Global GMV came in at $14.3 billion in the quarter, down 1% compared to last year, with both the U.S. and international geographies decelerating from last quarter. Global GMV growth excluding vehicles was up 3%. Active user growth came in at 3% on a trailing 12-month basis. Excluding China and Taiwan, where we are now part of joint ventures, this metric remained at 6%.

We remain encouraged by strong rates of growth in our fixed price format, which accounted for 46% of GMV in the quarter and continues to grow much faster than the auction style format.

Let me provide a deeper look into our Q3 GMV performance. Our revised fixed price fee structure helped fuel a big surge in supply on our sites with listings growth of 26%. However, our conversion rates dropped by a sharp 18%, resulting in sold items growth of 6%, a four-point deceleration from Q2.

We’re in the early stages of improving our finding experience and there’s still a bit of work to be done. We rolled out our new finding platform in the U.S. near the end of the third quarter, which allows us to optimize our data and algorithms in order to better match up buyer demand with our vast selection of merchandise.

Average selling price continues to fall, down 7% in Q3, primarily impacted by the economic downturn as consumer’s trade down and buy fewer large ticket items. The combined deceleration sold items and average selling price resulted in GMV growth of minus 2% on an FX-neutral basis.

Obviously, the current GMV trend is not where we would like it to be but as John said, we remain confident that we are on the right path and we believe the improvements we are making for our users will ultimately move the needle.

Clearly the tough economy makes our job more difficult and lengthens the time it will take for progress to flow through to the financials but we remain committed to reinvigorating growth in our core business.

As John said earlier, our adjacencies within marketplaces are characterized by attractive, fast-growing businesses such as classifieds, advertising, and Stub Hub. Classifieds showed strong revenue growth at 59% over last year, with our text and graphical advertising partnerships continuing to exhibit strong growth at 127%. And despite slowing during the second half of the quarter, Stub Hub increased revenue by 46%, helped by our partnership with Major League Baseball and improvements to buyer conversion.

Now let’s turn to our payments business. PayPal posted another strong quarter, with total revenue coming in at $597 million, a 27% increase versus the same period last year. Total payment volume was $14.8 billion, a year-over-year increase of 28%. TPV grew by 24% in the U.S. and 37% internationally.

PayPal continues to achieve ubiquity on the web through increased penetration on eBay and an increasingly expanded footprint beyond eBay.

In terms of key operating metrics, global active accounts grew to $65 million for the trailing 12 months, an increase of 19% over last year. On eBay, buyers are increasingly using PayPal as a safer way to pay online. PayPal''s global TPV on eBay grew by 12% year over year as the global penetration rate of addressable GMV was 60%, a six-point increase over Q307 and a three point sequential increase.

Beyond the eBay platform, PayPal merchant services business posted another strong quarter despite the difficult economic environment. Merchant services recorded $7.5 billion of global TPV in the quarter, representing 49% year-over-year growth and accounting for 51% of total TPV. As John mentioned earlier, this marks the first quarter that PayPal''s TPV was larger than eBay''s GMV.

In addition, this is the first quarter that PayPal''s off-eBay volume was larger than its on-eBay volume. PayPal has penetrated 35 of the top 100 online merchants in the U.S. and accounts for 5.3% of U.S. e-commerce, not including eBay.

PayPal''s global take rate remained flat at 3.89% in Q3, while transaction margin improved modestly to 62% sequentially.

Last week we announced our agreement to acquire Bill Me Later, a leading online transaction credit provider that is intended to strengthen and extend PayPal''s leadership position in online payments. We believe Bill Me Later will help PayPal achieve greater merchant and consumer adoption, leading to benefits from network effects. In addition, we believe we will capture significant synergies between our businesses. We expect this transaction will close mid-fourth quarter.

Now let’s turn to our communications business. Skype posted total revenue of $143 million in the third quarter, an increase of 46% over last year. Total registered users grew to an impressive 370 million, representing an increase of 51%. Skype-to-Skype minutes for the quarter increased to 16 billion, accelerating to 63% growth. SkypeOut minutes increased to 2.2 billion, also an acceleration of growth from last quarter to 54%. Skype continues to invest in the business while expanding its margins to 26% in the quarter.

Now let me touch briefly on ink level operating expenses and cash position before I discuss guidance. We recorded $674 million of non-GAAP operating income, up 14% from last year, and non-GAAP net income of $592 million, up 5%. Sales and marketing as a percent of revenue improved by 400 basis points from the year-ago period, due in part to a more efficient online marketing spend and in larger part to investments in buyer loyalty and retention, much of which gets recorded as contra revenue instead of being expensed as sales and marketing.

Product development came in 30 basis points higher than last year while G&A was up 50 basis points, due to higher fraud losses at PayPal and bad debt expenses.

We ended the third quarter with $3.3 billion in cash and cash equivalents, down $400 million from last quarter. At quarter end, $2.9 billion of our cash was located outside the U.S. During the quarter, we repurchased approximately 25 million eBay shares at a cost of $623 million.

So with that, let me turn to guidance -- for the full year of 2008, we now expect revenue to be in the range of $8.525 billion to $8.675 billion, and non-GAAP EPS in the range of $1.69 to $1.71. The reduction in our guidance is primarily a function of a stronger U.S. dollar, a tougher economic climate, and dilution from the acquisitions announced last week. The weak trends we saw in the second half of the third quarter have continued into Q4 and our guidance reflects the uncertainty in global consumer spending.