An Internet analyst for Jeffrey Lindsay, a major Wall Street firm,  published a report today entitled U.S. Internet: The End of the Beginning,  stating that Google and Amazon.com will be long-term winners, while Yahoo and IAC InterActiveCorp fall by the wayside and eBay  will become a merger target.

Sanford C. Bernstein the author of the 310-page report says that Google and Amazon are best placed to withstand the current economic downturn.

“We expect two players to continue to perform strongly, Google and Amazon,” Lindsay writes. “Both Google and Amazon.com are still racking up annual growth rates in the 30-40 per cent range, with only a relatively modest slowdown in sight.”

Lindsay reiterates his previous positions that Yahoo eventually will be sold to Microsoft Corp. and that Barry Diller’s IAC e-commerce conglomerate will go ahead in August with its five-way split-up, as planned.

“Arguably the weakest players have strayed furthest from their original competences and have been operating largely as conglomerates,” the Bernstein analyst says of Yahoo and IAC.

In the short-run, however, Lindsay believes Yahoo will see gains if it reaches a deal to turn over some part of its search advertising sales to Google to run or if Microsoft resumes acquisition negotiations.

He argues that eBay “could potentially attract a Microsoft-like suitor in the future,” especially if growth in its core auctions business fails to resume and because eBay could spin off its PayPal or Skype units to make a deal work.

He also notes that Amazon and eBay are likely to be forced eventually to pay state sales taxes.