No More Auctions Of Digital Goods on eBay… But Why?

eBay has been clearly been struggling to stay afloat in the era of the social web, and even more so in the last 2-3 years as it has lost half of its value. Its effort to go social however, with eBay Neighborhoods, is mediocre at best, and the company's decision to do away with the positive/negative feedback structure was absolutely ridiculous.

This latest move, however, seems to actually make since and could actually ease the searching process for its millions of users who are searching for tangible items.

In a policy update that went into effect on March 31, 2008, digital goods can no longer be listed or sold through the service's traditional auction-style or fixed price formats. This new ban will affect “anything that is “shipped” to a customer via email or download link,” according to eBay, including eBooks, MP3 files, and PDF files. Instead, all digital downloadable goods must be listed using the Classified Ad listing format, which provides sellers with a fixed price 30-day ad.

“Digital goods are often reproduced at little to no cost to the seller. On eBay, this creates the potential for Feedback Manipulation (both real and perceived),” stated Brian Burke, eBay's Director of global feedback policy in a recent general announcement. “To preserve the integrity of the Feedback system, effective March 31 all goods that can be digitally downloaded or transferred electronically must be listed using the Classified Ads format.”

Feedback manipulation? That seems like an odd primary reason to make the policy change. Since buyers no longer have the option of leaving negative feedback for deadbeat sellers, does a seller's feedback rating even matter anymore to buyers. I have been a user of eBay since the early days, and from my own experiences, most of the big sellers who actually sell tangible items do not sell digital goods. Those who do sell digital goods tend to only offer digital items. So where exactly is the feedback manipulation in that? There are plenty of wholesalers on eBay who have multiple listings of the same tangible item because they received them in bulk. Does that also qualify as feedback manipulation?

I'm not trying to rain on eBay's parade, because this actually is a good move, but they could have come up with better reasoning. Say it's for the users who are getting tired of seeing more $1.99 listings for eBooks than actual products in an eBay search. What made eBay so popular is the fact that it provided a way for consumers to seek rare, out-of-production, or used items at an exceptional bargain without having to look everywhere. Perhaps the executives should try to get back closer to this original focus.