PayPal says it has suspended personal payments to and from India, as well as transfers to local banks in India, although it’s not clear from the company’s short blog post what the problem is or what’s being done to fix it. All it says is that the company is working with its ” business partners and other stakeholders to address questions they have about the service.” PayPal says that commercial payments can still be made to India but merchants in that country can’t withdraw funds in rupees to local Indian banks.

An unnamed analyst quoted by IDG News Service says that the changes may be related to new government rules in India that are intended to prevent or discourage money laundering. These rules, introduced last year, require financial intermediaries to verify the identity of clients carrying out international money transfers.

India has been taking steps to try and improve security as part of its anti-terrorism efforts, including banning the import of cell phones that don’t have an identity code and thus can’t be tracked. It’s possible that the Indian government is concerned about PayPal money transfers being used to fund terrorism, and is requiring the company to either verify who is making and receiving the payment or block the transfer.

According to one online forum discussing the topic, PayPal has been reversing payments since Feb. 1, sending users an email that states:

Dear SENDER, Your payment of $XX.XX has been returned to you. If you sent the payment with a bank account, the funds will be returned to your PayPal balance. If you paid with a credit card, the amount will be credited back to your card. We returned the payment to you because we have stopped allowing personal payments to be sent to or from India… If this payment was a personal payment, such as a gift to a friend or family member, then we request that you find another payment method until we restore personal payments to and from India. We are trying to resolve this issue as quickly as possible and we’re sorry for any inconvenience. Thank you, PayPal.

Another user said that he or she received an email from PayPal saying the company had suspended “specifically those funds transfers that do not have an underlying exchange of goods or services.” The email recommended that the seller contact the buyer and ask them to pay again, and specify that goods were the reason for payment. Other disgruntled and confused PayPal users are discussing the issue in forums here and here.

Post and thumbnail photos courtesy of Flickr user quaziefoto

Think web metrics and traffic stats aren’t a contentious topic? Think again. Entrepreneur Jason Calacanis has started a crusade (or at least what he seems to hope will become a crusade) against web measurement firm comScore, whose traffic numbers have been criticized by many as inaccurate, and in the process he has managed to draw fire from the normally even-tempered venture capitalist Fred Wilson of Union Square Ventures.

What raised Calacanis’s ire was an announcement by comScore that the company is changing its measurement methods to try and produce better numbers, but that anyone who wants to get updated statistics has to pay the company $10,000 a year. Those who don’t pay will still be measured in the old-fashioned way, and as a result will likely continue to have much lower numbers than they would with the new system (Peter Kafka does a good job of outlining the changes in a post at Media Memo).

In his email newsletter, Calacanis called for a boycott of comScore, and also advised investors not to buy the company’s stock:

“Comscore is the technology industry’s biggest bully, and today I’m calling for an industry-wide boycott of their services. I’m asking journalist and bloggers to stop covering their stats, I’m asking advertisers to not use their services, and finally, I’m asking startup companies to not support their new and widely reported on “$10,000 to get your stats correct” extortion ring.”

Calacanis went on to detail a battle with comScore that goes back almost five years, involving the stats for his former Weblogs Inc. group of blogs (now owned by AOL). And then he called out Fred Wilson specifically for his support of comScore’s $10,000 “shake down,” saying the Union Square VC is “outspoken and an advocate of startups –- except with comScore. He’s turned a blind eye while letting his huge venture return in comScore color his objectivity.”

Wilson, for his part, lashed out at Calacanis in the comments on the Mahalo founder’s Posterous blog, saying:

“Jason…you don’t know what you are talking about. comscore (SCOR) is a public company. you can go look at their financials. they aren’t exactly printing money. it’s hard to measure the internet and they spend well over $100mm per year doing just that. they aren’t ’shaking down’ anyone. their move to a hybrid model is a reaction to many of the criticisms that people have had of their panel model over the years. but it isn’t cheap to manage that data either. someone has to pay for this. or of course we could all just let Google do it for free. We know how that will play out.”

comScore’s chief marketing officer, Linda Abraham, also comments on Calacanis’s post, and takes issue with a number of his points about the service, including the company’s measurement methods (Abraham has also written a post for the comScore blog about the changes). She notes that comScore is actually more friendly to many web startups than Google, because it doesn’t do advertising.

