eBay (NASDAQ: EBAY) closed at $33.78 Friday.

Deutsche Banc has a Sell rating on EBAY. According to Deutsche Banc says, the declining US listings, deteriorating demand trends and potential increased investments in 2008, could place significant pressure on profits in 2008.

Thedeal.com says: "One way or another, it appears CEO Meg Whitman is on the way out." Whitman joined EBAY in 1998. Years ago Whitman's said she would leave EBAY after eight to ten years.

EBAY is expected to report EPS on January 23rd.

EBAY January option implied volatility is at 33, February is at 44. EBAY average volatility over the last 26-weeks is 37 according to Track Data, suggesting larger EPS risk.

Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

MAJOR PAPERS:

• Negotiations continued last night on a new labor agreement between Chrysler and the UAW, but it is unclear if an agreement will be reached by today's 11am deadline, reported the Wall Street Journal (subscription required).
• MGM Mirage (NYSE: MGM) is today expected to announce plans to build a $5B resort in Atlantic City, NJ that will be completed in 2012, reported the Wall Street Journal.
• The CEO of Swiss pharmaceutical company Roche Holding (OTC: RHHBY), Franz Humer, said he has no intention of increasing his company's $75 per share bid for U.S. diagnostics company Ventana Medical Systems (NASDAQ: VMSI), and is "very confident" that the offer will succeed, reported the Financial Times (subscription required).

OTHER PAPERS:

• Crain's Chicago Business reported that Aon Corporation (NYSE: AOC) has won back the insurance brokerage business of Sears Holdings Corporation (NASDAQ: SHLD).

WEBSITES:

• Harry Reid, the Senate Majority Leader, confirmed that there's little chance this year -- due to a crowded legislative calendar -- that there will be legislation to increase taxes on the private equity industry, reported TheDeal.com (subscription required).

Those of you who have been interested in blogs for several years are probably well aware of the company Technorati. This website made a splash by becoming the first market-share dominator in the entire Web 2.0 space, especially in the blog search engine space. But times have changed and Technorati is struggling to hold on.

The situation in Technorati is quickly shifting to more difficult, seemingly by the day. As TheDeal.com reported on Friday, the founding CEO of the company recently stepped down. In addition, the company has been forced to recently slash eight jobs to adjust the company's expense structure. Perhaps the most startling of it all -- Technorati is quickly losing its dominant market share position.

According to research firm Hitwise, Technorati's number one market share position is now just secured by 1%. The company currently stands at 34% of the blog search market, while Google's blog search product is a strong and growing 33%.

As you can see from the chart below (courtesy of Alexa.com), Technorati's page views figures are well off of their peak. Understandably, this traffic decline has been a huge catalyst to a weakening position in the blog search market, as well as financial difficulties, because for most internet companies, traffic is everything.

According to TheDeal.com, Private Equity Intelligence is arguing that "the conditions for the long-term growth of the buyout industry are still very much in place." PEI is justifying this point of view, it seems, with the amount of capital still being raised by large private equity firms, despite the recent string of unfavorable news for borrowers and potential borrowers.

PEI goes on to argue that private equity funds are going to continue taking in huge sums of money as institutions raise their "target allocations" towards private equity funds -- a seemingly rational assumption.

But there are several problems with this thesis. Most importantly, I'd bet that the target allocations for private equity funds are going to decrease if the funds' returns suffer due to a more difficult borrowing environment. I'd also argue that recent fundraising success by private equity funds doesn't represent the health of the credit market -- I'd bet that many investors are simply chasing incredible past performance at these funds without recognizing that it was much cheaper to finance these transactions just one quarter ago.

While there's plenty of talent in the private equity space, I tend to believe that the difficult credit situation is going to hurt private equity performance over the next few years.

MAJOR PAPERS:

• The Wall Street Journal (subscription required) reported that Hewlett-Packard Company (NYSE: HPQ) has pushed into the high-end copier market with two new multi-function color printers.
• According to people close to the matter, Sir Richard Branson's Virgin Atlantic Airways has agreed to but up to 24 of Boeing Company's (NYSE: BA) 787 Dreamliners, reported the Wall Street Journal.

OTHER PAPERS:

• The Economic Times reported that US investment bank Lehman Brothers Holdings Inc (NYSE: LEH) will invest almost $80M in an Indian special economic zone, or SEZ, and may invest up to $300M in the venture.
• The Globe and Mail reported that Bed Bath & Beyond Inc (NASDAQ: BBBY) is looking for store locations in Canada, according to industry sources.

WEBSITES:

• TheDeal.com (subscription required) speculated that the proposed buyout of LaSalle Bank by Bank of America Corporation (NYSE: BAC) could catalyze a slew of bank acquisitions in the Chicago market, with possible acquirers including Fifth Third Bancorp (NASDAQ: FITB) and National City Corporation (NYSE: NCC), and possible targets including TCF Financial Corp (NYSE: TCB).
• DigiTimes.com reported that the VP of Taiwan Semiconductor Manufacturing Company (NYSE: TSM) reportedly said that a buyout of Semiconductor Manufacturing International Corporation (NYSE: SMI) by private equity firms would be positive.

The death of cholesterol drug Torcetrapib, which caused Pfizer's (NYSE:PFE) stock to plunge 12% yesterday, has forced the company into purchasing growth rather than developing it. With the company's biggest drug, Lipitor, losing patent exclusivity in 2010, Pfizer must now hurry to acquire potential blockbuster drugs to maintain revenue, since its own pipeline is all but dried up. Company VP David Shedlarz said of the M&A market, "Now we will attack it with a greater sense of urgency."

This desperation means overpaying for possible franchise drugs, which means a potential early Christmas for takeover targets. One such target, according to TheDeal.com [subscription required], is Sepracor (NASDAQ:SEPR), which makes sleep and allergy drugs. Another possible target, according to W.R. Hambrecht, is Nektar Therapeutics (NASDAQ: NKTR), a biopharmaceutical company which makes drug delivery technologies.