So eBay has removed the ability to leave negative feedback, finding themselves unable to manage abuse of this feature. IMHO really bad idea. I’ve already written about how not opening up their reputation system to the web was a huge missed opportunity. Now they are further kneecapping one of their largest assets.
How will negative transactions be dealt with? By direct conversation with customer service reps, meaning this data is now walled within a customer management system and not part of the internet ecosystem. They are shrinking back to a core business of onsite transactions (return to fundamentals?) but the larger play – reputation and transaction system for all web-based peer-to-peer transactions – remains the more interesting growth engine to me.
Since my platform post today was well-received, wanted to revisit an old question that I’ve never gotten a good answer to – why didn’t eBay/Paypal tie their reputation system closer to their payment infrastructure.
Update II 1/3/12:
Here’s one I’ve wrestled with for several years: I wish someone would explain to me why eBay never opened their ratings system (which is still the most complete reputation database on the Internet). By keeping it closed they surely drove value to their auction business but imagine if it was the web standard for identity? A eBay ratings + Paypal combination basically means you have reputation+transaction bundled together.
Everywhere that payments occur, especially person-to-person, eBay could be entrenched. And where better to roll this out first than Craiglist (where they are of course a minority owner). Plus they could continue to capture higher than minimum transaction charges from their partner sites because they would be accelerating commerce by creating trust. What a competitive advantage!
But instead we still lack a global reputation db despite noble attempts from web startups.
Was it that some VP at eBay just couldn’t make the call? Or am i missing a risk factor? Sure, an API would open it up to spam but signal detection and filtering can’t be that hard – i mean surely no harder than Paypal’s elite fraud detection?
On eBay the answer is 8.1% (the premium a known seller commands over an unknown one according to this UMich study).