Digital Media

eBay on Sunday confirmed that a "technical issue" had caused search queries on the auction site to be messed up over the weekend, resulting in limited or no search results. The company says that it's being cautious, though, and is holding back on some advanced search features until the issue is fully solved.

"We are happy to report that critical search functionality was restored overnight on Saturday and we are seeing normal activity levels today," a post on the company's eBay Ink blog read Sunday. "As part of our effort to restore critical search functionality as quickly as possible for sellers and for buyers, we have kept some secondary search features temporarily offline. This includes refining search by certain item specifics, such as color or clothing size, and having Store Inventory Format results included in the main search results."

In a statement, eBay also said the technical issue was caused by "a surge in live listings as sellers ramp up for the holiday season. eBay currently has more than 200 million live listings, 33 percent more than at this time a year ago."

Some eBay members still weren't satisfied with the explanation. "I had a one day auction ending today, (and) no one was obviously able to bid on it because they couldn't search for it," one commenter said on the eBay Ink blog. "Will I get a credit for this?"

"eBay should credit all sellers with active listings during this time," another said. "These issues have cost sellers many bids and sales. Once again eBay is screwing sellers."

Much like Twitter's today, outages at eBay were rather prominent in the company's early days. They're not too frequent anymore. But this one came at a time when there are some sentiments of malaise among eBay sellers, some of whom use the auction site to make a living, and when it also faces increased competition in the e-commerce sector.

An analyst release from JP Morgan Chase said that it did not anticipate the outage would have an effect on eBay's fourth-quarter earnings. But, it contained a warning: "Although we recognize it is virtually impossible for a site of this complexity to not encounter occasional issues," the report from analyst Imran Khan read, "we continue to believe that eBay needs to make greater investments in the robustness and functionality of its site in order to remain competitive within the e-commerce space."

Sold!

Auction site eBay has, as long anticipated, sold off the Skype telephony service to a group of investors that includes Marc Andreessen's new Andreessen Horowitz group, Silver Lake, and the Skype co-founders' Joltid Ltd. The investor group now holds about 70 percent of the company; eBay retains the rest in a minority stake. Joltid was brought into the investor group as part of the settlement of a copyright suit that the Skype co-founders, Janus Friis and Niklas Zennstrom, filed against eBay over Skype's technology. At one point, that dispute was looking so ugly that eBay was reportedly considering rebuilding Skype's technology altogether.

The sale amounted to approximately $1.9 billion in cash and a note from the buyer in the principal amount of $125 million, for a total of $2.025 billion.

eBay's plans to get rid of Skype, a purchase that had never fit quite well into its auction business, had been well-publicized. Last spring, the company formally announced that it planned to spin off Skype as a publicly traded company in the first half of 2010.

The final $2.75 billion valuation is only slightly higher than the $2.6 billion that eBay originally acquired Skype for in 2005.

Drew Olanoff has drawn a short straw. But he wants to make it into a long one.

He started raising money by launching Blame Drew's Cancer, which lets you accuse his pesky Hodgkin's Lymphoma of being the cause of everything that is wrong in your life.

His latest charitable poke in the eye to life's vicissitudes is to auction his Twitter name. You see, Olanoff was clever enough to declare himself to be @drew in the microblogging macroworld.

And there can be few places in the world more replete with munificent egos than Twitter.

So it is heartening that Drew Carey, a very funny man who, in real life, doesn't look like Drew Carey (he was a fellow pupil at a screenwriting course in Vegas a few years ago), has already put some large chips on Orlanoff's craps table.

He has bid $25,000 to upgrade himself from the somewhat shameful address of DrewFromTV to the rarefied air of just Drew. The Twitter Drew.

Will Drew Barrymore take on Drew Carey to become the true Drew?

(Credit: CC Csztova/Flickr)

Carey, the genial host of "The Price Is Right" has, however, vowed to up the ante. He will offer $100,000 (the money all goes to Lance Armstrong's LiveStrong Foundation) if he has more than 100,000 followers by November 9, the closing day of the auction.

At the time of writing, Carey has 24,000 followers, which is some 11,000 more than when he made his initial offer.

So which other twittering Drews might give Carey a bike ride for his money? Sports agent Drew Rosenhaus has at least as much money as ego, so surely he might bid. He already has 30,000 followers. Yes, more than Carey.

Then there's New Orleans Saints quarterback Drew Brees. He has almost 24,000 followers and, so my very fine spies in Brees's home town of Austin, Texas tell me, he is a very fine, upstanding chap.