“We make no apologies for charging for access to our reporting system. That is the only revenue source we have to cover our costs. In doing so, we make a ‘mafia like’ pre-tax margin of less than 9% . Google and Quantcast offer metrics for ‘free’ because they have an advertising supported model. They use the data they collect from users or publishers to sell targeted advertising. We chose not to have a business model based on selling advertising, because we do not want to compete with our clients who make a living selling advertising, and who need a neutral third party to provide audience data that is free from conflicts of interest.”

Calacanis’s crusade-mongering seems to have gained at least one supporter: Gil Penchina, a former eBay executive now at Wikia — the for-profit sister company of Wikipedia — offers a vote of support for the boycott in the comments on Calacanis’s blog, saying “We have been offered a 3 month trial – and I’m going to turn it down. I agree – we’ll be using quantcast going forward.”

Whether anyone else decides to join Calacanis’s anti-comScore bandwagon remains to be seen.

Post image and thumbnail image courtesy of Flickr user fPat

What happens when your turnaround takes an about-face? eBay CEO John Donahoe may find out the answer to that question if he isn’t careful. Although Donahoe has been implementing a lot of changes aimed at driving new business in the company’s core marketplace division, it’s looking like he needs to come up with some additional ways to bring consumers and sellers back to the site.

Next Wednesday, eBay is expected to report its financial results for the last three months of 2009, which includes the holiday season. The results aren’t likely to be as bad as a year ago — when Donahoe had to apologize to investors for a disappointing performance – but also aren’t likely to be as impressive as you’d expect when a turnaround is working. Analysts are looking for an incremental rise in both revenue and profit.

Perhaps eBay’s efforts to repair its business have been too focused on impressing investors. True, eBay’s stock is up 67 percent in the past year. But the company isn’t doing well with either consumers or buyers — who, unlike investors, actually contribute to its revenue. When Piper Jaffray asked consumers last month which site had the best shopping experience, only 13 percent said eBay, down from 27 percent in March 2009. Another 65 percent said Amazon was the best, up from a prior 36 percent.

Amazon is also appealing to eBay’s key customers, the PowerSellers. When JP Morgan surveyed them, 54 percent had a negative opinion of eBay, while 69 percent viewed Amazon positively. Even worse, PowerSellers sold 56 percent of their goods on eBay last year, down from 65 percent in 2008. In short, all that tinkering with eBay’s marketplace isn’t reversing the flow of buyers and sellers from eBay to Amazon.

So what’s it going to take to return an allure to eBay’s site? There aren’t a lot of appealing options. But it could start by reaching out to its most vocal critics. The comments section of many articles and blog posts concerning eBay (including some here) blossom with angry rants from disenchanted, often alienated eBay sellers.

eBay’s stance has long been to dismiss them as a vocal minority, which worked for a while. But the web is a mighty bullhorn amplifying the complaints of the disenchanted — whether you agree with their complaints or not. After a while it taints the brand in the eyes of others, as companies that have set up fire brigades to extinguish complaints on Twitter have learned all too well.

To win back more consumers, eBay can also go head-to-head with Amazon at its own game: heavy discounting. Part of the appeal of the auction-driven commerce that eBay has moved away from was that it held the promise of a bargain price. Now that eBay is pushing the fixed-price format, many consumers don’t see much of a difference between eBay and Amazon — except that Amazon has a stronger image as a trusted clearinghouse for low-priced goods.

Often, many sellers offer the same item on eBay with no difference in their buy-it-now prices. eBay could encourage deeper discounts by placing them higher in search results or in featured listings. The company could also renew its image as a low-cost e-tailer with commercials that are more focused and less baffling that its “IT” campaign.

Of course, going up against Amazon on discounts isn’t easy, as Wal-Mart well knows. And a discount strategy could disappoint the same investors that eBay has been working so hard to impress. But if the company continues to lose market share to Amazon, it will have a bigger problem than irate shareholders. It will have a failed turnaround.

In-post image courtesy of Wikimedia Commons

Google, in response to what it called “a highly sophisticated and targeted attack on our corporate infrastructure” aimed at penetrating the Gmail accounts of Chinese human rights activists, said today it will cease censoring results on Google.cn. The move will likely trigger Google to be blocked in China, and the company to shut down its offices there.

