Has the gavel fallen on auction era at eBay?

What do I hear for eBay's once-mighty auction model? ... Anything? ... Two bits? Nothing?

Expect very little, at best, according to this BusinessWeek analysis of the forces behind the demise of online auctions, namely one-click buying:

Auctions were once a pillar of e-commerce. People didn't simply shop on eBay. They hunted, they fought, they sweated, they won. These days, consumers are less enamored of the hassle of auctions, preferring to buy stuff quickly at a fixed price.

Sales at Amazon.com, the leader in online sales of fixed-price goods, rose 37% in the first quarter of 2008. At eBay, where auctions make up 58% of the site's sales, revenue rose 14%. "If I really want something I'm not going to goof around (in auctions) for a small savings," says Dave Dribin, a 34-year-old Chicago resident who used to bid on eBay items, but now only buys retail.

And why not? Life's too short.

Executives at eBay insist they have no plans to pull the plug on auctions altogether, but new CEO John Donahoe has made clear that he sees future growth coming from the company's fixed-price business, which already accounts for 42% of sales.

"As (Web) search has developed, you can get a great deal in a fixed-price format," Donahoe said in an Apr. 16 interview after his first earnings call as eBay's top executive. "We are going to let our buyers choose."

Of course, transitioning away from the auction model is only one challenge facing eBay. A quick look at recent headlines within the Network World archives alone finds:

Mixed reaction within the eBay seller community to all of the changes;

Technical vulnerabilities at the company's PayPal operation;

Legal battles with Craig's List;

Ongoing struggles to contain the activities of phishers and other fraudsters;

A software industry organization suing a group of sellers over their peddling alleged pirated goods;

A government report detailing the sale stolen military gear on eBay;

Hackers selling laptops with Vista exploit code included;

And, layoffs at the company's headquarters.

As I said, who has time for auctions?

Copyright © 2008 IDG Communications, Inc.

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