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When auction revenue falls, eBay decides to bank on payment processing and online classifieds. eBay is buying online bill pay service Bill Me Later and two other companies which are based in Denmark.

They’re also spending quite a bit of cash - around $1.3 billion including Danish companies Den Bla Avis and BilBasene. Total spend comes to about $1.3 billion.

Bill Me Later is an online layaway program where you can make payments on a purchase. eBay will then use PayPal to process the payments. As of last month eBay stopped taking money orders or checks for payment in the US - essentially forcing everyone to use PayPal.

Today, Walmart.com announced that they are accepting PayPal as an option to pay for purchases on the site.

To boost third quarter results, and perhaps to help fund the new purchases, eBay will axe 10% of their workforce across the world. That amounts to around 1,000 people losing their jobs.

In the US eBay has lost out to free online classifieds like Craigslist (which it’s in legal battles with and part owner of) and are aggressively expanding into other countries.

To get more details about eBay’s announcements you can listen to an investor conference call today (Monday, October 6, 2008) at 5:30 a.m. PDT. Or you can watch a webcast live or achived at http://investor.ebay.com.

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