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eBay OKs first outside search service

Auction Rover becomes the first company authorized to search eBay auctions -- the latest twist as eBay continues to block outsiders from peering in.
Written by Elliot Zaret, Contributor
The saga of eBay's battle against auction search sites took a new twist Tuesday as the auction giant forged a licensing agreement with Auction Rover. The deal - which makes Auction Rover the first auction search sanctioned by eBay - allows the month-old portal to include eBay auctions in its searches - but only in a separate search from all other auctions, and listed under a specially branded eBay tab.

It's just the latest turn in a 10-week story that has left eBay (Nasdaq: EBAY) pitted against as many as 30 auction portals trying to include its auctions in their results, and the first alliance eBay has forged with any of its would-be adversaries.

The story so far: eBay's vast success in person-to-person auctions over the Internet caused many companies - like Yahoo! and Amazon - to get into the auction business as well. As the number of sites offering auctions grew, a cottage industry of "auction portals" emerged. These companies allow users to search for an item across numerous auction sites, much the way portals search across the Internet.

But in September, eBay told them to stop searching its auctions. The auction portals, eBay maintains, are stealing its information and straining its servers. At first the sites complied, but in October Auction Watch, and later Bidder's Edge, decided to fight the edict and resumed listing eBay auctions. EBay negotiated with the companies, but when talks with Auction Watch stalled in early November, eBay pulled the plug on it, blocking access from the portal's servers.

The exact terms of eBay's deal with Auction Rover were not disclosed by either company. But the deal basically allows Auction Rover to search and list eBay auctions as long as the results are separated from other auction listings, and as long as Auction Rover doesn't "spider" eBay's site - that is, repeatedly search all 3 million eBay listings at regular intervals throughout the day. EBay has said in the past that spidering its information places a strain on its servers and doesn't provide the most up to date information.

Two choices
Auction Rover's site now has two tabs: one for "Global Auctions" and one marked with eBay's logo. Neither company would say whether eBay paid to have its logo displayed.

"Obviously that's pretty valuable real estate," said Scot Wingo, Auction Rover CEO and co-founder. "We think there's a lot of upside for us or we wouldn't have made the deal."

Of course, the deal may have serendipitously given Auction Rover a new revenue stream. Though the two-tabbed search was only up for less than a day, Wingo said he was approached by other companies that wanted to know whether they could purchase a tab with their logo on it.

EBay director of corporate communications Kevin Pursglove said that he is glad the companies were able to forge a deal.

"We're very pleased. We think they approached this in a very level-headed fashion," said Pursglove. "We certainly hope that other companies recognize our concerns and our concerns have always been to protect our business interests."

Other portals cautious
Bidder's Edge is still negotiating with eBay, but CEO James Carney said "we haven't finalized whether or not we'll come to an agreement."

Carney said that Auction Rover's two-tiered search doesn't provide the best experience for users..

"On one hand eBay is there, but it's more like they're half there," said Carney. "It's very clear eBay wants itself separate from everything else, but does that make sense for a user? ... My first concern is with user experience because ultimately if people don't use sites like Bidder's Edge or whatever, it doesn't matter."

Meanwhile, Auction Watch has created a technological workaround to eBay's block - making the search look like it's coming from the individual user's computer rather than from Auction Watch servers, making it impossible for eBay to shut out the search. It already launched a version of its search that lists eBay items in a separate window, and plans to launch a new version with integrated search results within a couple weeks, said company CEO Rodrigo Sales.

Pursglove said eBay is already looking for ways to block the new version of Auction Watch's search.

Sales was critical of Auction Rover's decision to sign the agreement, which he said sounded a lot like the one he refused to sign. Pursglove confirmed the two agreements were very similar.

Doesn't directly compare
The multi-tabbed search that Auction Rover has implemented doesn't allow users to directly compare items from eBay and items from the other auctions, Sales said.

"It's unfortunate that Auction Rover was forced to sign a license agreement that allows them to do something that isn't even integrated," said Sales.

Sales said he also is concerned that Auction Rover has implicitly agreed with eBay's contention that items listed on its site are proprietary information. Sales, and others, maintain that the individual items are public information.

"I'm concerned about the precedents it may set in the industry," said Sales. "It puts Auction Rover in a tough situation. By signing the agreement its like they acknowledge that they need a license."

But Wingo said they've done no such thing. They merely were trying to get their users the most comprehensive auction listings they could.

"There's the legal aspect of this, but we're not lawyers; we're here to create an online resource site," said Wingo. "This is really more of a marketing thing than a licensing agreement."




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