Yahoo! auction users going, going, gone

Yahoo! has lost up to 90 per cent of its US auction listings after introducing a fee-based service in January.

According to estimates from Merrill Lynch, daily auctions on the US Yahoo! site have dropped from two million a day to 200,000 since the fee was introduced. Worldwide, there were up to four million auctions a day prior to the introduction of the fee. Merrill Lynch had expected the fee-based auction service to generate annual revenue of $16 to $30m. However, after the drop in listings, annual revenue forecasts have now been recalculated at $6 to $10m. About 90 per cent of Yahoo's revenue is made from online advertising. The service fee of between 25 cents and $2.25 was the company's first attempt at generating money from its 55 million users.