The online auctioneer reported revenue of $2.23 billion, up six percent from a year ago, while net income fell 29 percent to $350 million or 27 cents per share. Excluding some items, earnings were 38 cents a share. Analysts who follow eBay expected the company to turn in a gain of 37 cents per share on sales of $2.14 billion.

Gross merchandise volume–the value of all goods sold via eBay–rose seven percent from the same period last year. Analysts had believed it would drop between five and 10 percent.

EBay said it sees fourth-quarter earnings of 38 cents to 40 cents a share, on revenue of $2.2 billion to $2.3 billion.

“Our third quarter results were strong, with PayPal gaining momentum and market share worldwide and our core eBay business showing positive trends,” John J. Donahoe, eBay’s chief executive, said in a statement.

NOTES FROM THE EARNINGS CALL

On business overall:
eBay CEO John Donahoe: “These are strong results for a strong company….We’re seeing our turnaround efforts begin to pay off.”

On the economy:
Donahoe: “The economy as we see it is stable, and we’re cautiously optimistic about consumer spending going into the holiday.”

On the Skype lawsuit:
eBay CFO Bob Swan: “We’re highly confident in our position.”

Affected employees were notified this morning, and executives are meeting with remaining staff this afternoon to do damage control.

Slowing consumer and business spending due to the econalypse is the obvious explanation for today’s cuts, though Rhapsody’s struggle to compete with other music services, among them Apple’s (AAPL) iTunes, clearly played a role here as well.

RealNetworks last implemented layoffs in December 2008 when it cut 7.5 percent of its workforce.

UPDATE: A Real spokesperson has confirmed the cuts, noting that the company is “placing greater emphasis on mobile devices and Web platforms and less on editorial and heavy client software.”

Tim Quirk, VP of music programming for Rhapsody, has taken to Twitter to try to drum up some job leads for the folks he just had to let go.

Both devices are said to feature a touchscreen and slide-out keyboard and a “social communications” focus. Which sounds somewhat compelling, though it would probably be more so if the market weren’t already enamored with Palm’s (PALM) Pre, Apple’s (AAPL) iPhone 3GS and its $99 brethren, the iPhone 3G. That said, I suppose there’s always a chance that Motorola (MOT), using Android, could turn out a handset that apes those devices and returns the company to the glory days of the RAZR or at least points it in the right direction.

Certainly, Motorola desperately needs something like that. A weak product portfolio has already reduced its share of the handset market to 6.5 percent, about half what it held a year ago. And with the econalypse in full swing and consumer spending declining, Motorola’s prospects in the mobile handset don’t appear very promising.

Also: Debtor is suffering under mounting legal costs as it is steadily beaten into submission by Apple (AAPL) and its notoriously vicious legal team.

Pystar’s bankruptcy declaration will delay Apple’s copyright-infringement suit against it, but only temporarily. In the meantime, the company will be allowed to continue to do business and perhaps, strengthen its defense. But on June 5, the date of its bankruptcy hearing, things could get nasty. Psystar will almost certainly be forced to reveal its financial backers, and if they are the nefarious Svengalis that Apple claims, there may be hell to pay.

Though Wii manufacturer Nintendo posted a 21 percent gain in quarterly operating profit on brisk demand for the videogame console, it slashed its forecast for full-year sales of the device (it slashed its full-year profit forecasts as well–by 33 percent). Nintendo had expected to sell 27.5 million units during its fiscal year, which runs from April until March. Now it expects to sell only 26.5 million. “Wii sales in Japan during the year-end shopping season didn’t meet our forecast,” Nintendo President and CEO Satoru Iwata said during an earnings briefing. “Still, I don’t think demand for the Wii has run out.”

No, of course not. But clearly the Wii isn’t as recession-proof as was once thought. And, despite its appeal to budget-conscious consumers, Nintendo doesn’t feel it’s immune to the general slowdown in consumer spending. Said KBC Financial Products analyst Hiroshi Kamide: “Today’s revision suggests that the roaring pace of Wii growth that we’ve seen until now may be over.”

Those remarks promptly shaved 5.46 percent off of Google’s stock, sending its share price down to $311.75, a three-year low.

Of course, Google’s 10-Q, which was filed on Nov. 7, said pretty much the same thing, though it didn’t have quite the same effect on the company’s share price.

As result of the continued disruptions in the global financial markets, worldwide economic conditions and their impact on levels of consumer spending have recently deteriorated in many countries and regions. Any decreases in or delays in advertising spending due to general economic conditions could reduce our revenues or negatively impact our ability to grow our revenues.”

Awful, ugly news. That said, there is a silk purse to be made from this particular sow’s ear. Store closing sales begin on Wednesday, so this is an auspicious time for the employed to get a jump on the annual holiday consumer binge. Those who aren’t put off by this near-funereal assessment of the economy from Circuit City’s acting chief executive James A. Marcum.

“Since late September, unprecedented events have occurred in the financial and consumer markets causing macroeconomic trends to worsen sharply,” said Marcum. “The weakened environment has resulted in a slowdown of consumer spending, further impacting our business as well as the business of our vendors. The combination of these trends has strained severely our working capital and liquidity, and so we are making a number of difficult, but necessary, decisions to address the company’s financial situation as quickly as possible.”

Happy holidays, huh?

Circuit City shares are currently trading at around 38 cents.

And “current business trends” being what they are, that guidance falls somewhere between lousy and repellent. In other words, eBay (EBAY) believes its full-year revenue will fall short. And with a 1 percent year-over-year drop in gross merchandise value–the total value of all goods sold on the site–during the quarter, there’s little reason to question that forecast. “These are turbulent times for which no one has the perfect playbook,” said eBay CEO John Donahoe. “There is a high degree of economic uncertainty and turmoil in the business market and that is impacting consumer spending.”

Impacting eBay’s stock too. Shares in the company have lost more than half their value (54 percent) since April.

Economic softness in the states is widespread, but apparently it stops short at 1 Infinite Loop. Though consumer spending on electronics is generally trending lower, it’s trending higher for Apple products. According to a new survey by Changewave, eight percent of consumers plan to buy a laptop in the next 90 days, and five percent, a desktop. Of these, 34 percent are considering a MacBook and 30 percent an Apple (AAPL) desktop–up two percent and three percent respectively from the year prior.

This as consumer interest in machines from PC rivals like Dell (DELL) and HP (HPQ) wanes. Planned purchases of Dell laptops have fallen 4 to 20 percent while planned purchases of HP desktops have fallen 3 to 17 percent. “Consumer electronics spending will remain weak over the next 90 days,” said Changewave Executive Director Paul Carton. “The one bright spot is Apple, whose Mac sales are outperforming and are poised to once again reach new all-time highs.”

Odd to hear when Apple products are typically more spendy than those of the company’s rivals. Apple Financial Services must be doing great business these days.