Late Friday night, leading online auction site eBay (Nasdaq: EBAY) apologized for a service outage that had crippled its site for nearly 24 hours. By that time, however, the damage had already been done. Disgruntled eBay customers vented their frustrations on online message boards and eBay stock fell more than nine percent, dropping 16-13/16 to 165-7/8 on Friday.
The service outage, which prevented any bidding and listing of new items, began at approximately 9:50 p.m. Eastern Time on Thursday and lasted until 7:25 p.m. on Friday.
The problem was traced to Sun Microsystems software. eBay said it believes all information and data on the site was recovered. eBay, which unveiled a new redesign on Wednesday, also announced that it has reverted back to its old interface in order to prevent future problems.
“We know we must provide continuous service for our community, and that we have let our community down,” said Meg Whitman, president and CEO of eBay. “We will not rest until we make sure that this problem will not occur again and that we make things right for our users.”
eBay will extend all auctions that would have ended during the hours of the outage by 48 hours. EBay will also refund all fees for auctions between June 9 and June 11. This move to appease customers won’t be cheap. eBay says that the outage, auction extensions and refunds will reduce its second-quarter revenues by at least $3 million and as much as $5 million.
“No Bells and Whistles”
In an open letter to eBay’s customers, Whitman and company founder Pierre Omidyar said that eBay has ” taken a serious look at our priorities because of this outage. We hope you will give us the chance to show you our commitment to your success and to keeping eBay up and running 24 hours a day, 7 days a week. Our goal: Uninterrupted service. No fancy bells and whistles. We just want to make it work.”
Whitman and Omidyar added that eBay “will offer a free listing event some time in July as a token of our appreciation of your continued support and understanding.”
Will Users Abandon eBay?
During the first three months of 1998, eBay’s registered users grew from 2.1 million to 3.8 million as gross merchandise sales totaled $541 million. Now eBay’s top concern is trying to win back the trust of many customers who are taking their business elsewhere. eBay’s loss is also a gain for other companies that offer person-to-person auction sites like Amazon.com and Yahoo!.
In fact, there are numerous postings on Web message boards about how the outage will damage eBay. Message boards on Yahoo! and AuctionWatch.com were especially busy.
Anti-eBay Petitions Circulating on the Web
In addition to messages from customers who say they will abandon eBay and investors who are angry, anti-eBay petitions are circulating on the Web. There are also postings that express concern about eBay’s technology. After all, the company’s redesigned interface has been shelved, and the resources used to produce that interface might have been wasted. Shares of eBay were down 10-5/8 to 155-1/4 in early trading Monday.