Yahoo! Defends Auction Listing Fees

After a week of being dogged in the press over its declining number of auction listings, Yahoo! (Nasdaq: YHOO) released numbers Thursday indicating that remaining users now have a better chance of selling their merchandise.

Brian Fitzgerald, senior producer of Yahoo! Auctions, told the E-Commerce Times that in the month since Yahoo! began charging listing fees, the number of items being sold per listed auction had grown 550 percent. Additionally, the number of bids made on each item on the site had increased fourfold, Yahoo! said.

“We couldn’t be more pleased with what is going on in the marketplace,” Fitzgerald said.

Yahoo’s gross merchandise sales have not yet increased, but Fitzgerald is confident that once sellers realize that they have a “higher chance of success” than they did in the past, they will begin listing more items and sales will increase.

Larry Jordan, vice president of marketing for AuctionWatch, an online auction management service provider, told the E-Commerce Times that although his firm did not have detailed data on Yahoo! Auctions, “in general, we have seen an increase in sell-through and transactions for our sellers on Yahoo!.”

Added Jordan: “We have also noticed that the decline in listings to Yahoo! from our users has stabilized, and we have actually seen a modest increase in listing volume over the last two weeks.”

Glass Half Full

The figures released by Yahoo! may help minimize the impact of last week’s news that Yahoo’s auction listings had declined by up to 86 percent since the fee was implemented. Listing fees at the site range from US$2.25 down to 20 cents, depending on the starting and reserve prices of the items.

Fitzgerald said that “the number of listings is not an important metric to us.” He did, however, confirm that the number of listings had decreased.

Although Rosalinda Baldwin, editor of The Auction Guild, told the E-Commerce Times that Yahoo! had predicted a 50 percent decline in listings as a result of the fee, Fitzgerald said he had no idea where she had gotten that number from.

“We never released a number like that,” he added.

Quality or Quantity?

Fitzgerald maintained that the listing fees have improved the quality of merchandise offered by “reducing the clutter.”

Despite the fact that Baldwin publicly questioned the wisdom of implementing a listing fee, Dave Laguercia, who has been listing used cars at Yahoo! Auctions for 14 months, likes the changes that listing fees have brought.

The reduced amount of listings means that “you don’t get buried, and it’s easier to bring [your merchandise] to the front,” Laguercia said.

Laguercia said he has also seen the percentage of his merchandise sold via Yahoo! Auctions increase from approximately 75 percent of items listed to about 95 percent.

Analysts Applaud

Analysts have already registered their approval of the listing fees. Merrill Lynch analyst Henry Blodget predicted last month that the listing fees could contribute from $30 million to $80 million of revenue to Yahoo’s books this year.

“This is just the first step in [Yahoo’s] push to broaden beyond ad sales,” Morningstar.com analyst George Nichols told the E-Commerce Times last week. “The key is to turn its enormous user base into more paying customers.”

Voices Silenced?

Yahoo! also responded to an allegation by an E-Commerce Times source that messages had been pulled from Yahoo’s financial message boards because the posts contained information derogatory to Yahoo!.

The E-Commerce Times received e-mail Wednesday from Rick Gagliano — whose Web-based magazine Downtown tracks auction listings — saying that entries he made to Yahoo’s public message boards had been removed, even though the messages simply stated that Gagliano had new counts for Yahoo’s auction listings.

“I just wanted to give you a heads-up that this is what may happen to your sources if the company in question does not feel particularly flattered or cannot handle the truth,” Gagliano said.

He Said, He Said

Fitzgerald responded by saying that posts to Yahoo! Message boards are not edited, even if they include information derogatory to Yahoo!, unless they violate Yahoo’s terms-of-service (TOS) provisions against posting inflammatory or hate-related material.

He added that the contents of the post in question did not appear to be in violation of Yahoo’s TOS, and that in any case, Yahoo! Auctions has no control over the content at Yahoo’s message boards.

Said Fitzgerald: “We question whether or not [the incident] happened.”