UPDATE 3-EBay warns of weaker 2008 results amid CEO change

(Recasts, adds background and pricing changes, analyst quote)

By Eric Auchard

SAN FRANCISCO, Jan 23 (Reuters) - EBay Inc (EBAY.O) warned that 2008 results would fall below Wall Street expectations, sending its shares more than 5 percent, even as it confirmed long-serving Chief Executive Meg Whitman would step aside.

The warning accompanied solid fourth-quarter results, and analysts said it was unclear if the company feared an economic slowdown or whether management was giving itself room to make changes to revitalize the business. Growth in the main auction business has slowed during most of the past three years.

Auctions chief John Donahoe will take over from Whitman at the end of March. He told a conference call with investors that eBay would cut sellers' fees, which would reduce revenue temporarily, but stimulate long-term growth. Overall growth in e-commerce will slow in 2008, executives cautioned.

"We are going to make breaks from the past," Donahoe told investors on a conference call to discuss recent results.

The share fall erased most of the day's gain. EBay shares closed up 6.7 percent at $28.94 in regular Nasdaq trading on news the CEO change was imminent, but before the results. After the report, the stock fell 5.6 percent to $27.58 in extended trading. The price has fallen by half from a peak in late 2004.

"Problems that were weighing on eBay continue to weigh on eBay," said analyst Jim Friedland of brokerage Cowen & Co.

"There are much more options to sellers on the market ... many of which are cheaper to sellers," the analyst said of online retail alternatives such as Amazon.com Inc (AMZN.O) or independent sites that rely on ads to drive traffic to them.

For the current quarter ending in March, eBay said it expected revenue of $2.00 billion to $2.05 billion -- well below Wall Street's average forecast of $2.14 billion, according to Reuters Estimates. First-quarter analyst forecasts had varied between $2.10 billion and $2.21 billion.

"Consumers are clearly being more conservative," Whitman said in a joint interview with Donahoe on cable television channel CNBC. "I anticipate we will see an increase in casual sellers who are supplementing their income."

The San Jose, California-based company expected 2008 revenue of $8.50 billion to $8.75 billion, which at its midpoint represents growth of 12 percent -- far below the $9.02 billion, or 18 percent, growth analysts had expected on average.

"We intend to be in a stronger position coming out of '08 than we were coming in," Donahoe told investors on a conference call to discuss the quarterly results.

The dour outlook came as eBay posted a 53 percent surge in fourth-quarter net profit, comfortably ahead of forecasts.

Net income jumped to $531 million, or 39 cents per diluted share, from the year-earlier quarter's $346.5 million, or 25 cents per diluted share. Excluding one-time items, the latest quarter's profit was $611 million, or 45 cents a share.

Analysts had expected 33 cents per share, on average, according to Reuters Estimates, but excluding one-time items and stock-based compensation, the average was 41 cents.