• Business Week, Tuesday, September 18, 2007 10:45 AM

Amid mounting competition from direct retailers like Amazon and flagging interest in online auctions, eBay has lost some of "the magic" that has made it one of the Web's biggest and most important companies. As one seller says, the days of easily selling out one's inventory are over. Investors, too, have noted as much in eBay's earnings, which have been consistently flat in the auctions department; almost all of its growth these days comes from PayPal, the company's online payment service.

The company is making an overhaul of eBay.com that attempts to make it easier for shoppers to find, purchase and discover items to buy. The search for items will now return a wall of thumbnail images which users can scroll over to make bigger. The idea is to recreate the feel of "window-shopping." Items will also be searchable by a new set of criteria, such as item color, brand, and sizes.

Social media services are also part of the relaunch. The auctioneer is creating groups called "Neighborhoods" that bring together users who have similar interests. It's also likely that eBay will integrate technology from StumbleUpon that recommends items based on individual and friends' shopping data. Sellers will also be able to tag their items to encourage lead generation from search.

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