eBay Cuts the Link to Real-Time Auction House Bidding

eBay is killing off the part of its site that allows users to place bids on items up for sale at live auctions. The company will no longer offer eBay Live Auctions after Dec. 31.

“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,” said Jim Ambach, eBay’s vice president of seller experience. “We’ve been in touch with each of our service provider partners, and between now and the end of this year, 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.”

A Different Model

The parameters for Live Auctions and eBay bidding widely differ from each other. 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.

Nevertheless, the company will continue to offer auction-style listings, which constitute the majority of items on eBay.com, Ambach pointed out.

It’s a time of change at eBay, which changed its fee and feedback system in February and laid off 125 employees in March.

eBay shares traded at US$32.50 Wednesday afternoon on the Nasdaq stock exchange. The stock had a year-on-year range of $25.10 and $40.73. The company is scheduled to announce its first-quarter earnings after the market closes Wednesday.

Not Essential to the Business

The elimination of Live Auctions won’t have any material affect on eBay’s business, Ambach asserted.

“It’s really not a big piece of their business,” Pacific Crest Securities analyst Steve Weinstein told the E-Commerce Times. “I think they’re just looking to try to reinvigorate their core business. The platform caters to small sellers that have sourcing expertise and unique items.”

Not long after eBay’s announcement, LiveAuctioneers.com, which partnered with the company on Live Auctions for 5 1/2 years, said it will launch its own online bidding platform for the sale of art, antiques and collectibles.

“We expect the changeover to take effect on or before Dec. 31,” said LiveAuctioneers CEO Julian Ellison.

The change to the new format won’t have an impact on LiveAuctioneers’ ongoing operations, nor will it affect any of its 2.5 million active buyers or the support it provides to 700 auction houses, he noted, adding that he anticipates other auction houses to sign on to its platform.

A Sound Move

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

From a security standpoint, the change appears to be a sound move, Scott Cleland, president of Precursor, told the E-Commerce Times. “If you start talking about fraud and stuff on the outside, it looks like they’re efficiently distancing themselves from things they don’t control.

“Basically, they’re doing the classic business 101 strategy of focus, focus, focus. They’re concluding [that] the net benefit from those auctions outside of the eBay world have more net risk than net benefits,” he added.