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Online auctions, Part 1: The eBay earthquake

10 Sep 2008

Has eBay outgrown the business model that led to its phenomenal success? The company stalwartly maintains that its new fee structure and other changes are designed to benefit all of its sellers - as well as buyers - but its so-called evolution has triggered the exodus of many mom-and-pop operations.

Things are changing at eBay.

eBay says it is evolving to adapt to changes in the larger market, but it's not clear how the auction giant will fare against an emerging army of specialized competitors, and it's far from clear whether sellers will warm to its new internal price structure.

Change, it is said, starts at the top, and so it is with eBay. In March, Meg Whitman ended a 10-year stint as president and chief executive officer, and John Donahoe, who had headed up eBay's Marketplaces segment for three years, stepped in.

Other changes, announced almost simultaneously with the news that Whitman was stepping aside, ensued. Perhaps the most striking was eBay's decision to cut the listing fees to sellers while hiking its final-value charges - the cuts it takes from final sales.

The site also announced discounts for big-volume sellers and tweaked its feedback platform.

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