EcommerceBytes-NewsFlash, Number 1033 - June 06, 2005     10 of 5

Yahoo Auctions Axes Listing Fees: Response to eBay Acquisition?

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Yahoo is making it free for sellers to list items on its auction platform. Rob Solomon, Vice President and General Manager of Yahoo Shopping, said free auction listings would benefit both buyers and sellers by generating more content of a higher quality and would provide diversification for sellers. Solomon said Yahoo Shopping currently has 60 million product offerings with 250,000 sellers.

However, online-auction sellers are likely to be under-whelmed by Yahoo's announcement. "Non-paying bidders" are the bane of auction sellers' existence, and unless Yahoo backs up its announcement with a commitment to auctions, sellers may not find "free" worth it.

Yahoo Auctions first began charging listing fees in January 2001, causing an outcry from its users. Within several months of the fee implementation, Yahoo Auctions listings dropped from 1.5 million to approximately 350,000. A spokesperson at the time defended the fee, saying the company believed it would improve the quality of the auction platform.

This week's news from Yahoo comes on the heels of eBay's announcement it would acquire comparison-shopping site Shopping.com, which competes against Yahoo Shopping. eBay's planned acquisition of Shopping.com signals an entry into a highly competitive area. Yahoo, Google and Amazon all have shopping and search services, and Yahoo and Google have paid-search, an increasingly popular service that help etailers drive traffic to their offerings. eBay's Keyword program is a paid search service for its own sellers exclusively on its own sites, and it's likely to expand the service on Shopping.com.

Search & Shopping Services from Major Players

. eBay Yahoo! Amazon Google
Auction Marketplace Yes Yes Yes No
Fixed Price Marketplace Yes Yes Yes No
Shopping Multi-site Search Service Shopping.com (in Q3 2005) Yahoo! Shopping/
Kelkoo in Europe
Aside from its partner retailers, no Froogle
eCommerce Website Hosting No
(acquired Kurant technology in 2005)
Yes No
(has solutions for largest retailers)
No
Multi-site Search Engine No Yes Yes
(A9)
Yes
Paid Search (contextual advertising) Service eBay site only; Shopping.com serves up its own contextual ads Yahoo Search Marketing (formerly Overture) No Google Adwords
Online Auction Listing Fees $.01-$0.99: $0.25

$1-$9.99: $0.35

$10-$24.99: $0.60

$25-$49.99: $1.20

$50-$199.99:
$2.40

$200-$499.99: $3.60

$500+: $4.80
$.01-$9.99: $0.05

$10-$24.99: $0.15

$25-$49.99: $0.35

$50+:
$0.75
$0.10 N/A
After 6/6/05: Free

Shopping.com, which agreed to be acquired by eBay in the third quarter subject to regulatory and shareholder approval, competes directly with Yahoo Shopping. Both Shopping.com and Yahoo Shopping allow consumers to enter a search for a product, like "iPod 20GB," into their engines and peruse a resulting list of products offered from thousands of online retail sites.

eBay's core competence is its ability to bring buyers and sellers together. With other major sites aggregating product listings and making it easier for consumers to comparison shop online, eBay is feeling the heat. Some of its largest sellers are leaping into a multi-channel selling strategy, with paid-search and comparison shopping sites aiding their marketing efforts.

All four sites will be hoping to dominate the upcoming holiday shopping season, and will spend the summer doing their homework.

http://auctions.yahoo.com

edited for clarification 6/6/05


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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