Interesting Strategy: No More Negative Feedback For eBay Buyers

Posted Jan 30, 2008

EBay Inc., the biggest Internet auction marketplace and parent company of Paypal and Skype, announced today that it is tweaking its feedback system.  EBayâ??s feedback system is when buyers and sellers give each other testimonials based on how well the transaction went.  The options are Positive, Negative, and Neutral.

Ever since eBay started its operations in 1995, buyers and sellers have been exchanging feedback since Day 1.  This is a huge change for the company.  But starting February 20, sellers will no longer be able to give buyers negative ratings.

The sellers wonâ??t be happy.  This is a loss of bargaining power for them.  

This announcement is coming shortly after eBay CEO, Meg Whitman announced her resignation and that there have been some price fluctuations.

â??When the seller leaves a negative feedback for a buyer, it drives them away from the site,â? stated Steve Grossberg, President of the Internet Merchants Association. 

As a side note, there are rumors that eBay may consider selling off Skype if the product does not meet certain performance goals this year. 

With so much happening at eBay, they seem vulnerable for other competition to step-up against them.  Google attacked Yahoo! when they were restructuring as did Facebook when Friendster was restructuring.  Amazon just reported a solid quarter so it will be interesting to see how eBay responds.

[Source: Associated Press via Yahoo!]