E-commerce flagship Lastminute.com has slipped back into loss, as technology and product costs ate away at its finances.

Lastminute made a pre-tax loss, before one-off costs, of �3.84m for the October to December period.

The online retailer recorded a �300,000 profit for the three months before, a figure seen as a sign of the growing maturity of dot.com survivors.

But the firm said its return the red reflected product and technology investments, and outsourcing deals, "anticipated to contribute to the delivery of cost savings later this financial year".

The October to December period also, historically, sees lower trade for Lastminute, which depends for a large section of its revenue on travel bookings.

Analysts at broker Cazenove said the e-tailer was trading in line with expectations.

The figures came as online travel agent Ebookers announced strong trading in January, and hours after US online travel site Expedia unveiled profits up more than four times.

Technology boost

The value of deals handled by Lastminute hit �87.1m over the quarter, almost triple the figure of a year before.

The number of registered subscribers to the Lastminute newsletter edged 6% higher to 6.83 million, compared with the quarter before.

The firm also touted the "strong sales performance" of a technology, trialled in the UK since November, which allows flight and hotel to be reserved on a single booking.

The product will be expanded later this year through the Lastminute empire, which includes operations in eight European countries and through four international tie-ups.

Chairman Allan Leighton predicted the firm would continue to improve its profitability despite jitters over a potential war with Iraq, and economic uncertainty in Europe.

"Our business model allows us to anticipate 2003 being another year of sustained and improving performance," Mr Leighton said.

His comments were reflected in a trading report by Ebookers, which claimed that January trading "remained strong... despite the uncertain world political environment".

Ebookers stock closed 11.5p higher at 316.5p on Thursday, while Lastminute shares, one of London's top performers last year, ended 4.75p lower at 92p.

Founder steps down

Earlier, Expedia also forecast fast growth for 2003, on top of rise in profits to $21m for the October to December period.

The profits, which compared with earnings of $5m a year before, were well ahead of Wall Street forecasts.

The firm also announced that founder Richard Barton would step down as chief executive next month, to be replaced by Erik Blachford, who currently heads Expedia North America.

Mr Barton, 35, a former Microsoft executive, plans to live in Europe with his family for a year, but will remain on Expedia's board.