Attention holiday shoppers: online merchants are planning to make it really worth your while to buy stuff from their websites this holiday season. That may not be such great news for investors, though.

As the Wall Street Journal notes, the offers will include free shipping, online-only discounts and gift wrapping, a skill I have never mastered. The news isn't that these offers are available, but that more of them are coming. Even with the worries about overall holiday spending, online holiday spending is expected to rise 21% this year to $33 billion, the paper said, citing data from Forrester Research.

Though this is great news for consumers, it underscores how worried retailers are about the holiday season, which most pundits expect to be lackluster overall. High gas prices also may keep consumers away from shopping malls.

That's good news for the likes of Amazon.com (NASDAQ: AMZN), which is offering Black Friday deals for the first time, and eBay (NASDAQ: EBAY), which is offering free shipping on some goods. Bricks-and-mortar merchants are already getting the message.

Wal-Mart (NYSE: WMT), which had been in Wall Street's dog house for quite a while, is well-aware of these trends. The world's largest retailer surprised Wall Street when it said that its decision to start discounting two weeks earlier than usual paid off. The company's quarterly profit rose more than analysts' forecasts, and it boosted its full-year outlook. Though shares have jumped the most in five years, they are still down for the year.

Further crimping the profits of online merchants is the rising popularity of comparison shopping sites such as Shopzilla. For instance, I found prices for the Nintendo Wii console ranging from $329 to $650, so it pays to comparison shop. That's great for consumers but bad for merchants because it ratchets up price competition.

eBay Inc. (NASDAQ: EBAY) today reported its biggest increase in profit in five quarters, providing that reports of its death are greatly exaggerated.

Net income was $377.2 million, or 28 cents, compared with $248.3 million, or 17 cents, the San Jose, Calif.-based company said. Revenue rose 27% to $1.77 billion. Excluding one-time costs, profit would have been 33 cents, beating analysts' expectations of 30 cents. Shares rose in after-hours trading since the company gave guidance for the quarter and year that basically confirmed to Wall Street's views.

"This first quarter of 2007 was a very strong one for the company," said CEO Meg Whitman in the earnings press release. "The strength of our core businesses, as well as the significant traction we're beginning to see across our newer businesses, helped us deliver great results across the board."

Whitman can be forgiven for gloating, For the past two years, she's been blamed for bringing eBay to the brink of ahiliation at the hands of Google Inc. (NASDAQ: GOOG). These results underscore that her detractors were wrong and that her strategy, with the exception of the Skype acquisition, is proving correct.

Though some merchants complained loudly. eBay last year raised fees on fixed-priced items in order to make it easier for users to find the items they want to buy. The strategy paid off for investors who as Bloomberg News notes have seen eBay shares soar 28 percent since the increases took effect.

As I noted in my recent post, eBay remains an easy and inexpensive way for many people to buy and sell goods on the Internet. Though its growth rates have slowed, it still remains a formidable brand.