Updated from 1:16 p.m. EDT
Yahoo! will waive the listing fees, which had ranged between 5 cents and 75 cents a listing, as well as the transaction fees equal to 2% of the final value of items sold through its site, and the additional 1.5% fee for more expensive items.
The move, which will only affect U.S. auctions, won't apply to auctions in Canada and throughout Asia. Yahoo!'s early entry in Japan made it the top online-auction site in that country, preventing auction leader eBay (EBAY - Get Report) from ever getting a dominant foothold there.Yahoo!'s move reportedly was six months in the making, and it wasn't intended as a counterstrike against eBay, which last week announced it would buy shopping-comparison site Shopping.com (SHOP) to expose eBay's sellers to a broader audience of online shoppers. Yahoo! has long offered its own shopping-comparison search engine. The fee-free auctions may come too late to tap into what had been a growing discontent among eBay sellers that was triggered in part by the company's decision in January to boost listing fees. eBay has since worked to mollify unhappy sellers, some of whom responded with a boycott and by moving some listings to rivals like Yahoo!, Amazon.com (AMZN - Get Report) and Overstock.com (OSTK - Get Report). Those moves, which included waiving other auction-related fees, seems to have quelled that discontent. But eBay faced another problem as larger sellers began looking for other venues, such as Web-search ads, to market the goods they were selling through eBay. The Shopping.com purchase was done in part to meet those sellers' desire to have access to more shoppers. Yahoo!'s move is an incremental one in that its auctions have nowhere near the ubiquity as eBay's, and it's unlikely to make a dent in the online-auction giant's sales. But it's emblematic of a larger, longer-term trend of Internet giants encroaching onto one another's turf as each seeks new sources of revenue, and as the lines between search engines and e-commerce grow more blurred.