eBay shares down $18.18 to $84.87 in early New York trade. Yesterday, the stock lost 3.1 per cent.

Shares in other dot.coms also fell as eBay's results crushed sector optimism fostered by Yahoo's upbeat results on Tuesday. Google lost 2 per cent with Amazon shedding 4.4 per cent.

EBay noted a slow start to the Christmas shopping season in America and Germany and a greater-than-expected hit from the weak dollar.

Analysts also fretted over eBay's rising marketing and advertising costs, and expressed some disappointment at the company's forecasts.

The dot.com forecast revenues of between $1.01 and $1.03 billion for the first three months of 2005, with earnings, excluding one-off charges, reaching between 34 and 35 cents a share. Wall Street had hoped for a 40 cent a share forecast.

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