Outage Puts Damper on eBay Expansion

Fresh off an impressive earnings report and a significant court victory, eBay (Nasdaq: EBAY) said Monday it would expand its live auctions feature to give users access to items being sold at auction houses around the world.

However, on the same day as the expansion announcement, the online auction house suffered its latest service outage -- one that eBay said lasted more than two hours.

On the positive side for the company, eBay said it would link with London-based icollector.com to widen the reach of its Live Auctions feature, first unveiled last September, to as many as 300 additional auction houses around the world.

Geoff Iddison, general manager of eBay's Premiere auction division, said the alliance will enable eBay customers "to bid on a wider selection of works of art from leading auction houses" and enable eBay to "potentially become the de facto standard for live real-time bidding."

Auction Worlds Collide

eBay has been searching for the best way to blend the Web and live auctions -- with their focus on expensive art, rare antiques and other high-end items -- for the past two years.

In 1999, the company paid US$260 million for Butterfield & Butterfield, the fourth largest auction house in the U.S. But it has since closed some of the firm's auction houses and laid off workers, including 15 percent of the staff last November, to cut costs.

Others Have Struggled

Attempts by others to blend the two auction worlds have hit speed bumps as well. A much-touted alliance between Sotheby's and Amazon.com broke down after less than a year in business, with Sotheby's saying it would start up its own direct Web site operation.

However, eBay said that its Live Auctions have proved popular with bidders, with 30 percent of all lots placed up for sale drawing bids from the Web and 20 percent of lots being sold to Web-based bidders.

Another Outage

Meanwhile, eBay announced that its Web site suffered an outage early Monday morning, lasting more than two hours between 2:40 a.m. to 5 a.m. PST. The company said it had "addressed the issues and will continue to carefully monitor the system."

However, an update posted before 7 a.m. PST said that eBay's Seller Search, Bidder Search and Bid History features were currently unavailable.

Earlier this month, eBay suffered a lengthy outage that it blamed on delayed upgrades that are now under way.

Positive Momentum?

Nevertheless, most of the news out of eBay's San Jose, California headquarters in recent days has been good.

On Thursday, eBay won a notable court victory when a California judge dismissed a $100 million lawsuit that alleged that eBay was liable for fake sports memorabilia sold on the auction site.

Analysts also credit eBay's stellar earnings report with providing a boost to all e-commerce stocks. While outpacing Wall Street earnings estimates, eBay said its sites saw $1.6 billion worth of goods change hands during the fourth quarter, a 76 percent increase over the year before.