Frustrated sellers put the heat on 'FeeBay'

SAN FRANCISCO - eBay is under pressure to spell out its plans to counter looming competition from web search giant Google.

The web marketplace - dubbed "FeeBay" by some sellers frustrated with increasing eBay fees - is looking for ways to rebuff rising challenges from companies such as Google while balancing profit margin protection and sellers' desire to keep their eBay costs as low as possible.

Over its 10-year history, eBay has been largely unmatched in its ability to connect buyers and sellers and to foster a friendly e-commerce community.

But sellers have become increasingly vocal in the United States, complaining that eBay has become too corporate and profit-focused.

This year, they pushed back against eBay's latest price increases, winning some concessions. But threats to abandon eBay for smaller rivals such as Overstock.com do not appear to have come to pass.

eBay's shares tumbled almost 20 per cent in January after its quarterly profit missed Wall St expectations and raised red flags about growth prospects.

Some financial analysts downgraded the shares, cautioning that eBay's key US and German markets appeared to be maturing, making future growth more expensive.

David Betts and his wife, Joanna, regular sellers on eBay, are typical of the problems the site faces.

The Pennsylvania couple, who have sold crystal doorknobs, robes from an old secret society and other wares on the site, say they are happy with it, but they also advertise their antique and collectible items on Google and are building their own e-commerce site.

Hani Durzy, eBay's spokesman, says the company's sellers have been experimenting with other channels for some time.

"We fully expect them to. Our job is to continue to provide the best value proposition," Durzy said.

Google's stock has shot up since its August debut and by some measures has allowed Google to unseat eBay as the most valuable Internet name. Both companies now are valued at around US$50 billion.

BLOOMBERG