Friday Fun Link – The Crack Cocaine of Auction Sites (July 10, 2009)

This article talks about a new auction site called Swoopo.com which is apparently super-addictive.  The gimmick is that the site is sort of like a cross between an auction, a lottery and those “you only pay $0.25/call to vote for your American Idol.  Er, vote as many times as you'd like!” deals.

Every item up for bid starts at one penny and every bid increases the final price of the item by one penny.  Sounds good except you pay sixty cents for each bid that you make.  So when they have a MacBook go for $35.00 that actually means they've had 3500 bids and the site has netted over two grand.  Plus each auction doesn't expire until no one else is willing to bid one more time so the auctions could go on forever.  Then, at the end, only one person gets a wicked deal but lots of people blew a whackload of cash trying to win the auction, sixty cents at a time.  (The article gets a bit into the psychology of why this works – quite similar to slot machines in many respects.) 

Anyhow, check it out if you're curious – but don't say I didn't warn you! 

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