And what about Drew Barrymore, she of only 18,000 followers? Surely she might look toward Carey, throw a little Hollywoodian tantrum, gird her finest theatrical loins and declare: "But, soft, my liege. I am the true Drew." (I always thought Barrymore should do a little Shakespeare.)

Should you be a very rich Drew, or just want to inflate the bidding, please use the #drewbid Twitter hashtag.

May the finest and most generous ego win. And may Drew Olanoff's cancer go right back to the creepy dark hole it came from.

This case could either be seen as cute or maddening.

Pipi Quinlan, New Zealand's youngest big-time online consumer.

(Credit: Rodney Times)

Sarah Quinlan, a New Zealand mom, went to take nap after having made some online bids on toys. When she came back, her 3-year-old had taken over the computer and bought a much more serious toy: a real earth mover for a cool 20,000 New Zealand dollars (about $12,300).

According to Rodney Times, Pipi Quinlan was happily clicking away on the keyboard while her parent was asleep and ended up being the winner of a Kobelco digger, a gigantic earth-moving vehicle.

Sarah had the shock of her life when she found out via e-mail which auction her account had won. She immediately called popular New Zealand auction site TradeMe, and the seller, to explain what happened. She added that her little girl was kind of a girly girl and not generally into earth movers.

TradeMe reimbursed the seller for the successful auction, and the product was relisted.

I'm pretty impressed that TradeMe resolved this matter so quickly. If it were eBay, you'd have to wait up to two weeks to get your fees back.

Lesson learned. However, don't leave your computer without locking it or at least logging off the Web site you were using.

OpenX, a software company that makes an open-source ad serving product for online publishers, has launched a platform called OpenX Market to directly connect buyers and sellers.

The model is more or less a standard ad auction format: publishers set a minimum, potential advertisers bid, and the highest bid wins. Plenty of platform-oriented start-ups are turning to the exchange or auction format to simplify and speed up the online ad buying process, but OpenX is worth a second look because of its roots in open-source software.

The OpenX software itself is free, but the platform is a way for the company to make a buck or two off it. Up till this point, the company has made money primarily off of service and consulting fees.

"Historically, the online advertising market has been fractured, opaque, hard to participate in and therefore inefficient." OpenX CEO Tim Cadogan said in a release. "In particular, mid-sized and smaller publishers lack the ability to reach a broad set of advertisers. Conversely, advertisers see lots of value in niche sites and audiences, but find it very hard to discover and buy those sites and audiences...The OpenX Market is all about making these connections simple, seamless and scalable."

The company has also issued an update to its ad server software--used by over 150,000 sites that pull in 300 billion monthly ad impressions--so that it integrates with the new OpenX Market.

eBay announced an agreement Wednesday to acquire Gmarket for a price of up to $1.2 billion, and Yahoo has agreed to sell its 10 percent stake in the South Korean e-commerce site in a move that would raise about $120 million.

Gmarket's board unanimously approved eBay's tender offer, in which the online auction and commerce site will pay a cash price of 31,767 Korean won, or $24, per share for all common shares and all American Depository Shares. eBay said it's assured of owning at least 67 percent of the company, and if it acquires all shares in the tender offer, the total price will reach about $1.2 billion.

eBay said it will combine Gmarket with its own Korean operations, the Internet Auction Co. it acquired in 2001, , though it will still use separate Web sites. "This deal creates strong operational synergies between the two market leaders, offers more opportunities for sellers and enhances our ability to serve complementary consumer segments," said John Donahoe, eBay's president and chief executive officer, in a statement.

eBay, once an e-commerce darling but now under more financial pressure, is making dramatic moves. The company plans a 2010 initial public offering to spin off Skype, its Internet telephony group.

The Gmarket offer, pending final approval by Korean antitrust authorities, would give eBay a significant new source of revenue. While its existing IAC business produced revenue of $161 million on $2.2 billion in gross merchandise sales, Gmarket produced $221 million on $3.2 billion in sales, eBay said. The company's offer is a 20 percent premium over Gmarket's closing price of $19.96.

With the recession hurting advertising revenue and Google supplying relentless competition, Yahoo is under pressure of its own. The company could announce more layoffs as it reports financial results next Tuesday, and raising $120 million could also help appease shareholders dissatisfied with Yahoo's financial condition.

eBay announced Tuesday plans to spin off its Internet phone and video-conferencing service, Skype, with an IPO in the first half of next year.

The decision comes four years after online auction giant eBay , with the plans to offer customers the ability to discuss their transactions in real-time. But over the course of the four years, eBay found its acquisition failed to provide the synergies it sought.

