EBay Inc., a onetime Internet star that thrived with its pioneering auction model, is retreating from its strategy of competing across the board in online retailing as it contends with its own missteps and changing consumer behavior.

EBay Chief Executive John Donahoe told analysts Wednesday that the San Jose, Calif., company plans to focus its online-marketplace business on used and overstocked goods, rather than on the retail market for new goods that is dominated by competitors such as Amazon.com Inc.

EBay's...