Gmail and Google search are not the same product, so the fact that Google has connected them signals a broader distrust of the Chinese government and the way it controls Internet access for those who have not figured out how to punch through the Great Firewall. A Google blog post authored by David Drummond, SVP of corporate development and the company’s chief legal officer, refers to “these attacks and the surveillance they have uncovered.”

Drummond said that at least 20 other companies were targeted in the attacks, and that the Chinese human rights activists’ accounts were being “routinely accessed” through phishing and malware. He doesn’t state whether Google knows who the attackers were.

To date, Google is the only foreign Internet company that has been able to build its own market share in China; by contrast, Yahoo, eBay and MySpace fell apart, and Facebook is blocked. To operate within China a company must get a license, store its servers there and comply with censors, something Google began doing in 2006. At the time, it justified the move by saying it was expanding access to information to more users.

As of December, Google had 17 percent search market share in China, compared to 77 percent for Baidu, according to the Chinese search company.

Drummond writes today that:

We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.

Google also took pains to say that it has already improved its security and that it believes the attacks had nothing to do with the safety of cloud computing. 

Image by Flickr user googlisti.

Mobile apps that take users directly to e-commerce and other types of web sites are a growing threat to traditional search engines, according to a research note from BroadPoint AmTech, released today. While the growth of mobile apps has been heralded as a healthy trend, is it good for the Googles of the world?

Search engines derive significant revenues from commerce-related queries, including ones as basic as searching for “Amazon” or “eBay,” according to the Broadpoint AmTech note. Add to the mix rapid growth in usage of mobile apps and that they’re treating search engines as the middle man to be removed, and search engines may be in trouble, says the report.

There are four primary ways that mobile apps are disrupting standard search models online and calling for change, according to the research note:

1. Bypassing Navigational Queries. “Savvy Internet users may find it hard to believe that people search for terms such as Amazon or CNN,” the report notes, “however, these navigational searches comprise a meaningful percentage of all searches and are often highly monetizable for Internet search engines.” The upshot is that mobile applications can completely bypass these types of queries, including mobile apps coming directly from e-commerce providers.

2. Disintermediation of Commercial Queries. “Product-related searches are traditionally among the most highly monetizable queries,” Broadpoint AmTech researchers note. They add that many emerging mobile apps exist solely for product queries, and ones that utilize technologies such as bar code reading can completely remove the search engine middle man from the product search process.

3. Placement on the Deck. “While virtually all smartphones provide open access to the Internet and high levels of customization for users, the importance for companies to secure prominent placement/default status on a phone’s mobile ‘deck’ remains important,” the report says. This phenomenon, of course, has gone on for years, and is part of why Google provides Mozilla nearly all of its annual revenues in exchange for a search box in the Firefox browser that feeds users directly into Google’s own search-and-ad ecosystem.

4. Convenience/Behavioral Risks. It’s becoming increasingly convenient for users to dive into mobile apps that either come from or are directly associated with large e-commerce sites, Broadpoint AmTech researchers note. “If users get in the habit of simply using the Amazon app to search for products or a Fandango app for movies, then Google would be seriously impacted,” the report concludes.

The Broadpoint AmTech research note makes a number of good points, but of all the large search engines, Google seems to be most aware of the possible threat that mobile applications represent to its traditional search business. In fact, the research note points out that Google’s own Nexus One phone could be an attempt to make “sure it can guide the development of the mobile web while protecting and expanding its own business model.” In other words, Google will want to put its own tools for directing users to its search ecosystem right on the desktop, and integrate it with the whole user experience.

Google already does that with Firefox, by buying search placement each year, to the tune of tens of millions of dollars. This is also why Google is interested in the spread of Android-based phones, many of which emphasize its tools and applications, and steer users into its search/ad ecosystem. Broadpoint AmTech makes a good point about how mobile apps can have a material impact on search engine revenues, but one has to wonder if Microsoft and Yahoo are paying anywhere near as much attention to the issue as Google.

