Is this how reverse auctions work?

Shares of eBay (NASDAQ:EBAY) continue to tumble today, down to levels last seen in January of 2003.

The global auctioneer isn't taking hitting a five-year-low quietly. This morning alone, eBay is making several announcements.

  • It is trimming its workforce by 10%, eliminating 1,000 positions worldwide.
  • The company is forking over $945 million in cash and honoring outstanding options to acquire transaction enabler Bill Me Later.
  • eBay is buying Danish online classifieds site dba.dk and auto marketplace bilbasen.dk for roughly $390 million.

Binging on one end and purging on the other sends mixed signals, naturally. Is eBay trying to scale back its operations as the economy heads into financial uncertainty or is it going to be an opportunistic shopper? The answer, clearly, is that eBay wants to eat its cake and lay it off, too.

Can it use Bill Me Later to pay for the deal later?
Because eBay is the parent company of PayPal, Bill Me Later is the perfect sidekick to its leading online transactions site. The platform allows buyers to order merchandise and take as long as three months before ponying up the money.

Depending on how you view today's credit crisis, it's either a shopaholic's salvation or a recipe for disaster.

The one thing that everyone can agree on is that we're all seeing the company's "Bill Me Later" option at the end of the checkout process in more and more online retailers. It's not just about the e-tail juggernauts. Bill Me Later is offered by most of the dot-com heavies like Amazon.com (NASDAQ:AMZN) and Overstock.com (NASDAQ:OSTK). It is also available through some unusual players. JetBlue (NASDAQ:JBLU), for instance, lets travelers buy their tickets through Bill Me Later. Robotics specialist iRobot (NASDAQ:IRBT) lets the gadget-hungry snap up the company's vacuum-cleaning automatons through the delayed payment service.

In short, Bill Me Later is more than just an opportunity for eBay's PayPal to expand its reach; Bill Me Later was growing to the point of being a threat to PayPal as the payments platform of choice.

Something smells gotten in Denmark
The Danish sites make perfect sense. eBay has made no bones about its interest in growing overseas through acquisition. It has a minority stake in South America's MercadoLibre (NASDAQ:MELI). This summer it began to weigh the purchase of a piece of South Korea's leading Gmarket (NASDAQ:GMKT) marketplace. Those sites are more in sync with eBay's auction platform, but the company has also been making bets in online classifieds with its 25% chunk of Craigslist and expanding its own Kijiji site globally.

Classifieds, particularly free, ad-supported classifieds, would seem to be counterproductive to eBay's namesake site where patrons pay to get noticed. However, this is eBay rolling with the trends. If an online classifieds website is going to put eBay out of business, eBay would prefer it to be its own.

The vehicles site is also a good fit, given eBay's skin in the game with eBay Motors. Despite the auto market slowdown, it remains a large part of eBay's overall business as a result of the big-ticket items being sold through eBay.

The pink slip slips
The layoffs do make sense. Just because eBay is snapping up companies doesn't mean that it's happy with what it already owns. In fact, it's probably indicative that it's not content with its existing roster of properties.

Rumors of eBay looking to unload other purchases like Skype and StumbleUpon have been creeping up lately. As its priorities shuffle around, so should the company's human resource needs.

Layoffs aren't fun. They can be morale killers. However, streamlining its workforce is also something that a profitable, cash-rich company like eBay wouldn't even consider unless it was tactically necessary.

Let's see where this goes from here. Let's just hope that those being let go don't have to turn to Bill Me Later to get their severances paid.

More items in the eBay playbook: