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Yahoo Cuts Auction Fees

Yahoo has taken a novel approach to undercutting auction rival eBay's business: It's eliminated fees for customers using its U.S.-based auction Web site.

The search giant said this week it is waiving listing fees, which cost sellers between 5 cents and 75 cents per listing. It also erased transaction fees of 2 percent of the final value of items sold on its site. Moreover, it's eliminating the additional 1.5 percent fee for more expensive items.

"We want to get as many product listings into the marketplace as possible," Rob Solomon, vice president and general manager of Yahoo's shopping and auction sites, said.

The move does not apply to auctions in Canada and Asia.

With the new business model, Yahoo is likely hoping to challenge eBay and other Internet retailers such as Amazon.com and Overstock.com, which continue to charge fees for listing items on their sites.

The Sunnyvale, Calif.-based company said it will continue to generate revenue from its U.S. auctions by continuing to run paid search listings from its Yahoo Search Marketing division, said Solomon.

Yahoo, facing increased competition in the online shopping realm after eBay announced last week that it was buying Shopping.com, denies the timing of the move had anything to do with eBay.

Solomon said the move was simply part of the company's overall strategy.

"The more searches and the more pages, the better the business model," he said.

Yahoo said it does not intend to eliminate the fees it charges users on its other auction sites.