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Yahoo Eliminates Fees for Auction Site Users

June 07, 2005|From Bloomberg News

Yahoo Inc., the most-visited Internet site, Monday eliminated fees for customers using its auctions website in the U.S., undercutting EBay Inc., the world's largest Internet auctioneer.

Yahoo had been charging its customers a fee of 5 cents to 75 cents to list an item, spokeswoman Sabrina Crider said. Yahoo also eliminated the fee that it charged when an item was sold. That fee was based on the value of the item.

The cuts challenge EBay and other Internet auctioneers such as Amazon.com Inc. and Overstock.com Inc., which continue to charge fees for listing items on their sites.

"We want to get as many product listings into the marketplace as possible," Rob Solomon, vice president and general manager of Yahoo's shopping and auction sites, said in a telephone interview.

"The more searches and more pages, the better the business model."

Yahoo is facing increased competition in the shopping area after EBay announced last week that it was buying Shopping.com Ltd., a price-comparison site that's a rival to Yahoo's.

Yahoo has lagged EBay and Overstock.com in the number of items listed on their auction sites, according to data published Sunday by Dealscart.com, a site that tracks online auctions. EBay had 13.3 million listings compared with 189,799 for Overstock.com and 116,382 for Yahoo's U.S. site.

Under Yahoo's previous pricing structure, the company charged a fee based on the price of the item sold, starting at 2% for products under $25, in addition to a listing fee.

EBay's auction listing fees start at 25 cents, in addition to charges based on the final sales price. These fees begin at 5.25% of the first $25 of the value of the item sold.

EBay spokesman Hani Durzy declined to comment on Yahoo's move. He said EBay has found that listing fees are useful in keeping clutter off of the site.

"They ensure that items that only a seller believes can sell will be listed," Durzy said. "The success of the EBay marketplace has pretty much proven that listing fees add value to a marketplace."

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