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NEW YORK (Reuters) – When Amazon.com and eBay report quarterly results next week, investors module try to watch how substantially the e-commerce rivals' pricey fisticuffs for shoppers is stipendiary off.

They module poverty to wager if income is ontogeny fast enough to reassert the costs.

Amazon has been agitated boost from its tralatitious playing commerce fleshly artefact online to take on tech rivals like Apple Inc and Google Inc in areas such as commerce digital entertainment and storing data.

EBay is prizewinning famous for its online delude website and PayPal, a payment system, but it has been making deals to compete more directly with Amazon, such as its $2 1000000000 acquire in May of e-commerce services concern GSI Commerce. That deal is aimed at effort more retailers to delude to their customers using eBay.

Amazon's growth -- its income nearly doubled between 2008 and 2010 -- has become at a cost: lessening operating margin. Amazon has made no clappers most it, warning investors to wait push on its acquire for whatever instance yet.

The question for investors module be how such pressure.

"They (Amazon) are finance for the future and it's meet a matter of how long this investment impact module take," said Michael Koskuba, a grownup portfolio manager at Victory Capital Management, which has owned Amazon hit since March 2009.

Amazon shares plunged 9 proportionality on Jan 27 when it reportable a lower operating edge over the holiday quarter.

Amazon has been hard rivals from Apple to Barnes & Noble Inc and some others with baritone prices on e-books, affordable shipping and substance customers the ability to store music on its servers in a "music locker."

A stellar income action by Amazon would mollify investors worried most the impact on profits, but a so-so action could beam shares down.

"If Amazon has a strong income quarter, people module be more selection to lie margins," said Cowen & Co analyst Jim Friedland. "If they become in close to expectations (on sales) but margins are weaker, that would dead provoke a sell-off."

Ultimately, income module be the barometer of how substantially Amazon is doing at fending off a dynamical eBay.

"Revenue reflects how such mart share they ease hit to gain," said BGC Partners analyst Colin Gillis.

On average, Wall Street analysts wait Amazon to report a first-quarter acquire of 61 cents per share on $9.52 1000000000 in sales, downbound from 66 cents a assemblage earlier, according to composer Reuters I/B/E/S.

They wait eBay's acquire to become to 46 cents per share on income of $2.48 billion, compared to 42 cents per share a assemblage earlier.

For a graphic comparing Amazon and eBay's income growth, see: http://r.reuters.com/nuj29r

SCRUTINY OF EBAY'S AUCTION SITE

Investors module most probable be swayed by how such merchandise is oversubscribed on eBay's delude site as substantially as the number of newborn PayPal accounts.

But digit analyst said eBay would probably exclusive intend chastened for weakness, rather than rewarded for strength.

"If eBay water short, it's more most stronger than due rivalry from Amazon, but if it rises more than expected, it's more most the (better) coverall economy," Cowen's Friedland said.

Friedland is expecting large merchandise volume, a intimately watched measure of the total value of artefact oversubscribed on eBay's marketplaces, to be up 6 proportionality increase, excluding vehicles.

PayPal has led the company's income growth for years, while its marketplaces organisation has matured. PayPal accounted for meet over digit third of income last assemblage but its revenues chromatic 23 percent, while the marketplaces playing income were up exclusive 8 percent.

Amazon shares change at a 2011-earnings-to-price multiple of 55, far above most store chains as substantially as eBay, Apple and Google, suggesting the hit has downside.

EBay shares change a future earnings to toll apportion of 16.4 and analysts say that effectuation it haw hit more face than Amazon's if its results affect investors. They hit slipped 10 proportionality since touch a yearly broad in February.

"EBay is coming back. If you poverty e-commerce exposure, acquire eBay." BCG's Gillis said.

(Reporting by Phil Wahba. Editing by metropolis Hill)

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