eBay Wants to Make Waves

While those figures seem impressive, they actually highlight how eBay's business growth is slowing. For example, gross-merchandise volume rose 32% during last year's second quarter, but that slowed to an 18% boost in the first quarter of this year. Figures for listings and active users also show a slowdown.

eBay is at a crossroads. For most of its history, it was able to rely on growth from the ever-increasing number of new Internet users. But competition for each online shopping dollar continues to intensify. In addition, smaller specialized sites in areas including ticket sales continue to nibble at the company's businesses.

eBay is responding to the changing environment. Last year, the company acquired Internet telephone service Skype for $2.6 billion. Investors are still questioning whether eBay overpaid for the unprofitable company, which eBay says now is an integral part of its strategy.

In May, eBay and Yahoo! said they'd formed an alliance to promote each other's services. Critical for eBay is Yahoo!'s promise to promote PayPal, which accounts for about 25% of its revenue.

eBay unveiled eBay Express, a site that only sells fixed-priced goods, a month earlier. So far, the site hasn't been a huge success, says Jordan Rohan, an analyst with RBC Capital Markets, who has an underperform rating.

"According to some checks, eBay Express is responsible for fewer sales than eBay Poland," he says in an interview. "Go try and find something on eBay. It's difficult."