EarthLink yesterday listed its $19.95 unlimited Net access offer on eBay as if users could bid for the service. But the ISP appeared to be turning to eBay as an inexpensive way to advertise rather than participating in a person-to-person auction. eBay's site is among the most heavily visited on the Web, making it an ideal advertising venue.
"That's what's nice about eBay: If you sell something there, it's a nominal fee," said EarthLink spokesman Arley Baker. The biggest challenge faced by ISPs is acquiring new subscribers at a low cost. According to Baker, EarthLink typically pays $80 to $120 in marketing expenses to sign up a new customer--far more than the auction transaction fee that eBay would charge.
But the plan is raising questions both at eBay and within the industry. "If it's not in the true spirit of being a bid item, then eBay would want to further examine this," said eBay spokesman Kevin Pursglove.
The foundation of eBay's financial success is its user base, which trades feverishly and chats endlessly about everything from their hometowns to eBay trading experiences. ebay's own Web site makes it clear that "Individuals--not big businesses--use eBay to buy and sell items in more than 1,000 categories?Users can find the unique and the interesting on eBay."
At least one industry watcher says the listing is little more than an ad and dilutes the community spirit of the personal auction site.
"This sets a bad precedent," said Mark Dodd, who runs AuctionWatch, a site that includes news, information and message boards about online auctions. "If they leave (the EarthLink listing), it blurs the line between an advertising venue and an auction environment."
EarthLink's action amused some Netizens. "Who among us wants to volunteer to explain to EarthLink what a Dutch Auction is?" one user asked on a message board.
In its eBay listing, EarthLink offered the first month of service free (it charges $19.95 per month after that), a waiver of the $25 set-up fee, and a $50 check if the user stays with the ISP for at least two more months. By clicking on a link in the listing, potential EarthLink customers are whisked to the ISP's site to sign up.
If eBay customers actually tried to bid for the ISP offer, they could wind up paying more than $19.95, because eBay's system automatically sets a minimum bid increment of 50 cents for all auctions.
Baker said EarthLink informed eBay about its plans before posting the listings. "The answer was, 'If grandma in Kansas City can sell something on eBay, there's no reason why EarthLink can't," he said.
EarthLink initially tried to list its Net access offer in a Dutch auction, in which a seller offers multiple, identical items at a minimum bid price. But to list an item in a Dutch auction on eBay, the seller must have been an eBay member for at least 60 days. EarthLink didn't want to wait, so it chose to use the regular auction format.