Nov. 30 is the ceremonial kickoff to the online holiday shopping season this year. That's Cyber Monday.

The term was coined by Shop.org in 2005 after the retail group noticed a spike in online retail purchases on the Monday after Black Friday -- the day after Thanksgiving, long considered the holiday kickoff for brick-and-mortar retailers.

Cyber Monday isn't the busiest online shopping day of the year (Tuesday, Dec. 9, and Monday, Dec. 15, were the two biggest days last holiday season), but that hasn't stopped Internet retailers from putting a festive wrap around that day, with special promotions and some deep discounts.

But the uncertain economy is making it tough for market trackers, analysts, industry executives and economists to predict how online holiday sales will perform this year. With unemployment at a 26-year high of 10.2% and employers showing little willingness to hire, consumers have clipped spending.

U.S. e-commerce sales in the third quarter fell 2% to $29.6 billion compared with the same quarter in 2008. And sales fell 1% from the second quarter.

But the worst of the downtrend may be over, Gian Fulgoni, chairman of research firm ComScore, said in a conference call with reporters this month, when he talked about the state of the U.S. online retail economy.

"We're seeing clear signs that we've hit the bottom," Fulgoni said, though he added that there was "still no positive growth."

Companies that base their business on Internet e-commerce have spent the year cutting costs, improving their sites with better features for shopping and offering other perks designed to lure more buyers.

As of Friday, the Internet e-commerce group ranked No. 14 among IBD's 197 Industry Groups, up from No. 140 eight weeks ago.

1. Business

Internet e-commerce involves the buying and selling of goods and services online. It comes in three basic forms: business to business, business to consumer and consumer to consumer.

B2B is the largest category by far, but the two consumer-related sectors have grown rapidly in recent years as Internet access has become more widespread and more households have subscribed to high-speed broadband access.

Mobile commerce, fueled by growth in smart phones -- cell phones that provide access to the Internet -- has provided an emerging platform for transactions.

E-commerce companies sell all manner of goods and services online, from marbles to Mercedes. Consumers are served through retail Web sites that generally focus on selection, price and convenience.

Traditional retailers such as Wal-Mart (NYSE:WMT - News), Target (NYSE:TGT - News) and Barnes & Noble (NYSE:BKS - News) have quickly expanded their online operations.

But online-only seller Amazon.com (NasdaqGS:AMZN - News), with 2008 revenue of $19.2 billion, is the world's No. 1 online retailer. EBay (NasdaqGS:EBAY - News), with 2008 sales of $8.5 billion, leads the online auction field by a large margin. Argentina-based MercadoLibre (NasdaqGS:MELI - News) is the eBay equivalent in Latin America, having posted double- or triple-digit revenue growth for 17 straight quarters. Others in the e-commerce sector include niche businesses. For example, Shutterfly (NasdaqGS:SFLY - News) provides photo management and printing services.

Name Of The Game: Improve operating efficiencies in order to offer the lowest prices possible while offering consumers efficient search features, a wide selection of products and convenience.

2. Market

In 2008, U.S. online sales rose 6% to $130 billion, excluding travel, compared with a 2.8% increase for retail sales overall. In the five previous years, however, annual online sales had risen by an average of 25%, according to ComScore. For the first three quarters of this year, sales fell 1% to $91 billion, a further reflection of the global economic slowdown.

The trend may be turning. While year-over-year sales for each month from May to August fell, September was even, ComScore says, suggesting that things may have hit bottom. (October figures aren't available yet.)

"It's a positive sign," Fulgoni said.

It's also encouraging, he says, that e-commerce continues to attract more buyers. Fulgoni says about 20% more people now shop online than did a year ago. On the other hand, people are spending less.

In the third quarter, consumers spent about 18% less than in the year-ago period. Still, total sales fell only 2% because more people are shopping online.

"That's the good news, that more people are shopping online," Fulgoni said.

A report released this month by the Organization for Economic Cooperation and Development says the percentage of adults buying goods and services online globally rose to 35% in 2008 from 27% in 2004.

3. Climate

A survey of 1,200 consumers presented by eBillme.com determined that U.S. consumers on average expect to spend $281 online during the fourth quarter, up 24% from the third quarter but down 18% from fourth-quarter 2008. The survey was conducted by Javelin Strategy & Research.

It's the first time in a year that Javelin's quarterly poll showed a sequential increase in spending plans, which "shows some visible signs of improvement in the online retail sector," Javelin said.

Forrester Research expects U.S. online retail sales to reach $44.7 billion in November and December, up 8% from a year ago. Despite the lingering effects of the global financial crisis, the online space remains the retail industry's growth engine, says Forrester analyst Sucharita Mulpuru.

"While the rest of the retail world is slightly positive or negative, the online retail segment is growing much faster and taking share at the expense of others," Mulpuru said.

Consumer attitudes about online shopping and services have steadily improved over the years. Today, 61% say they can find products online that they can't find elsewhere, up from 55% in 2007, according to a Forrester survey in August of 4,723 online users. And 52% say they prefer to shop online because it's easier to compare products and features, up from 42% in 2007. Also, 94% of those who bought products and services online in the past three months plan to do so again this holiday season, Forrester says.

In a bid to pull in more shoppers, free shipping will abound this holiday season. According to a study of 70 online retailers by BIGresearch taken Sept. 14 to Oct. 6, 80% of online retailers will offer free shipping, though some of the free shipping will require a minimum purchase or be offered only for certain items.

4. Technology

E-commerce companies are constantly upgrading their technology to operate more efficiently and improve the shopping experience. Many are adding Web 2.0 technologies that enable greater interaction with customers.

According to BIGresearch, more than half of U.S. e-tailers say they have set up or improved Facebook and/or Twitter pages this year, while 66% have set up or enhanced blogs.

Mulpuru says the use of social networking services by Internet retailers is largely experimental at this time and has yet to show a return on investment, but she says it still has an upside.

"It's about listening to the customer and providing feedback, not always about making a sale in the near term," she said.

Ben Schachter, an analyst at Broadpoint 13Tech who recently took a look at job postings at Amazon and eBay, said in a research report that Amazon is investing heavily in digital initiatives such as the Kindle e-reader. Amazon is also focusing on video-on-demand and digital distribution of video games, music and software. And the company is "clearly continuing a long term strategy to build out its payment capabilities," Schachter wrote.

With eBay, he says it's clear the company is continuing to extend its PayPal payment platform into new markets, including social networks. EBay is also hiring to build up its capabilities on mobile platforms.

5. Outlook

Online retailers are compensating for the economy by making operational changes to protect profits, according to Shop.org. More than 40% have scaled back inventory. Forrester says retailers are also watching their inventory, hoping to avoid last year's unbridled discounting. According to ComScore's survey, half of U.S. consumers expect to spend less this holiday season.

"Retailers will need to reach into their marketing toolboxes this season to find ways to provide value to consumers and incentivize spending," Fulgoni said.

Upside: The number of people going online to shop keeps growing, and consumers have expressed strong satisfaction with convenience and pricing.

Risks: The economy. Also, large retailers like Wal-Mart and Target will continue to compete aggressively, which could fuel heavy discounts and price wars over the holiday season.