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eBay, AuctionWatch call a truce

As part of the arrangement, AuctionWatch agrees to stop searching the auction giant's listings.

For AuctionWatch and eBay, this may be the beginning of a beautiful relationship.

As part of a deal announced Tuesday, AuctionWatch has agreed to stop searching eBay's listings. eBay has also named AuctionWatch as one of its preferred service providers.

"Strategically, our search product becomes less important," said Rodrigo Sales, chief executive officer of AuctionWatch. "Having a positive relationship with eBay and also the ability to work with eBay collaboratively to bring larger merchants online to sell through this channel becomes much more important."

AuctionWatch's search of eBay's listings had led to a contentious relationship between the two companies. eBay is happy to have that dispute put to rest, representative Kevin Pursglove said.

"In order for the relationship between the two companies to move forward, it was best to put this issue behind us," he said. "From our perspective, we now have one more big player that's going to be working to provide merchandise to eBay marketplace."

Although AuctionWatch is one of the top auction service companies--its members list some 2 million auctions on eBay each month--the San Bruno, Calif.-based company has been at odds with eBay for much of the last two years because of AuctionWatch's search engine. By using AuctionWatch's search technology, consumers can search for particular products across a number of auction sites.

In September 1999, eBay asked several auction service companies to stop combing its site for listings. AuctionWatch launched its own auction search several weeks later, igniting a battle between the two companies.

eBay responded by threatening legal action against AuctionWatch and by blocking access to its site from AuctionWatch's servers. AuctionWatch later circumvented the block.

Although eBay sued and won an injunction against Bidder's Edge for providing a similar search service, the auction giant never took action against AuctionWatch.

Since then, AuctionWatch has gradually moved away from focusing on auction bidders to developing tools to help sellers list on eBay and other auction sites. Earlier this week, the company announced that it would soon release an auction management service for large-scale manufacturers and retailers. After providing its auction management services for free since its inception, the company began charging for them in March.

"Our model has continued to evolve along with the industry," said Dan Neary, chief operating officer of AuctionWatch. "Search is no longer a big focal point for us."

AuctionWatch stopped searching eBay's listings on Tuesday, Neary said.

eBay will also promote AuctionWatch to liquidators and other high-volume sellers. eBay can promote other auction management services under the deal, Sales said.

eBay will launch its preferred provider service within the next three to seven weeks, beginning with a page that will list contact information for the auction service companies that qualify for the list, Pursglove said. eBay will select companies for the page based on their technical and operating capabilities and how they handle customer service, he said. Other companies have already applied to be listed, he said.

"There have been a number of companies that came to eBay and asked us to help them list their merchandise on eBay," Pursglove said. "Clearly we're not in position to provide that service."

eBay and auction management companies such as AuctionWatch, AuctionWorks and ChannelAdvisor have been targeting such high-volume sellers in recent months, seeing them as the next wave of auction sellers. Already, companies such as, IBM and Ritz Camera are using auction management services to sell on eBay.

Under their deal, AuctionWatch agreed to license eBay's application program interface (API). eBay's API allows companies to customize their offerings for use with eBay. AuctionWatch rivals FairMarket and ChannelAdvisor, formerly GoTo auctions, have previously licensed the API.

eBay and AuctionWatch declined to give further details.

eBay has teamed with other companies in the past to provide and promote other auction services. Earlier this year, eBay agreed to offer auction appraisal services to its members. Last year, the company reached an agreement with Andale to promote its Honesty auction counters to eBay sellers.