This year brought tumultuous shifts in technology, with enormous success stories such as the rise of the open-source Android operating system, the end of Europe’s multi-year antitrust case against Microsoft regarding browsers, and surprising shifts in the hardware market, among other notable events. As the year and decade pull to a close, we’ve collected the top five winning and losing technologies and companies for each of the five major areas that our GigaOM Pro research service covers: infrastructure, mobile, consumer tech, real-time web, and green technology. After some grueling negotiations, we ended up with this list of the top 50 biggest winners and losers of 2009:

To find out more about why these companies and technologies were selected, check out the full writeup at GigaOM Pro (subscription required).

The ultra-competitive prepaid market is producing some astoundingly inexpensive all-you-can eat rate plans. And breaking your cell phone contract to take advantage of them may be cheaper than you think.

That was the message during today’s press call by Consumer Action, a nonprofit consumer-advocacy group that opposes what it calls “excessive” early termination fees (ETFs). The group — which is funded in part by TracFone, the prepaid service provider — offered the following suggestions for users (like Stacey) who are considering ditching their carrier in favor of cheaper offerings:

• Determine whether you are in the ETF “penalty box.” Users who’ve had the same phone and price plan for more than two years are probably unaffected by ETFs. Those who are subject to the penalties may have to pay only a prorated amount.
• Do the math. A $150 penalty may seem steep, but it’s quickly offset if you can cut your $90 monthly phone bill in half.
• Avoid re-upping with your carrier. Operators typically offer new phones or more attractive price plans to users nearing the end of their contracts in an effort to lock customers in for another two years.
• Watch for carriers looking to change the terms of the contract. Major changes in terms can allow consumers to kill service without paying an ETF — which is an option Kevin over at jkOnTheRun began considering with his Palm Pre last week.

ETFs have become a hot-button issue in Washington, too, as evidenced by the FCC’s current probe into Verizon Wireless’ policies. Verizon recently doubled its ETF for some high-end devices from $175 to $350, claiming the move was necessary to stop users from taking advantage of its buy-one, get-one-free promotion for BlackBerry handsets only to kill service and sell the phones on eBay. The FCC today granted Verizon’s request for additional time to respond to the inquiry, pushing back the deadline to Monday. But with the FCC stepping up its role as a consumer-friendly regulatory agency, ETFs are likely to continue to be a point of contention between network operators and the Beltway in the months ahead.

Image courtesy Flickr user seretuaccidente.

Executives from eBay and Craigslist testified in a Delaware court over the course of the week over the auction giant’s stake in the classifieds leader. If you didn’t fork over $400 to watch today’s live stream of the culture clash between the folksy Craigslist and pragmatic eBay, I’ve pieced together what you missed:

• According to Craigslist CEO Jim Buckmaster, Google had tried to buy early Craigslist employee Phillip Knowlton’s shares, but Craigslist became more interested in eBay because it would be satisfied with a minority stake, whereas Google wanted to buy the whole company. Buckmaster said he also discussed selling the shares to Yahoo, Salon.com, the venture arm of Bertlesmann, Warburg Pincus and Kleiner Perkins. (AuctionBytes)
• Craig Newmark testified that then-eBay CEO Meg Whitman assured him that eBay would not use the confidential information about Craigslist it had access to as a shareholder to compete with the site, however the contract the two companies signed in August 2004 for 28 percent of the company at a price of $32 million did allow eBay to compete, with the exception that it would lose shareholder rights if it offered online jobs postings in the U.S. (The Associated Press)
• In fact, eBay was at the time pursuing a classifieds business in 10 countries in Europe that fall and acquired a classifieds company, but current California gubernatorial candidate Whitman admitted she did not tell Buckmaster and Newmark of those plans. eBay said Craigslist’s board meetings were “amateurish,” while Newmark said eBay chose to be the goliath in the situation. (court video clip)
• Both Buckmaster and Newmark charged that Whitman was “not trustworthy.” When Buckmaster complained to Whitman after eBay launched competing classifieds site Kijiji, she replied that eBay did not want to part with its shares, and would in fact like to take over the whole company if possible. Buckmaster, who will continue testifying on Monday, described this as “a slamming of the door in the face.” (The AM Law Litigation Daily)
• Emails shown in court revealed that eBay anticipated that it would lose its board seat as a result of violating shareholder agreements by launching Kijiji. (The Register)

Testimony continues next week, and Craigslist has filed a countersuit alleging that eBay stole confidential information for the Kijiji launch — though Newmark admitted at the Delaware trial that he has never seen Kijiji.

