Tech stories & videos & tweets & pictures!

EBay is run by smart people who don’t use eBay and spend hours debating the data about how other people use eBay. That is the problem. You can’t solve your way into the future."- A former eBay strategist on the company’s fatal flaw

If IBM (IBM) and Apple (AAPL), with their bullish earnings, are the flame of hope around which battered investors are huddling today, then eBay is the sopping wet blanket tossed over that flame. The online auctioneer reported fourth-quarter earnings Wednesday afternoon and they are dismal to say the least.

Net income for the period fell 31 percent. Revenue fell more than six percent to $2.04 billion, its first year-over-year quarterly decline this decade.

An ugly showing, which eBay (EBAY) blamed on a softening consumer economy and "tough holiday season." But there’s another force at work here as well: skeptical eBay sellers irked by recent changes to the company’s auction fee structures. They’ve been abandoning eBay for rivals like Amazon (AMZN), Etsy, and Bonanzie, and the company has suffered from their departure. According to Nielsen, traffic to eBay.com was flat year over year, decreasing three percent from a three-month average monthly unique audience of 66.5 million in Q4 2007 to 64.7 million in Q4 2008. Worse,eBay’s gross merchandise volume-the total value of all goods sold over the site-fell 16 percent year over year. That’s concerning because by all rights GMV really should be growing. What do consumers do during financially uncertain times? They look for deals that will stretch their shrinking budgets. Apparently fewer and fewer of them are doing that on eBay these days, because higher fees and other changes the company’s made to its auctions have resulted in fewer bargains. As Digital Daily commenter Rolin Bach aptly noted earlier this week, "To be successful online, you have to offer something better than the department store down the street. This is why eBay is failing. WalMart has better prices. Buying on eBay is not a deal anymore. Not now, not tomorrow, not ever."