John Donahoe, eBay's chief executive, said in a statement:

Skype is a great stand-alone business with strong fundamentals and accelerating momentum. But it's clear that Skype has limited synergies with eBay and PayPal. We believe operating Skype as a stand-alone publicly traded company is the best path for maximizing its potential. This will give Skype the focus and resources required to continue its growth and effectively compete in online voice and video communications.

Although eBay plans to launch a Skype IPO in the first half of next year, the company noted its exact timing will be based on market conditions.

Last year, Skype generated $551 million in revenues, up 44 percent over the previous year. The number of Skype's registered users has increased to 405 million at the end of last year, up 47 percent from the previous year.

Over the past year, eBay has been weighing its options regarding Skype's fate. When the company announced Donahoe as its new CEO last spring, eBay indicated the online auction giant would take a year to evaluate the future of its online phone and video-conferencing service.

Meanwhile, reports surfaced earlier this month that Skype's founders were interested in repurchasing the company, with the aid of private equity firms KKR, Warburg Pincus, Elevation Partners, and Providence.

eBay shares rose 3.76 percent in after-hours trading on Tuesday to $14.92 a share. During the regular session, eBay closed down 1.71 percent to end the day at $14.38 a share.

Skype's founders are reportedly encountering turbulence in striking a deal with eBay to buy back the Internet phone service, despite the financial backing from a group of large private equity firms, according to The Wall Street Journal.

KKR, Warburg Pincus, Elevation Partners, and Providence are reportedly teaming up with founders Niklas Zennstrom and Janus Friis, who reportedly are interested in repurchasing their company from eBay.

But eBay and the founders' group face a wide gap on price, the Journal reported, and a deal involving the private equity firms appears unlikely.

The private equity firms are reportedly interested in kicking in $1 billion toward the total purchase price, according to the report, which noted it remained unclear on the total bid price.

Back in 2005, for $2.6 billion, asserting that it would allow customers to discuss their transactions in real-time.

eBay has since publicly stated there are few synergies between the companies and that it would be willing to sell off Skype for the right price.

eBay on Wednesday announced plans to revise its struggling marketplace unit, giving it greater focus on its core used goods auction business, rather than its retail business, the company said during its analyst day presentation.

The news apparently pleased Wall Street, which bid up eBay shares 4.7 percent Wednesday, as the company held its analyst day. eBay shares continued to rise Thursday, climbing 2.24 percent to $11.89 a share in morning trading.

With its announcement, eBay addresses one of Wall Street's long-held complaints that the e-commerce giant suffers from an identity crisis. Analysts have previously said that the company has struggled with a desire to stay true to its roots in offering used goods and collectibles through an auction process, yet has also wanted to compete in the fixed-price retail arena with the likes of Amazon.com and other online retailers.

(Credit: Yahoo Finance)

In a research note Thursday, Ben Schachter of UBS Securities said:

Management acknowledged that its Marketplaces division had fallen behind in its technological aptitude and its ability to satisfy customers. The company emphasized its plan for the division to refocus on the secondary market and develop an improved user experience for the customer.

Schachter, meanwhile, remains skeptical of eBay's forecast that it can grow its marketplace division at the same pace as the e-commerce market next year and outpace the market in 2011.

The UBS analyst added:

The company is attempting to improve its user experience by expanding efforts to include more liquidation/out-of-season products and by overhauling its search function to bring more relevant searches to the forefront.

Imran Khan, a J.P. Morgan analyst, agrees that eBay's marketplace division is a wait-and-see story.

Khan noted in his analyst report Thursday that he believes the division will continue to underperform in the e-commerce market, due to several issues:

(1) low pricing strategy by Amazon, Wal-Mart and other e-commerce sites; (2) continued expansion of selection by niche e-commerce sites and (3) the continued entrance of brick-and-mortar retailers into the e-commerce space.

Cowen & Co. analyst Jim Friedland noted in his research note that competition from not only Amazon but also Google Search is a "serious threat" to eBay's marketplace business.

Amazon and Google allow sellers to post their goods to their respective sites at a cheaper cost, noted Friedland. Sellers, for example, can upload their goods to Google's product search database for free.

He further noted:

We believe the superior buying experience on Amazon and search experience on Google reduces the value of the eBay platform for buyers and sellers. Even though eBay is dedicating significant resources to enhancing search, improving the user interface and other buyer/seller features, we believe it will be difficult for the company to catch up to Amazon.

eBay also told analysts Wednesday that it plans to double the size of its PayPal business over the next three years to approximately $100 billion to $120 billion in annual payments.