We're about to turn the clocks back; for some of us, the air's getting chilly and the trees are starting to turn; and many budget-conscious shoppers know that now's the time to start hacking away at holiday gift lists. Unfortunately for some, eBay (Nasdaq: EBAY) hasn't been cooperating for a few days.
News agencies reported today that PayPal, the company's online payment arm, is having intermittent outages, and these outages have been occurring on and off since Friday. (Apparently, the outages are not due to hackers, in case you were wondering.) For affected users, the glitches are having a domino effect that's pretty obvious. The auction process is slowed when some users can't pay, or when payment can't be verified, and shipments are delayed for those who use PayPal's shipping functions.
It's arguable that PayPal has been a key element of eBay's success, helping to launch the company ever higher by giving its auction-hungry customers a way to work on a more immediate, cash basis. Last I checked (when eBay launched PayPal in France), the company said that one in three U.S. online users had a PayPal account for use in Internet transactions.
Although eBay says it has technicians working furiously on fixing the glitches (as well they should), it's a strange moment for this mighty force in e-commerce. There are plenty of rivals that offer auctions and would love to get their hands on some defecting auction customers, such as Amazon.com (Nasdaq: AMZN) and Yahoo! (Nasdaq: YHOO), neither of which were ever able to break into auctions to the extent that eBay ruled the market.
Of course, tons of Internet heavies are also looking to lure bargain hunters, regardless of auctions. Google (Nasdaq: GOOG) has Froogle, Time Warner's (NYSE: TWX) America Online has its recently launched inStore area, and Yahoo! offers its own shopping hub.
There's little that can kill eBay, though longtime Fool contributor Rick Munarriz mused on the idea recently. However, execution of the service has rarely been at issue, either. While it's hard to imagine that these recent glitches could be anything more than an unpleasant and brief fluke, any extended reliability issues could take some wind out of eBay's sales. Especially on the cusp of a shopping season that may have eBay's name written all over it, considering some indications that consumers may return to ultra-bargain-hunting mode for the holidays.
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Alyce Lomax does not own shares of any of the companies mentioned. Despite being a big fan of online commerce, she has never participated in an eBay auction.
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