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Planned Boycott Of eBay Proves Harm Of Monocultures


Posted by David Berlind, Feb 10, 2008 08:55 PM

For the longest time, the term "monoculture" was synonymous with Microsoft. But eBay is probably another monoculture, and given the degree to which it so easily empowers businesses and individuals to engage in e-commerce, it also could be just as harmful, if not more so. Need evidence? You know it's a monoculture when, instead of switching to a competitor, an angry customer's only choice is to join other angry customers in a planned boycott.

That boycott -- also being called a "strike" -- is exactly what many eBay users have planned for one week starting on Feb 18. The rebellion comes in response to changes to eBay's fee structure as well as the elimination of negative feedback (a "social tool" that both buyers and sellers can use in an attempt to warn other eBay users about people with whom transactions could be problematic). According to a story by Maliki Zouhali-Worral found on CNNMoney.com (see Outraged eBay sellers plot strike week):

A discussion thread on eBay's own forums with the title "Sign the pledge_no sales Feb 18-25!" has received 4,000 posts in nine days, many expressing members' intentions to join the boycott. The strike is scheduled to overlap eBay's planned Feb. 20 launch date for its new policies, which include fee hikes, a 21-day hold on some funds sent through its PayPal payment service, and disallowing sellers from leaving negative feedback for their buyers.

Facebook and MySpace pages dedicated to the strike are circulating, along with an online petition, and a mailing list called the Online Seller Cyber Union has gathered more than 700 e-mails in a week. A YouTube video on Google (GOOG, Fortune 500) entitled "Feb 18-25th 2008: Worldwide Ebay Strike" has racked up more than 16,000 views since Saturday.

Perhaps what's most troubling, however, are some of the quotes that Zouhali-Worrall got from eBay customers:

"I'm scared because there isn't anywhere else to go," [Joe Hackney] said. "I've looked at other sites and there's no one there."

Back when eBay first started, there were other entrants in the online auction business. Fairmarket was one. Yahoo ran another. But Hackney's final words are the reason that when it's time to buy or sell in an online auction, eBay is the place to be. If you're a seller, then you know eBay is where what you're selling will be seen by the most buyers and where its final selling price has the best chance of getting run-up. If you're a buyer, chances are someone is selling what you're looking for on eBay. Although I know that better deals can probably be found elsewhere (for example, on specialty classified sites where listings don't get seen by nearly as many competing buyers), I routinely shop eBay first for whatever it is I'm looking for. Craigslist comes next.

In a story previously reported on CNNMoney.com (see EBay fee hike sparks seller rebellion), Fortune's Kathleen Ryan O'Conner wrote:

Usher Lieberman, an eBay spokesman, said the new plan is good for sellers. The company's calculations show that up to 60 percent of them will see savings. EBay isn't worried about the explosive reaction among sellers, he said -- they have a lot to absorb right now.

"We have a passionate community," Lieberman said. "If we weren't hearing from them on this, we would be worried."

If that's really what Lieberman said, it rings a bit disingenuous with me. The idea that a giant public company would be worried if, after announcing some incredibly impactful policy changes to its customers, those customers said nothing, is pure folly. Such announcements are preceded by weeks of internal debate and preparation for the fallout. When no fallout happens (and I've been around in some businesses when that's actually happened), everyone breathes a huge sigh of relief.

Sellers have no interest in going to a site where there are hardly any buyers. Buyers aren't terribly interested in wasting their precious time on sites where there aren't many sellers. To eBay they all go and the result is exactly what happens when any monoculture exists: a monoculture's rules can change and there's pretty much nothing its customers can do but suck it up.

EBay knows this. The reason it's "not worried about the explosive reaction among sellers" is because it knows those sellers don't have much choice.

Related: InformationWeek's Alex Wolfe says EBay's Feedback Changes Are Bad News For Buyers.

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