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Yahoo to Charge for Auctions

[SOUTH AFRICA] Yahoo saw in the New Year by announcing that it would start charging a non-refundable insertion fee for items submitted for auction on its Yahoo Auction site. The new policy will go into effect on January 10.

The portal also said it would no longer allow the sale of items which promote hate and violence, such as Nazi or racist material.

Selling items on Yahoo will now cost from US $0.20 to US $1.50, depending on what starting price is asked for the item. Those sellers wishing to set a reserve price will also be charged a reserve fee, fully refunded if the reserve price is met, either US $0.40 or US $0.75.

There are also additional fees that sellers may choose to incur, specifically a 'gift icon' (identifying the item as a good gift) for US $0.50, bold text listing and featured listing, where the more you pay per day (starting at a minimum of US $0.10) the higher up in your selected category your item will be listed.

By comparison, eBay charges an insertion fee ranging from US $0.25 to US $2.00 and a reserve fee of either US $0.50 or US 1.00, depending on price. In addition, eBay charges a final value fee for sales: 5% of the first US $25, 2,5% of the remaining value up to US $1000 and 1,25% of the remaining closing balance above that.

So while it may no longer be free, Yahoo Auctions is still priced cheaper than its biggest competitor -hopefully placating users angry at the new policy.

The move is inevitable, given the pressure Yahoo is under to start generating revenue from sources other than advertising. Even with online advertising spending predicted to grow to US $43 Billion by 2005, the advertising-only revenue model is being criticized as unsustainable.

If Yahoo can get its massive user base to pay for some services, it won't need advertising revenue to make a tidy profit. First it has to convince us to pay up, though.