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Yahoo Auctions Ups the Bids

Year-old auction site draws from sibling sites to challenge eBay on the block.

By Anne Fischer Lent, PCWorld   

Auctions are big, big business on the Web right now, and many a site is joining the bidding. Yahoo Auctions, only a year old, recently exceeded 1 million simultaneous daily auctions. That amount is still only one-third the sales claimed by eBay, which launched the online auction frenzy in 1995. Nevertheless, Yahoo Auctions is now cast as a leader, offering some features that are being mimicked by its predecessors.

Yahoo Auctions is one of the fastest-growing global auction sites. Part of its appeal is that it's free to participants; buyers and sellers can meet at Yahoo and bid to their hearts' content without shelling out a dime to the site itself.

Also, Yahoo recently expanded its international presence with new auction services in Brazil, Denmark, Hong Kong, and Korea, according to Yahoo representatives. The auctions now stretch around the world and encompass 11 languages. The Japan site alone has more than 30,000 simultaneous daily auctions after only a month of service.

The site also wins points for its stability. EBay has experienced several much-publicized downtimes during which auctions came to a screeching halt, and has in fact been out of commission three times this week alone. In response, eBay plans to add computers and staff in pursuit of a more robust service. Meanwhile, eBay also plans to counter Yahoo's move into new territories by expanding internationally as well as into local markets, such as Los Angeles, and it is adding higher-ticket products such as automobiles and artwork to try to boost its profit margin.

Despite the leapfrog game with services and features, one inherent advantage of Yahoo Auctions is its membership in an integrated family of online sales offerings that include shopping, classifieds, travel, and finance. With more than 100 million customers worldwide, Yahoo has a ready audience to pull to its auction site.

Unfortunately for Yahoo, though, eBay has jumped into the cobranding fray, partnering with three America Online properties--CompuServe, ICQ, and Digital City--so visitors can access eBay from any of those sites. And in August, AOL and eBay launched a cobranded site for the AOL proprietary service, giving AOL's more than 19 million members access to eBay's marketplace.

The greatest benefit to Yahoo Auctions is certainly the fact that Yahoo charges no fees to its buyers and sellers. But the catch is that the site is loaded with sellers, and not as many buyers.

Buyers may look beyond Yahoo Auctions in part because Yahoo's search capability is less than accurate, and sometimes sends seekers of specific products on wild-goose chases. When buyers know they can get what they want on eBay, why look elsewhere? But Yahoo Auctions is growing by leaps and bounds, and the more auctions, the more action--or so Yahoo hopes.