ebay are extemly unpopular, and have been going downhill since their fee increase, and bias towards buyers,

so you cant gauge how they are doing realative to the economy. people just do not like ebay anymore, they used to be good, but now they have stopped listening in favor of profits and the sound of
cha ching

YES! :-) I closed my account last year when they forced PayPal on us. If you still have not figured out what is wrong with PayPal, see www.nopaypal.com

Blaming this shortfall on the economic slump is ludicrous and anyone with three brain cells can see through this thinly veiled excuse. Now is the time, more than any, when people would be looking to get things cheaper. This is when people would be turning to Ebay first before even looking in retail/online shops in the hopes of saving a few bucks. Ebay should be making even more money now. Ebay got greedy and now they are getting what they deserve. The only thing that will save them is a grand gesture (i.e. lesser/dropping of fees) to try and win people back. Watch Q1 revenue. It will make this drop look like a step down a stairway as compared with a fall off a cliff in Q1.

As mentioned, Ebay pissed off many sellers by trying too hard to squeeze profits. Short term: Profits go up. Long term: Brand image tarnished and selling/shopping habits change causing profits to go down. The short term fix would of course be to squeeze the lemons (sellers) more, which would be a mistake. The long term fix would be to increase volume. To do that, remove posting fees, make Paypal fee-free if paid through Ebay (heck, they're double-dipping us) and have real people assist in disputes. Also, put the feedback system back the way it was.

Ebay got too greedy. They took a perfectly good auction business and biased it more towards plain old fixed price selling. The fees are higher, and now you have to use Paypal, which guess what, has more fees. And at the same time offering no real improvements in the ancient user interface or pages.

~10% in fees + shipping costs makes eBay pretty hard to swallow for people who used to feed eBay with true auction product.

I am just a casual users and hate all of these changes I've seen in the past couple years.

I can only imagine how terrible they must have been for career eBayer's.

Craigslist is great for local transactions and selling the odd stuff, but on eBay there were many businesses that were selling nationally and even globally that have left.
I found out that recently the eBay stuff sold by these companies went up in price. Even as a buyer, now I first check iOffer.com and other websites, and only if I cannot find what I want there I go to eBay.

With this I understand why they could be loosing profit, because why pay someone when you can put it up on craigslist for free.

Yes we are in tough economic times. However ebay should be doing a lot better when you have droves of people looking for bargains. Ebay pissed of its customers (sellers) and thats the last thing you want to do when going into tough economic times. I would say that this is the perfect time for google to come up with a good auction website. google base / google check out is not cutting it.