Skype continued to expand its mobile footprint today with the release of a beta version of its offering for Symbian S60 3rd Edition phones, a move which could be a step toward Skype becoming the ubiquitous real-time communications platform CEO Josh Silverman envisions for the company. The release supports 17 different models and includes basic features such as free Skype-to-Skype calling, instant messaging, group conversations and the ability to call phones with Skype credits or via subscription.

The Luxembourg-based company — which has emerged from its spinout from eBay and its legal troubles with founders Niklas Zennstrom and Janus Friis settled — has been extending its mobile effort over the past year to support Windows Mobile devices, the iPhone and the Nokia N900. Skype Lite, a stripped-down version of the software, is available for a few dozen handsets. Skype said it will build on its Symbian support with the commercial launch of Skype for Symbian next year, giving it better access to the OS that — while slipping — remains the dominant smartphone platform worldwide.

Photo courtesy Ryan Fanshaw Photography via Flickr.

As new devices, app stores and rising mobile broadband usage continue to change the way consumers and businesses interact with the cellular infrastructure and even the Internet, power is shifting in the mobile market. On Friday, as part of the Mobile Broadband Breakfast series, I moderated a discussion among five panelists specializing in everything from network gear to applications who had gathered to talk about how that shift in power is affecting the industry.

The Seattle event, put together by Chetan Sharma of Chetan Sharma Consulting, solicited a wide range of insights from the panelists. However, in talking to folks afterward I was floored by the disconnect between the carriers’ perception of their value and the value that app makers and content companies ascribe to the carrier network.

Neville Ray, SVP of Engineering, T-Mobile USA

A perfect example is in the billing space, where carriers attach a lot of value to their billing relationship with their customers, a role that is quickly being disintermediated by billing platforms such as Apple’s iTunes, Google’s Checkout, PayPal or Amazon’s 1-Click. Another example includes the access to customers and marketing dollars that carriers once had a monopoly on. However, thanks to the rise of OS or device-specific applications stores such as Apple’s App Store and Google’s Android Marketplace, companies other than the carriers are providing platforms that can reach millions and may even influence which carrier a consumer chooses.

So amid some discussions on the technical challenge created by the capacity limits of the spectrum allotted for mobile broadband, and musings on how regulatory actions with regards to network neutrality, getting more spectrum and even openness in the wireless industry will affect players, I think the business model constraints provide the best fodder for debate as well as the most opportunity for new entrants to the market. Of course, any company that can address the underlying technical constraints by squeezing more bandwidth into a megahertz of spectrum is worth listening to at this point.

Updated: On the heels of data showing high online shopping volume on both Black Friday and Sunday, I’m wondering what’s left for so-called Cyber Monday when everyone returns to work and supposedly hops online for deals. On Friday I asked if Cyber Monday had been time-shifted, because so many people can now shop so comfortably at home via their broadband connections.

According to subsequent data, the answer appears to be “yes.” Traffic to retail sites hit a peak of 7.38 million visitors per minute late afternoon Eastern time on Sunday, according to Akamai, a few million above the Black Friday peak of of 6.69 million visitors per minute. Data today will show how the weekend and Black Friday stacked up against the Cyber Monday rush, but as of 10 a.m. ET it was hovering at just above 6 million visitors per minute. I’ll update later today, of course. Update: Cyber Monday held on with 7,909,317 visitors per minute to retail sites as measured by Akamai this afternoon around 3 pm ET.

While retailers can get people to hit the web by using Cyber Monday discounts provided online, I know I’ve already scored some sweet deals and am pretty much tapped out when it comes to gifts I can purchase online. I may not be the only one, according to a research note issued today by Colin Sebastian, VP and senior analyst of digital media and the Internet at Lazard Capital Markets:

While Cyber Monday may be the ceremonial kick-off to holiday spending, we note that some sales were likely pulled forward due to more aggressive Thanksgiving/Black Friday promotions by both pure-play and multi-channel sites.

