Commerce reported a 2.7 percent drop in retail sales in December, the sixth consecutive monthly decline. The report showed a 1.9 percent decline in sales at catalog and Internet retailers.

Pacific Crest analyst Steve Weinstein this morning said that Q4 e-commerce sales appear worse than expected. He estimates that sales were up one percent in October, then down more than three percent in November and more than four percent in December. He estimates total online sales in the quarter were down four percent, falling short of his previous forecast for flat growth.

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In a research note this morning, Pacific Crest analyst Steve Weinstein reports that Q2 online advertising is likely to grow in “the high teens” versus a year earlier, down from Q1 growth just under 20% and Q4 growth of 23%, “indicating a modest but steady deceleration.”

Weinstein says the weak economy has lead to a tightening of overall ad budgets. While that is driving some advertisers to spend a larger slice of their budget on the Web, taking share from television in particular, he finds that “online advertising would be growing faster in a more robust economy and ad market.”

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