EBay Says It Will Raise Listing Fees to Make Improvements

EBay Inc., the world’s largest Internet auctioneer, is raising the listing fees it charges sellers using its U.S. sites and is making changes to fee structures in 10 other countries to fund improvements.

The U.S. fee increases will take effect in February and already are included in the company’s 2004 sales forecast, said Hani Durzy, a spokesman for San Jose-based EBay. The increases will run as much as 45% for the highest-priced auction items. Most fees will rise by 9.1%.

EBay, which also has revenue from sales commissions and its PayPal Inc. online payment service, will use the increases to further develop its marketplace, Durzy said.

EBay, which last raised listing fees in January 2001, also is adding new tiers to the pricing structure. The fees appear to be designed to get sellers to list with lower starting bids, said Pacific Crest Securities analyst Steve Weinstein.

“They are pretty thoughtful increases,” Weinstein said. Sellers may opt to avoid higher fees and list items at lower opening prices, which should attract more bidding, he said.

Rosalinda Baldwin, a seller who has criticized past EBay fee increases, said the new increases may erase profit for some sellers.

“This is a significant enough increase to cut into their margin,” Baldwin said.

She said people who relist unsold items would be among the most affected.

Also on Monday, EBay and Tumbleweed Communications Corp. agreed to settle a patent lawsuit covering methods of sending documents over the Web.

Tumbleweed, a Web security company based in Redwood City, Calif., filed the patent- infringement lawsuit in May 2002 against PayPal. EBay was added to the suit later that year, after buying PayPal for about $1.5 billion.

The companies agreed to dismiss the lawsuit, including counterclaims filed by PayPal, and enter into a cross-licensing agreement. James Hannon, a spokesman for Tumbleweed, and Amanda Pires, a spokeswoman for PayPal, declined to comment further on terms of the settlement.

“With this lawsuit behind us, we look forward to working with Tumbleweed and others in the industry to develop effective e-mail security solutions,” Howard Schmidt, EBay’s chief information security officer, said in a statement.

The patents at issue cover methods for tracking electronic documents and linking to private Web addresses.

Tumbleweed has sued and settled similar infringement suits with Hallmark Cards Inc., American Greetings Corp. and rival software maker Critical Path Inc.

Shares of Tumbleweed rose 49 cents on Monday to close at $8.45 while shares of EBay rose $1.62 to $64.62, both in Nasdaq trading.