Overall, Black Friday sales rose half a percent in brick-and-mortar stores, to $10.066 billion, according to ShopperTrak, which tracks retail sales, and were up 11 percent to $913 million online, according to comScore. That’s better than expected online, but no word on how deep discounting affected sales.  However, big winners appear to be eBay’s PayPal unit, which saw a 25 percent year-over-year increase in payment volume on Thanksgiving Day and a 20 percent rise on Black Friday. Mobile online payments through PayPal were 140 percent higher than an average Friday.

And Amazon seems to have taken the crown for most-visited web site on Black Friday, attracting 13.55 percent of online shoppers, according to Experian Hitwise data. However, the book seller also released data today showing that its Kindle e-Reader saw record sales in November as folks shopped for the holidays. The question for Amazon and other online retailers is: Will they continue to hit new highs or has the peak passed? Even if we’ve hit the peak, continued high traffic (and hopefully sales volume) may mean the peaks are ultimately less important, which will turn Black Friday and Cyber Monday into anachronisms online.

It’s becoming clear what eBay wants to find inside its corporate stocking this holiday season: affluent shoppers.

That’s why it’s opened up a brick-and-mortar retail shop on the corner of 57th Street and Fifth Avenue in Manhattan, next to luxury department store Bergdorf Goodman. The 5,000 square-foot pop-up store, which opened its doors a week ago and will close after Sunday, sells Michael Kors handbags, Jimmy Choo shoes as well as Apple iPhones and Palm Pres, and features computer kiosks with access to eBay’s site.

As Advertising Age has pointed out, these transient pop-up stores don’t often generate a profit. So why is eBay, under pressure to fatten its profit margins, bothering? Think of the outpost as a prong on the company’s latest marketing campaign –- a way to catch the attention of holiday shoppers, especially ones who can afford to spend money in the luxury stores along Fifth Avenue.

With less fanfare, eBay has also opened a luxury store of sorts on its own site. Dubbed Fashion Vault, the initiative pushes eBay into the growing retail niche of private online fashion sales. If you’re a fashion slob like me, you might not know that these are one-time, invitation-only online sales, lasting just 24-36 hours and offering top-drawer brands at deep discounts.

But the niche is growing fast. Saks recently opened up its FashionFix site, and other private-sale sites such as Gilt.com and RueLaLa.com have been thriving. (Last month, RueLaLa’s parent, Retail Convergence, was acquired by e-commerce company GSI Commerce  for $350 million.)

Luxury goods are one of the bright spots in e-commerce. Demand for them remains strong even as budgets remain tight. As MarketingVox noted:

Though luxury retailers have traditionally been slow to adapt to web-based sales and maketing tactics, a recent Bain & Co. report projects 20% growth in overall online sales of luxury goods in 2009. This compares with an 11% drop of overall global sales of high-end clothing.

eBay built Fashion Vault around sellers who have established relationships with brands like Hugo Boss and Cole Haan. It has the potential to strengthen some of eBay’s weaknesses that emerged during its long and painful restructuring of the marketplace site. eBay’s recent focus on refurbished and second-hand goods gave it a low-rent feel, and its move away from online auctions drained away a lot of the thrill that belonged to the site’s early days.

Analyst are encouraged by the move. Kaufman Brothers analyst Aaron Kessler said Fashion Vault improves eBay’s marketplace outlook by strengthening its fixed-sales model (while bringing back some of the suspense of the old auction frenzies), strengthening ties with high-quality sellers, boosting average selling prices and repeat traffic, and above all bringing in affluent customers – the ones who are still spending in this economy.

Will it work? It’s been a little more than a week since Fashion Vault launched. But if the number of people following eBay’s Fashion Vault account on Twitter is any indication (123 followers at this count), eBay needs to do a better job getting the word out.

It’s that time of year again. The holiday shopping season has shifted into full gear, and so have the economists, analysts and retailers who wring their hands over things like Black Friday sales figures. Or those of its fake, and widely mocked, online counterpart, Cyber Monday (which is far from the busiest shopping day on the web — online sales at Amazon, for example, typically peak in mid-December).

Overall, a modest improvement over last year’s dismal performance is expected. Forrester Research projects an 8 percent rise in holiday sales online, up from the 5 percent growth rate last year. comScore sees growth at 3 percent, all but erasing the 3 percent drop last year. But while online retailers are sure to see stronger sales than their offline rivals, the desperate discounts happening across the board threaten to erode any profits they may have once hoped for this season.

