Yahoo Auction Closure: The Rise of Reverse Auctions?

Does the recent closure of Yahoo! Auctions means that the eBay like auction model is falling and that newcomers like are on the edge of a new buying model with reverse auctions?

Jupiter, FL, June 18, 2007 --( This day is marked by the official closure of Yahoo! US and Canada Auctions sites. After several years of service trying to compete with eBay, Yahoo! has decided to stop the chase and retire from this online auction market.

Yahoo! Auction site's homepage states "After careful consideration, we have decided to close down our Yahoo! US and Canada Auction sites to better serve our valued customers through other Yahoo! properties."

What happened to this giant marketplace of Yahoo? According to statistic, Yahoo! Auctions were receiving less than 1% traffic compared to eBay auction site. Some said that Yahoo! closed its auction site shortly after becoming the exclusive PPC ad’s provider for eBay.

However, Sylvain Reiter, VP of, takes another direction to explain the closure: “eBay has grown tremendously and taken over most of the online auction business in the western countries. I think that Yahoo! realized there were not much room to compete with eBay and didn’t see any future growth in this market. The business model of eBay-like online auctions is reaching its limits and people start to understand the benefits of reverse auctions”.

Reverse auctions are not competing with online auctions but are following the opposite model: one buyer posts an order for an item he wants to buy. Sellers are becoming the bidders and reduce their bids to win the sale. Thanks to the competition between sellers, the buyer ends up saving money. provides a reverse online auction service for all categories of products, as wide as Yahoo! or eBay auctions. Launched in 2005, it is now offering all the services of regular auctions, plus the benefits of being in control and saving money to the buyer on a “no savings – no fee” basis.

Sellers receive free leads and bid the price they are ready to sell item for. is currently available worldwide with a unique US based marketplace and is currently expanding its activity to dedicate a platform for the European users.

We can assume that Yahoo! is giving up on the US market now trying to focus on the Asian market. After paying $1 billion last year to acquire 40% of Alibaba, Yahoo! wants to become the “eBay of Asia”. But the economy is growing globally, more and more sellers are competing to sell similar items and reverse auctions are the only viable model for the future of trading business.

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Oltiby Inc
Sylvain Reiter
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