Penny Auctions Under Siege

Last night BidRodeo informed us hackers were attacking their site. This is the second time in about a week BidRodeo has experienced a cyber attack according to BidRodeo's Weronika Cybulska. Apparently there have been no interruptions to bidding this time, however during the last attack on September 8th, the site experienced delays. During that outage Bidrodeo honored all ended auctions and also refunded all bids to losing bidders, Cybulska said.

Penny Auction Watch also reported that Rocky Bid was under attack about a week ago. All of the attacks appear to be denial-of-service (DOS) attacks where hackers flood a target's servers with so many requests for information that most or all of the server's bandwidth is consumed. During a DOS attack legitimate users either cannot access the target site or experience a dramatically slower connection. If anyone tried to read the Michael Jackson death story on the LA Times or New York Times websites in the first 30 minutes after the news broke, you know what it feels like to try to access content on a site that is overloaded with requests for data. The good news is that these penny auction site hackers are not trying to steal personal information, just temporarily disrupt access to the site.

DOS attacks are fairly common and Google, Facebook and Twitter have all recently been attacked. Twitter, which is notoriously cheap on bandwidth, was down for hours after the attack while Google experienced only minor interruptions.

Cybulska said she didn't know why BidRodeo was being attacked, but suspected it might be a user who is trying to eliminate the competition in order to win an item on the cheap. It might also be a competing site trying to get users to defect.

Penny Auction Insider will continue to report on DOS attacks to penny auction sites and provide updates when sites are under attack.

Steven Seagal was unavailable for comment on this article.
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Penny Auction Traffic Data for August

Compete.com's monthly traffic scores for August are out. Below is a graph of the top 39 penny auction sites by unique monthly traffic. We see that Swoopo and Bidcactus are far ahead of the competition and that the distribution of sites follows a long tail pattern. So does this fit the Chris Anderson "selling less of more" philosophy of ecommerce 2.0? No, not really, more of a coincidence I think.

One of my friends made an interesting point when I showed him this chart. What if Swoopo owns Bidcactus, he asked. While we have absolutely no reason to believe this is true, it does make for interesting dinner table conversation. What if, in order to dominate the market Swoopo opened a second site, which happens to have a very similar color scheme and aesthetic, and funded that site from their own operations. Bidcactus does spend a huge amount of money on AdWords, after all.

Either way, I think I'm going to start calling Swoopo "Coke" and Bidcactus "Pepsi." The Dr. Pepper Snapple Group of the group has yet to be decided but there are a few strong contenders including BidRodeo and Rocky Bid as well as newcomers For10Cents.com and Winners24. This is actually the first time I've visited Winners24 and their site looks pretty clean.


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"Our food is dreadful, so there's never a line!"

I've never seen an restaurant advertising that way and don't expect to. BidRodeo is now running Google ad saying that they're less popular than their competitors.

It isn't completely absurd. In any auction, the fewer the bidders, the better the deal, and you can't blame BidRodeo for making a virtue of necessity. But consider:

• First, most people who participate in auctions don't realize that they're better off with fewer competitors. Seriously. They seem to think that the presence of a lot of other bidders just means the auction must be a really good idea. The technical term used by behavioral researcher for the victims of this crippling cognitive deficit is "stupid". Lot of people are stupid. (The foregoing does not apply, of course, to readers of this blog, who are not only clever and perceptive, but also very good-looking and charming.)
• People who are sharp enough to understand that less competition leads to lower auction prices are probably also sharp enough to understand it doesn't matter how busy the site is, just how popular the specific auction is. They also understand that if BidRodeo isn't popular, there might be a very good reason, and they'll go to a popular site that also has lots of auctions, some of which are likely to therefore be sparsely attended.
• And what is BidRodeo's long term plan here? Their "visit BidRodeo because no one else is" strategy will either fail, and they'll go out of business, or it will succeed and lots of people will visit BidRodeo and then ... what? They'll change their ads to read "remember how we said you shouldn't go to busy auction sites? Well, forget that, come to our site!" ?
• Finally, what is BidRodeo telling its investors? That low site traffic was the plan? That it's a key business strategy?

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Then again, BidRodeo isn't a fan of RockyBid either

I think this trashing of the competition on Google paid keywords could get ugly. Let's hope it does. For now, BidRodeo appears to be the only site paying to post negative advertisements next to Google searches for its competitors. But with new penny auctions cropping up all the time and the established brands fighting for market share, I expect we could see some more aggressive marketing in the near future. We'll keep you posted, and if you see something funny, please let us know in the comments section.
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Cut to the chase marketing

Our friends over at BidRodeo.com have an important message for would-be BidCactus penny auction players, "Don't bid on BidCactus." Very funny.
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