For my money, the best indicator is the average consumer shopping budget. Despite all the hot items for sale, we’re still feeling the pinch of the economic downturn, and as such, budgets are back in vogue. A Gallup poll showed consumers plan to spend an average $638 per household this season, up $22 from last year. But a survey by the National Retail Foundation said they will spend $683 dollars, or a decline of 3.2 percent, following on the heels of an 8 percent drop in spending last year.

Think about that. The NRF — the trade group pushing the annual Cyber Monday charade — expects consumers to spend even less than last year. And with respected analysts publicly predicting a double-dip recession, such caution on the part of consumers is more likely to grow in December than abate.

To that end, retailers are responding the way they did last holiday season — with ultra-steep discounts early on. The price war that Wal-Mart is waging against Amazon may stretch consumers’ dollars, but it’s hell on other retailers, who must either match discounts or risk losing customers. Already, 2009 is shaping up to be a repeat of 2008, when retailers desperately slashed prices to entice wary consumers.

That is undoubtedly worse news for brick-and-mortar stores than it is for online stores, where operating costs are lower. Many big retailers like Wal-Mart and Best Buy are responding by pushing deep discounts on their web sites, but in doing do, they risk cannibalizing sales from their offline stores, while the costs of running those stores remains the same. Which means that even if overall holiday sales figures do increase by a few percentage points, profits at many retailers may decline or be eliminated entirely.

The Black Friday deals tracked on Twitter aren’t just a stream of bargains, they also measure the desperation retailers are already feeling. Gap’s site was offering sweaters at 50 percent off. Betsey Johnson took 40 percent off everything in its online store. Even Apple is getting into the deep-discount spirit.

Discovery-oriented sites like Twitter are helping to spread news about bargains, further boosting the appeal of online shopping among consumers, as Colin noted earlier this week. In Apple’s iTunes store, the second best-selling paid app last week was RedLaser, which scans barcodes and offers instant price comparisons with online sites.

As with last year, there is likely to be one outstanding success story in this bleak retail environment: Amazon. In an environment where penny-pinching consumers are driving down retail profits, Amazon – the master at thriving on razor-thin profit margins – is thriving. Goldman Sachs and Piper Jaffray recently raised their revenue estimates for Amazon, citing a rise in unique users and overall traffic.

As long as the economy remains weak, the progression of the retail industry remains clear: All retailers must become more like Amazon – low prices, tiny margins – or suffer a slow death.

If you’re looking to save a little time this holiday season by shopping on the mobile web, you’d do well to spend some time on Amazon’s mobile site, according to figures released this week from Compuware’s Gomez division. The online retailer’s destination fared the best in a study of 14 mobile sites studied by the developer of web optimization software, placing first in both response time (averaging 2.85 seconds) and availability (99.86 percent). Mobile sites from QVC and Newegg also performed well, Gomez said, while sites from  Sears, Buy.com and Target each had an average response time of more than six seconds.

Those sites and plenty of others are likely to see a surge in traffic this holiday season. Deloitte found that 19 percent of U.S. consumers plan to use their phone as a shopping tool to find store locations, research prices and access discounts. One-fourth of those polled said they actually planned to make a purchase on their handsets. Of all the mobile sites and apps designed to help users spend their money starting on Black Friday, here are a few of the more notable ones:

• eBay this week released a free app that allows iPhone users to search millions of the site’s listings to find the best deal. Users search by keyword and are alerted when the products they’re looking for come up for auction.
• Toysrus.com has launched a new mobile site enabling users to browse merchandise and make purchases over the phone; the site is also available through the company’s applications for BlackBerry and iPhone users.
• Google has joined the mobile coupon space, allowing retailers to add discount offerings in Google’s Local Business Center. The coupons are presented as users search Google’s local listings from web-enabled phones.
• ShopSavvy, which comes courtesy of the developer Big in Japan, allows iPhone and Android users to scan barcodes to find the best prices for both online and local items. Amazon’s iPhone app also includes a multimedia feature, allowing users to snap a photo of a product and submit it to find the item in Amazon’s catalog.
• Even users with lower-tech phones can subscribe to Black Friday’s Twitter feeds, where discounts and lists to shopping guides are posted regularly.
• Frucall offers a multipronged solution, enabling users to comparison shop via text message, the mobile web or with a simple voice call. The Mountain View, Calif.-based startup also offers a social networking component, encouraging users to interact with each other via voice or text message.

