Problems pull down Andale

After a three-day delay in launching "Freedom," its new auction management software, Andale has battled bugs with the new program ever since. Meanwhile, some of the Mountain View, Calif.-based company's customers are starting to tell Andale that Freedom can wait.

"It's kind of all gone to hell in a hand basket," said Linda, an Andale customer who declined to give her last name. "It scares me the way the thing is falling down in pieces around their ears and they really don't seem to have a handle on it."

Andale delayed the launch of the new software to be sure it was ready, said Munjal Shah, the company's chief executive. But since the launch, the company has encountered a number of issues that have slowed the performance of the software and made it appear to be unavailable to users, he said. Although the company's staff is working "round the clock" to fix the problems, Andale has not yet found their root causes and doesn't know when all the issues will be resolved, he said.

"We made a lot of changes and lot of improvements. In that process, some issues were introduced that we have to work through now," Shah said. "I find (the problems) unacceptable and really wish that we didn't have this to begin with.

"We will find some way to make good with our users."

Andale announced its new "Freedom" software to much fanfare last month. The company touted the software as the next evolution in auction services, allowing sellers to manage listings not just on auction sites such as eBay, but on their own Web site and on fixed-price storefronts such as Yahoo's stores.

As part of the launch, which was originally scheduled for July 4, the company integrated data from Honesty.com into its main Andale.com Web site. Andale bought Honesty.com and its popular auction counters last year.

The merging of the two sites has caused at least some of the performance issues on Andale, Shah said.

"There are some 40,000 to 50,000 billable customers," he said. "It always presents a big challenge putting that together."

Andale competitors AuctionWatch, AuctionWorks and ChannelAdvisor said they had picked up customers as a result of Andale's problems. ChannelAdvisor, formerly GoTo Auctions, even launched a "Freedom from Freedom" promotion for Andale sellers, offering a 30-day trial period of its ChannelFusion software or $30 off a year-long subscription.

"We really have done this as a service to these folks," said Scot Wingo, president and chief executive of ChannelFusion. "They are losing money hand over fist and need a new home."

Wingo said his company has picked up about 200 new customers as a result of the promotion.

Meanwhile, AuctionWatch has seen a big pick up in registrations of new customers since Andale's release, said Mike Effle, the company's vice president of strategy. Registration for its high-end service is up 250 percent in the days after Freedom's launch compared with the days preceding it.

"We're not trying not to bash anyone, but we're thrilled," Effle said. "We love seeing people come over and use our services."

Despite the apparent loss of customers, Andale is not out of the auction service game, said Whit Andrews, e-commerce analyst for Gartner.

"Handled poorly, (problems such as Andale's) can damage or destroy a company's long-term customer relationships," Andrews said. "But the long-term success of AOL and eBay, despite what at the time appeared to be catastrophic outages, is proof of the fact that an outage does not always trump a strong application, customer relationships or market dominance."

And some Andale customers say they will stick with the company, despite the problems.

Chris Langley, owner of Greenville, N.C.-based Global Golf Exchange, said his employees were unable to use Freedom to upload ads to eBay in the days immediately following the program's launch.

"Basically we were out of business for a few days," Langley said.

But Andale has been working with him since the launch to fix the problems and they now seem to resolved, Langley said, adding that he never thought of switching to another company.

"Anybody would have had those problems," he said. "They stepped up in a big way. They made us feel important. They made us feel like we were valued customers."