AOL is developing a marketplace that will allow sellers to list items for a commission fee, veering into eBay's turf, according to The Wall Street Journal. The reason? AOL's advertising revenues are in decline, while eBay revenues, comprised in large part of "final value fees," continue to increase.
AOL has a long-standing marketing agreement with eBay, which offers sellers a venue for selling items for a fixed fee in addition to its auction format. AOL's existing shopping service (Shop@AOL) charges merchants "rent" with no sales commissions. Its ClassifiedPlus service offers members up to 20 free classified ads in most categories and are seen across AOL, AOL.com, CompuServe, Digital City and Netscape properties.
The Journal said America Online executives have begun courting a number of eBay's largest sellers for its new fixed-price marketplace. It also reported that AOL will license Collector Online software to enable AOL sellers to list large volumes onto its marketplace. Last year, Collector Online, a OneMade Inc. company, announced a marketing agreement with America Online (AOL) for members to incorporate their existing showcases into the Classifieds section of AOL.
Collector Online is an eBay Preferred Solution Provider, and its software allows sellers to list items on eBay going through its API (Application Programming Interface). There was no mention if AOL had an API in place and whether Collector Online software needed modification to work with AOL's marketplace.
Earlier this week, an analyst at RBC Capital Markets downgraded eBay's stock over concerns that large sellers were finding that "eBay does not operate well as a vehicle to sell large volumes of the same product" and were looking to expand into other online marketplaces.
Wes Riggins, who is responsible for AOL's ClassfiedPlus business, attended ChannelAdvisor's Strategy Summit held last week for top eBay sellers. Representatives from eBay, uBid, Amazon Marketplace and Yahoo Auctions spoke at the event.
AOL may be anticipating an end to its marketing agreement with eBay. The auction giant amended its marketing agreement with AOL Time Warner in May, giving itself the option of not renewing in 2003 and 2004 if AOL does not meet certain performance goals. AOL is eBay's exclusive advertising sales representative.
