eBay Exploring Other Areas of Growth

Updated from 2:58 p.m. EDT

SAN FRANCISCO - At a time when eBay's(EBAY Quote) signature auction-style format may be losing favor, the company is increasingly setting its sights on alternatives.

eBay reported its third-quarter earnings on Wednesday, exceeding earnings estimates but falling short of revenue expectations on Wall Street.

But what really agitated investors was the online auction giant's disappointing outlook for the fourth quarter, which Chief Executive John Donahoe admitted would be a difficult one. eBay expects a 4% decline in revenue during the busiest shopping season of the year.

"These are turbulent times for which no one has the perfect playbook," he said during Wednesday's conference call with analysts. "There is a high degree of economic uncertainty and turmoil in the financial markets and this is impacting consumer spending and e-commerce growth rates, and we are seeing an impact across all of our platforms."

Shares of eBay closed down 2.35% to $14.97 Thursday.

In what could be an indication of the company's shifting priorities, Donahoe spent the first half of the conference call talking about everything besides eBay's online marketplace, which represents about half of its total revenue.

PayPal, for instance, now accounts for 28% of eBay's revenue, and Donahoe pointed out that for the first time ever, the payment volume off the site using PayPal has exceeded the payment volume on it.

Citigroup analyst Mark Mahaney called PayPal a great growth asset for eBay, noting in his research that its "29% transactions payments revenue growth in Q3 -- at the beginning of a severe recession and with a weakening eBay platform -- is an impressive growth rate."