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eBay "recommendations" upset members

June 19, 2001 

Online auction giant eBay has launched a new e-mail notification service that some sellers claim interferes with their own businesses.

Earlier this month, eBay began sending e-mail to bidders alerting them to similar items up for auction. The process is similar to Amazon's "suggestions," which offer ideas for items related to a customer's previous purchases. Such personalization efforts have long been considered a key element for a successful e-commerce strategy.

But many eBay customers who have numerous items for sale are unhappy with the service because potential buyers are directed to similar products offered by competitors.

"This goes beyond protecting eBay's revenue or enforcing eBay's rules. This goes into stealing money from my pocket," said Bob Miller, a top seller on eBay who deals in stamps and postcards.

eBay spokesman Kevin Pursglove acknowledged that while some sellers are upset, bidders can ask not to receive e-mails. eBay did send a survey about the new policy to some 20,000 of its 30 million registered members, Pursglove said. Of the 4,000 who responded, 80 percent supported the new service.

Concerned about sending potential buyers to a competitor, some sellers argue that eBay is doing exactly what it forbids its sellers to do: contacting losing bidders to offer them similar items.

Late last year, eBay cracked down on sellers who contacted losing bidders. Although an offline deal means eBay loses a transaction fee, the company said it banned such contact because the transactions were a "leading cause" of fraud.

Earlier this year, eBay went further by changing the e-mail system to restrict access to members' e-mail addresses and block other sellers from seeing the e-mail addresses of competitors' bidders.

The move is mirrored elsewhere on the Web, where surviving dot-coms are in a position to be more demanding of their captive audience. In a drive to make money on the Internet, many sites are now charging for once-free content or using aggressive advertising such as pop-up ads, even though readers aren't happy with the strategy.

eBay has emerged as the unquestioned leader in the auction market. Despite its popularity, some members say they still have maintained a rocky relationship with the San Jose, Calif.-based company. Many members are mom-and-pop sellers who have given up day jobs to depend on eBay sales for their livelihoods. As such, they have often been upset by changes they see as detrimental to their business.

Bobby Beeman, a Dallas-based seller who doesn't like the new service, says eBay's changing rules makes it tough on sellers, who have already had to adjust to increased competition and falling prices on the site.

"Reacting to the market is a normal thing that a seller has to do...Reacting to eBay is something that only eBay sellers have to do," Beeman said.

"I can keep adapting and keep changing, but I would like to find something that I can depend on a little bit more than eBay because I feel like I can only depend on eBay from week to week because of all the changes they are making."

Among the other problems eBay members have faced are outages, special fees and, more recently, the discontinuance of listing software many sellers had purchased.

Bidders are upset by the new service too, said Rosalinda Baldwin, editor of The Auction Guild, an online newsletter for the Internet auctions community.

"Bidders hate this because it's spam," Baldwin said. Plus, many bidders complained to her that the "recommendations" were far off the mark.

Ross Wright, who sells artwork and music-related items on eBay, said the new policy hurts the very sellers who bring bidders to the site.

"(You) don't stick a Wal-Mart flier in with a JC Penney flier--the mall doesn't do that. It's not a sound business practice," Wright said.

But one longtime eBay buyer said he likes the new service, which he says helps buyers find items and sellers find more customers. Plus, sellers shouldn't be upset since the e-mail is sent after their auction ends, David Eaton said.

eBay is "just providing a service to the customer that the customer was looking for in first place," Eaton said. "If sellers would stop to think, it works for them in the same manner. They are really bringing customers to you, not from you."

To protest the new policy, which began earlier this month, Miller tried to auction off a special eBay jacket he received for having one of the highest feedback ratings. The auction included sarcastic comments about the new "recommendation" service: "Should you be outbid, we will inundate you with unsolicited commercial e-mail (a.k.a. spam) recommending that you go elsewhere and bid on something else we, in our infinite wisdom, think you want."

More than 150 supporters bid it up to $43 million before eBay shut down the auction one day later.

His protest resulted in several other auction sites courting Miller to move his auctions over from eBay--something that hasn't worked out for him in the past.

"Not a single one of us really wants to leave," Miller said. "We just want eBay to pay attention to us, to give us a little bit.

"You raised fees, fine. You're changing things left and right, fine. But don't steal from us."

By Troy Wolverton, Copyright © 1995-2001 CNET Networks, Inc.

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