The latest woes at eBay include a ten-hour outage Friday, with search problems continuing over the weekend. The glitches follow a 22-hour crash in mid-June and a three-hour breakdown in mid-July.
After the June blackout the company announced official policies for extending auctions and refunding fees in the case of future outages. Although the refunds reflect a loss of revenue for eBay -- auction fees are the company's only business -- the real cost is difficult to measure if the repeated problems drive buyers and sellers to competing auction sites run by the likes of Amazon and Yahoo. As many Wall Street analysts have noted, the business model behind eBay's swap meet seems to argue that bigger is better -- the biggest auction site, with the most stuff for sale, is going to attract the most buyers. Which in turn attracts more stuff for sale, and so on. That's probably why unseasoned eBay has continued to grow despite the technical problems -- Friday's outage disrupted 2.6 million auctions (and 64 million pageviews), compared with 2.3 million (and 50 million pageviews) that were disabled back in June. Amazon, which launched its own auctions in the spring, has yet to detail how it's going except to say that they are the fastest growing piece of its business. MORE >>