Online retail sales on Cyber Monday are set to reach a new record, with rivals Amazon.com Inc and Walmart.com set to be the prime beneficiaries, according to industry experts.

Shares of Amazon soared to an all-time high on Monday on optimism over the company's holiday performance and a statement by Amazon reporting record November sales for its Kindle electronic book reader.

The Web retail leader has been challenged by Wal-Mart Stores Inc's smaller online unit on offering the lowest prices on selected books, toys, electronics and other goods this holiday season.

From a growth perspective Walmart could potentially be the winner, but from a dollars perspective we still think Amazon will trump it, said Jefferies analyst Youssef Squali, who estimates that Amazon will report about 30 percent sales growth in its holiday fourth quarter.

Walmart does not break out sales for Walmart.com, but Squali estimates it to be a $2 billion to $3 billion business.

While Web sales represent a fraction of overall U.S. holiday sales, they are gaining strength as consumers intent on bargains rely more on sites to track and compare deals.

Cyber Monday, a term coined in 2005 by Shop.org, the online division of the National Retail Federation, refers to Web promotions offered by retailers beginning on the Monday after Thanksgiving.

Web tracking firm comScore said about $900 million could be spent online on Monday, when retailers offer steep discounts and free shipping on their sites. That follows an 11 percent surge in online sales to $595 million on Black Friday, the traditional start to holiday sales in stores.

ComScore will report Cyber Monday data on Wednesday. Total sales over the holiday weekend from Thanksgiving Day on Thursday through Sunday rose 0.5 percent to $41.2 billion, according to the National Retail Federation.

Walmart.com began touting on Monday CyberWeek specials, such as a 32-inch Sony Bravia television for $398 and the newest model Apple iPod Nano for $145.

Amazon offered a Samsung 22-inch flat screen television for just under $250, a discount of 48 percent, and the newest iPod Nano model at $134.99.

EBAY MAY BE CHEAPER

The rivalry between Amazon and Walmart.com is part of an overall migration from the offline world to online, where more consumers have become comfortable making purchases.

Ultimately, considering that e-commerce accounts for 8 percent at best of all commerce, there is still a long road ahead of them to gain marketshare from the 800 pound gorilla -- which is offline, said Squali.

Squali pointed to eBay, which he predicts still can increase sales on a percentage basis in the low teens year over year. Shares of eBay closed up 5.4 percent at $24.47, fueled by strong results from its online payments unit PayPal over the holiday weekend.

EBay, which is advertising 12 Days of Deals on its main site, is still cheap compared with other Internet rivals whose valuations are richer, Squali said.

EBay has a forward-looking price-to-earnings ratio of 14, versus 52 at Amazon, 22 at Google Inc and 14 at Wal-Mart.

Shares of Amazon rose 3.2 percent to close at $135.91 on the Nasdaq, while shares of Wal-Mart closed on the New York Stock Exchange down 8 cents at $54.55.

GLOVES OFF AT WALMART.COM

Richard Hastings, a consumer strategist with Global Hunter Securities, said Amazon has the ultimate edge for its array of third-party sellers and brands that use the Amazon.com site to display their wares.

Walmart.com, while it is excellent and massive in scale, still doesn't have the multitude of third-party unaffiliated brands, Hastings said. It still doesn't approach what Amazon is bringing to the show.

Squali gave a nod to the recent accomplishments of Walmart.com, a 10-year-old business that for years lived in the shadows of Walmart stores without effectively competing.

It looks like in the past six months they've started to give freer range to the online managers to do whatever it takes to go after Amazon, and that's why you're seeing them gain some ground, he said.

Shop.org predicted that some 96.5 million shoppers would shop online on Monday, up 13.5 percent from 85 million last year. The day is characterized by promotions advertised online, through email and social networks like Twitter and Facebook.

(Reporting by Alexandria Sage; Editing by Michele Gershberg and Matthew Lewis)

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