Everything's under control, folks.
is saying after the number of auctions listed on the site apparently plummeted about 90% over the past month.
Coming after Yahoo! Auctions started charging listing fees, the drop-off has been seen, rightly or wrongly, as a litmus test for Yahoo!'s strategy of diversifying its revenue streams beyond the advertising dollars that account for a clear majority of its top line. Along with other efforts, such as
expanding corporate products, Yahoo! is beginning to roll out a series of fees for specialized services, despite its consumer image as a place on the Internet where information and services are free.
Yahoo! doesn't dispute articles, such as
alleging that the number of listings on the service has declined. Rather, the company says it expected a drop-off in listings, and the number of listings doesn't matter.
"There's definitely a misconception about what this all means," says Brian Fitzgerald, the senior producer of Yahoo! Auctions. "And that's what we want to clarify."
Fitzgerald argues that more important yardsticks for Yahoo! Auctions' success are gross merchandise sales, or the aggregate dollar value of all auctions that close with a winner, and transaction volume, or the number of completed transactions. Fitzgerald says these numbers, which he didn't disclose, have stayed steady after the listing fees, maxing out at $2.25, were instituted in the middle of January.
The reason that gross merchandise sales and transaction volume haven't dropped, says Fitzgerald, is that the auctions that have left are the ones for relatively unattractive items that were cluttering up the site. "The nature of the listings that have dropped off are the ones that were not going to sell anyway," he says.
Meanwhile, he says, the experience of the remaining auctions has improved. The number of bids per auction has increased fourfold, he says. "It's a much more vibrant place because of it." Advertising revenue for Yahoo! Auctions hasn't dropped, he said, even though traffic to the pages where ads are displayed, such as search-related pages, suffered.
Though Fitzgerald says Yahoo! still has critical mass, the question remains: Why would buyers and sellers go to Yahoo! Auctions when they could go to
, where, with, say, more than 10 times the auctions on Yahoo!, buyers have a larger selection to choose from and sellers have a larger audience?
Well, Yahoo! Auctions is only just beginning, suggests Fitzgerald. In response to unhappy user feedback, for example, Yahoo! Auctions has changed its policy on how it responds to users it believes have violated its terms of service, he says. In contrast to its past practice of nonspecific notifications, "we are being very specific about what terms of service they've violated, obviously in the hopes that they can change what they're doing and stay on the system."
As for the critical mass of users on Yahoo! Auctions, Fitzgerald talks about driving people to the auction site from across Yahoo!'s various sites. "As we continue, we'll continue to pull in more bidders from across the network," he says.