Saturday, May 12, 2007

Yahoo shuts down auction site

Yahoo has announced that it will be shutting down its online auction site. The site has not been able to keep up with eBay, which brought in 60 million visitors in March compared to 330,000 visitors at Yahoo's auction site. Is really anyone going to be able to compete with eBay? It seems rather doubtful.
Why did Yahoo's site fail? Yahoo didn't have enough users to make its service valuable enough to keep drawing new users to its site. It was another example how failing to achieve a network effect can spell doom for an Internet site. This is one of the main reasons why Internet startups fail.

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