There are, of course, countless other sites and services that will happily help separate you from your money this holiday season. And the next few weeks should serve as kind of barometer for mobile shopping offerings, providing yet another glimpse of just how much consumers are using their phones to do more than just talk and text. If retailers and developers truly see a substantial surge in usage — and if their offerings are up to the task — it may bode well for the mobile data market as the economy recovers.

eBay is doing good business by getting back to its core of helping people find more efficient ways to buy and sell things. And the company has seen better-than-expected success on the iPhone, with 5 million downloads and $500 million in mobile sales (including sales from mobile browsers too) expected by the end of the year. Today eBay is introducing a second free iPhone app, eBay Deals, which scrapes the site’s listings for those with less than four hours left, no bids, no reserve and shipping included. Both iPhone apps now include PayPal integration.

That still pales in comparison to eBay’s total sales; the site had $45.6 billion in gross marketplace merchandise volume in the last four quarters combined. It does make us wonder about revenue from Amazon’s iPhone app, which includes one-click payments and the nifty feature of matching the site’s products to pictures you upload from your phone.

Meanwhile, eBay CEO John Donahue reiterated to Fox Business this morning that he expects PayPal to be a larger business than eBay someday — and of course mobile payments will help drive that growth.

Skype, with its spinout from eBay complete and its legal troubles with founders Niklas Zennstrom and Janus Friis settled, is looking to the future, where it wants to become a ubiquitous real-time communications platform. And that means thinking about the next-generation Skype architecture and hiring a lot of smart people, CEO Josh Silverman said in a conversation earlier today. “We are looking to hire engineers,” he said. “Especially those who want to live in Estonia.” In addition, the company is planning to ramp up its Stockholm (Sweden) office. “We are going to be ramping our presence in the Bay Area as well,” Silverman said. Skype currently has 700 employees and wants to hire engineers and product managers to help it expand as it seeks to transform itself from just a voice-based service to a multi-feature real-time communications platform.

“While Europe is going to remain our base, California is going to be a big presence for us,” Silverman said. Skype recently added SIP Guru Jonathan Rosenberg as its chief technology strategist, and he is based in the San Francisco Bay Area. The company had built up a substantial team in the Bay Area over the past few months as it was trying to build a route around the JoltID technology. With that need gone, the company now has enough engineering talent to start transforming itself into a platform.

“We want Skype to be embedded in more and more devices, and we want to offer our APIs for developers to embed into their applications,” Silverman said. That is going to be a tough sell considering the company’s history of throwing its developers under the bus, the most recent example being the Skype Extras disaster. Silverman was candid enough to admit that the Skype Extras program wasn’t working. “APIs were hard and the extras-software uptake was low, and it is important for us to have a great platform that is built for success,” he said. “So starting off a bad platform wasn’t a good idea.”

When I pressed Silverman on the embedded ambitions, he outlined a future where Skype would be embedded in connected game consoles, televisions and video phones. Skype could be embedded into different software offerings as well. The company wants to be a big player in the enterprise, but knows that it can’t do it all by itself. “We need to open up our platform in order to expand it,” he said, “Our aspiration is ubiquity.”

Silverman declined to offer any specific dates (and details) on when Skype will launch a platform for others to leverage. One thing is for sure, Skype can pose a serious challenge to some of the upstarts such as Ribbit, TringMe and Twilio that are all trying to make it easy for application developers to embed voice-related functionality into their offerings. Skype’s ubiquity — over 500 million subscribers — makes it a fearsome agent of change in the Internet-based communications arena. (Related post: “How Skype Can Quickly and Easily Become a Social Network (and Clean Facebook’s Clock))

Toward the end of our conversation, I asked Silverman about the next generation of Skype architecture, and he said the company was working on it. “It will work with SIP; it will have P2P, but we won’t come to it with a religion,” he said. And that includes offering Skype via a browser and making it even more savvy about video conferencing.

Photo of Josh Silverman courtesy of Phil Wolf via Flickr. Skype desktop photo courtesy of IPVEO.