This morning JP Morgan analyst Imran Khan downgraded eBay's shares from "neutral" to "overweight." He also castrated the auction site's earnings estimates for the second time this week, reports MediaPost.

In an equities research report entitled "eBay Inc.: Fall Of A Franchise," Khan listed a series of issues that are keeping eBay from remaining competitive in the marketplace.

"We believe eBay's biggest challenge is an inferior technology platform, which is making it difficult for the company to compete with other e-commerce platforms, such as Amazon's," he wrote.

"In our view, the company has yet to deliver meaningful improvements in search functionality or user experience, which we believe is evident in the inverse relationship between the listing growth rate and conversion rate. We think that if eBay fails to improve the user experience, it will inhibit future growth even when the economy recovers."

He also pointed to retarded growth in "non-core" assets — in PayPal revenues, for example, as well as poor profit conversions at shopping.com and StubHub.

Margins were projected to "shift toward lower margin businesses [like Paypal and Skype]" as revenue continues to decline.

The auction site recently acquired two more businesses, following its decision to cut 10% of its workforce (about 1000 employees).