eBay Apologizes?

On Thursday, PayPal users got a treat when parent company eBay (Nasdaq: EBAY  ) agreed to waive the transaction fees on the online payment service for North American customers all day long.

While PayPal's "Thank You Day" was reported by many as a way for eBay to make amends for its site's extended outage over last month's Columbus Day holiday weekend, why is it that I'm not buying it as an apology?

While I list items on eBay sporadically throughout the year, I tend to go hog wild when December rolls around. That's because for the last few years, during the last week of December eBay has set aside a day to provide free listings. The timing is perfect as it's a great way for folks to unload that holiday gift that didn't quite hit the spot or for cash-strapped Santas to raise some funds to pay off that next credit card bill.

Granted, a day of free listings isn't the same as what PayPal did last week, as auctioneers on eBay's namesake site would still be liable for transaction fees on any auctions that were successfully completed. I get that. However, what everyone is reporting as an apology, to me, appears to be effective marketing.

With 56.7 million accounts -- and growing -- PayPal is the top dog in online micropayments the same way that Motley Fool Stock Advisor recommendation eBay reigns supreme over the auction space. A one-day reprieve isn't going to rough up its income statement. If anything, it will simply spur some free publicity.

While some who may have suffered through the days of PayPal's outage due to its ill-advised software upgrade may disagree with me, I don't think that PayPal needed to necessarily extend last week's alleged olive branch. I mean, consider the alternatives, and perhaps it's the customers who should be grateful that PayPal is still around.

This month, Yahoo! (Nasdaq: YHOO  ) will be closing down its PayDirect service for the same reason that Citigroup (NYSE: C  ) offed c2it last year and eBay abandoned its own Billpoint venture with Wells Fargo (NYSE: WFC  ) in favor of acquiring PayPal. In short, it's no fun going up against a market-thumping gorilla.

And, call me nuts, but I've never heard a gorilla apologize.

Were you affected by PayPal's outage last month? Did you take advantage of the free transactions day? Are you an international PayPal customer upset that eBay didn't take its alleged PayPal apology overseas? All this and more -- in the eBay Discussion Board. Only on Fool.com.

Longtime Fool contributor Rick Munarriz is a satisfied eBay user, but he has never bought the stock. He doesn't own shares in any of the companies mentioned in this story.


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  • Report this Comment On February 28, 2008, at 1:52 AM, lijithmg wrote:

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