Yahoo! prepares to dump its auction site


As Yahoo! Inc. (NASDAQ: YHOO) continues to focus on attacking Google Inc.'s (NASDAQ: GOOG) established and lucrative advertising business model, the company is slimming down in some areas to focus on others. As such, Yahoo! Auctions will close in June after about nine years (read: a lifetime) in existence. I remember in 2001 when Yahoo! Auctions was poised to compete seriously with eBay Inc. (NASDAQ: EBAY). Since then, it had done nothing like that and has withered while eBay has dominated online auctions.

In other words, this is no loss to Yahoo!, but it does signal that the company may soon be ridding itself of other divisions and products that aren't aligned with the company's strategy to 1) make money on customer subscriptions to premium products, and 2) to make money on advertising and try to gain headway in the revenue pool that Google dominates right now.

By contrast, Yahoo! Auctions garnered about 0.2% of U.S. online auction visits this year while eBay has seen about 85% of that action. If you can't compete in the space, you might as well leave -- or so the analyst thinking goes. I agree. Yahoo! Auctions is not contributing at all to the success of Yahoo!, so selling it shutting it down seems the best option. The remaining question left is this: what other properties will Yahoo! be looking to scuttle soon?

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