eBay sees profit and revenue drop

eBay is bracing itself for a tough 2009

Revenue and profit have fallen at auction website eBay as it struggles along with more traditional retailers to cope with the economic downturn.

Net profit for the final quarter of 2008 fell to $367m (�264m) from $532m for the same quarter the previous year.

The company said the recession and the strengthening dollar were the reasons for the fall in revenue.

"We've been operating in an almost unprecedented external environment," said eBay boss John Donahoe.

"There is no doubt that eBay was impacted by the macro economy and our fourth quarter results reflect this," he added.

Revenue fell to $2.04bn, below analysts' expectations. The figure would have been lower had it not been for strong performance of web-based telephone company Skype and web payments service PayPal.

The company also forecast revenue for the first quarter of 2009 to be between $1.8bn and $2.05bn.

Jeffrey Lindsay of Bernstein Research called this "a pessimistic guidance for 2009".

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