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Ebay isn't experiencing the usual holiday glee this season.  The Wall Street Jouranal reports that traffic for November & December dropped 16% compared to 2007.  Transaction revenue has also slipped 28% to $1.44 billion and some users are reporting up to a 4% drop in sales versus last year.

Analysts are predicting that Ebay could post its first ever decline in revenue since its inception at the end of this quarter.

Customers seem to be responding poorly to changes implemented by new CEO John Donahoe earlier this year. The changes are a move away from the auction model that distinguished the site initially. There are now more fixed-price items sold on Ebay and selling fees have gone up.

This, in addition to their changes to the affiliate program, which moved from Commission Junction to a mostly in-house system, have seriously damaged revenue.  While the affiliate program used to be quite profitable for many, it now seems almost ridiulous, with lead shaving being heightened to new levels and a 'quality score' being implemented, which put a halt to $25 payments for new customer sign-ups in favor of a 'quality score' model (yippee!  $1 per lead!).

Ebay could be in serious trouble if this ship doesn't right itself...and soon.

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