eBay's weekend crash may have cost merchants 80%

Shoppers searching the site for products such as Apple Inc.'s iPod got a blank page or an error message that the site was unable to run the requested search. eBay may face more disruptions as listing volumes peak during the holiday shopping season, ChannelAdvisor CEO Scot Wingo said in an interview.

eBay's search engine was down for most of the day after a worker made a change to the system, causing it to crash, said John Pluhowski, a spokesman for the San Jose, California-based company. The technical issue “resulted from a surge in live listings” ahead of the holiday season, eBay said.

“It's only going to get worse, which makes us concerned,” said Wingo, whose Morrisville, North Carolina-based company helps about 3,000 merchants sell on eBay and other sites. “This weekend showed the eBay search system is pretty fragile.”

eBay said it will refund auction fees to sellers, send 10- percent-off coupons to buyers who won auctions, and remove negative customer feedback for sellers. eBay owns a stake in ChannelAdvisor.

eBay fell 6 cents to $23.39 at 1:57 p.m. New York time on the Nasdaq Stock Market. The stock had added 68 percent this year before today.

Turnaround Plan

The outage spotlights the challenges facing Chief Executive Officer John Donahoe, who is focusing on improving the company's technology as part of a turnaround plan. The search-engine crash came days before the start of the traditional holiday shopping period.

There are about 200 million items on eBay, 33 percent more than a year ago, the company said. Million of sellers describe their products in different ways, making it hard for eBay to categorize them. The search team, led by former Microsoft Corp. executives, has made numerous changes to the site, including working to index millions of unsorted items.

Users on online forums began noticing errors early Nov. 21. By late that night, eBay said that the search engine was almost fully restored. The length of the outage was surprising given eBay's technical expertise, said Fred Moran, an analyst at Benchmark Co. in Boca Raton, Florida.

“A company as far-reaching and established on the Internet as eBay should not experience this kind of crash,” said Moran, who rates the shares “hold.” “That's the kind of difficulty you expected 10 years ago in the early days of the Internet.”

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