What's going on over at eBay?


These are definitely some interesting times for e-commerce mega site eBay Inc. (NASDAQ: EBAY). In the past few weeks, the site has been under attack from some of its sellers who have launched a strike against the site in response to recent changes. While eBay denies any impact from the strike, there are some out there who just aren't buying it.

At the root of the current situation are changes made by eBay over the past month that have left its users frustrated to say the least. The core reason for the frustration relates to eBay's decision to lower its listing fees but at the same time raise its final sale fees. This is being seen as a direct slap in the face to the site's more successful sellers. Also adding to the current resentment is the decision to hold certain PayPal payments by up to 21 days in an effort to fight fraudulent activity on the site. As if those two things were not enough, the site went forward in changing its practice of allowing sellers to leave negative feedback on buyers.

As you can imagine, sellers were not happy and launched a sellers' strike that they hoped would convince the company to roll back their changes. Depending on who you listen to, the strike has either had a significant impact on auction listings, or no effect whatsoever.

eBay is of course, denying any impact from the strike. eBay points to the fact that it had launched a massive cost cutting campaign right before the strike got under way which had temporarily inflated its number of listings. As a result, the decline in listings was a more a result of their campaign coming to close than it was from the strike.

But could there be something a little more sinister taking place on the site? Rumors are definitely swirling that the site has actually been padding its numbers with fake item listings. eBay wouldn't dare do such a thing, would it? It has already admitted that a "bug" in the system did in fact insert some fake listings into the site's database. The question is, was this really a bug, or did the site knowingly inflate its listings?

Upset eBay users are convinced that there is some funny business going on over at eBay, and one unhappy user has gone so far as to collect as much data as he or she can to send to the FTC for investigation. Another user has documented what he interprets as shady auction listings in a video that he has shared with the world via YouTube.

Not only are users voicing their concerns over the inflated listing numbers, they are also claiming the eBay has been censoring and deleting critical posts on its popular message board.

So, what exactly is going on over at eBay? A site that gained its massive popularity by creating a large interactive community is now in the situation where it is being policed by that same community. The question is, which side is blowing hot air? eBay itself, or disgruntled eBay users?

Let us hear what you think. Which side do you believe?

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.

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Last updated: February 10, 2012: 04:47 PM

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