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eBay applies pressure to AuctionWatch

The online auction leader is racheting up its tensions with AuctionWatch by sending the company a formal letter asking it to stay off its turf.

eBay racheted up its tensions with AuctionWatch today by sending the company a formal letter asking it to stay off its turf.

As earlier reported, the dispute between eBay and AuctionWatch centers on AuctionWatch's search engine--launched about two weeks ago--which culls auction listings from eBay's site, among others. Earlier this week, eBay gave the company a verbal warning to stop pulling content from its listings.

AuctionWatch spokeswoman Kamini Ramani said the company's lawyers were reviewing the letter. Despite possible legal threats, she said AuctionWatch planned to stand its ground and continue searching eBay's site.

"Our position remains unchanged," Ramani said.

The letter is part of a broader initiative against other online auction services that has left industry observers questioning eBay's motives--and the legal basis of its complaints.

AuctionWatch's search engine is similar to others offered by companies such as Bidder's Edge. The technology allows users to search for products across a variety of auction sites, including those offered by Yahoo, Amazon.com, and MSN. With the search results, users can compare prices, find out how much time is left in the auctions, and how many bids have been placed.

Early last month eBay contacted Bidder's Edge and a number of other sites demanding that they stop searching eBay--and most complied. But AuctionWatch representatives said they pressed forward with its search engine because its users demanded the service.

But eBay says it opposes the search engines because the technology slows site performance, and the search results are often inaccurate or incomplete. Also, the search engines violate the company's intellectual property and constitute a violation of its recently updated user agreement.

No matter what eBay's argument uses against the search services, attorney Rich Gray of Outside General Counsel of Silicon Valley said the company has little legal ground to stand on. Facts such as the price of an item and how much time is left in an auction can't be copyrighted.

eBay spokesman Kevin Pursglove said the company didn't specify its opposition in its letter.

"We are simply declaring to them that we frown upon what they are doing and request to them to stop doing it," Pursglove said.

Both eBay and AuctionWatch declined to share the contents of the letter with CNET News.com.

In separate news today, eBay announced that AboveNet Communications will be helping to manage the company's back-end systems. Pursglove said AboveNet will work together with Exodus Communications, with whom eBay already has a contract, to manage the company's Web servers, database servers, and Internet routers.

"This deals with scalability issues," Pursglove said. "It allow us to continue to expand."