eBay’s online auction business is showing signs of improvement after making numerous changes over the past two years, according to brokerage reports Monday.

WSJ.com reports that online auctions still constitute a majority of eBay’s total revenue, though the maturing business has been in decline for the last few quarters. EBay is banking heavily on stronger growth in its PayPal business, but it has also been investing in changes to the auctions side, as the business has come under greater competitive pressure from rivals such as Amazon.com.

Q1 was the worst period for the auctions business as revenue fell 18%, to $1.22 billion. Gross merchandise volume slid by 16%.

"Our channel checks show that the pace of GMV decline in Marketplaces likely bottomed out in 1Q," Youssef Squali of Jefferies & Co. wrote in a report Monday.

The analyst noted that with continued growth in the payments business, "2010 estimates could prove too conservative."

Sandeep Aggarwal of Collins Stewart said the changes made by eBay to the auctions business "are beginning to bear fruit." He highlighted improved search results and an improved fee-calculation process.

"The changes are helping eBay in listing conversion and GMV per listing going up," he wrote. "We also believe that addressing and correcting the structural problems in the Marketplaces business is a key step towards unlocking value in the stock."

Squali of Jefferies says sellers have reported improved outreach efforts by eBay’s management, and the company’s stronger emphasis on fixed-price listings has improved the experience for users.