Apr. 16, 2008

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Today, eBay has officially said it will cancel the part of its site that allows users to place bids on items up for sale at specific live auctions after Dec. 31, 2008.

Jim Ambach, eBay's vice president said "this announcement will represent a significant change for the small number of partners, buyers and sellers involved with Live Auctions, which is why we're giving eight months notice."

Ambach added "we've been in touch with each of our service provider partners, and between now and the end of 2008, we'll continue to work with our Live Auction partners and sellers to ensure a smooth and seamless termination of this aspect of our business."

However, eBay will still continue to offer auction-style listings, which constitute the majority of items on its website, Ambach pointed out.

The criteria for Live Auctions and eBay bidding widely differ from each other, and has been since its implementation more than four years ago. Live Auctions works like a regular real-time auction, in which registered eBay users can submit real-time or absentee offers and observe the proceedings online, and the auction closes when the last bid is made.

In the traditional eBay model, bidding takes place within a set 10-day window.

Additionally, the cancellation of Live Auctions won't have any material affect on eBay's business, Ambach said. It's a time of change at eBay, which changed its fee and feedback system in February and laid off 125 employees last month.

Not long after eBay's announcement, LiveAuctioneers.com, which partnered with the company on Live Auctions for more than five years, said it will launch its own online bidding platform for the sale of art, antiques and collectibles. The project is slated for mid-June 2008.

The change to the new format won't have an impact on LiveAuctioneers' ongoing operations either, nor will it affect any of its 2.5 million active buyers or the support it provides to 700 auction houses. It is anticipated that other auction houses will sign up on the LiveAuctioneers.com platform.

From a strict security standpoint, the change appears to be a sound move, Scott Cleland, president of Precursor said. "If you start talking about fraud on the outside, it looks like they're efficiently distancing themselves from things they don't control."

eBay is eliminating Live Auctions so it can focus on its top priorities of improving customer support and minimizing the risk of fraud, Ambach noted.

"They're simply doing the classic business strategy of focus, focus, focus. eBay is concluding that the net benefit from those auctions outside of its own market have more net risk than real net benefits," Ambach added.

After markets closed Wednesday, eBay reported quarterly sales of almost $2.2 billion, up 24 percent from 2007's comparable period. The company also offered an upbeat outlook for the balance of the year.

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Source: eBay.

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