Now the world online auction leader, eBay, has announced some moves of its own, stating that it will now allow outside software to work inside its site.  The new drive is dubbed Project Echo and aims to encourage a new independent developer community, which develop software utilities to be featured in eBay's core site.  The move was announced at an annual conference in Chicago.

Developers will design third party applications which will exchange data with eBay's Selling Manager, the coordinating center of the sales of eBay's over 700,000 active sellers.  Max Mancini, eBay's senior director of Platform and Disruptive Innovation states, "We are opening up the eBay site to help developers and sellers make more money, which is what this is all about."

While MySpace may have gone more open sooner than Facebook, Facebook is the leader in independent development efforts, with over 24,000 independently developed apps.  This success is the kind that eBay hopes to foster with its new program.  Mancini states, "Rather than having eBay try to build every feature, we should open up the platform and integrate others' work.  We have realized that we need to allow sellers and developers to get together a little bit more easily.”

EBay is hoping that its sellers will turn developers and make the kind of apps that they themselves would use.  It will screen the applications for quality and security.  It will then sell the applications to its sellers, while give a cut of the proceeds to the developers.

Among the data available to developers to use now are available inventory, latest bids, and completed sales.  While Project Echo focuses on sellers, some developers may elect to market to eBay's buyers as well.  However, first and foremost, the new apps aim to eliminate headaches for sellers, such as accounting and customer service.  Says Macini, "Our philosophy is to help sellers manage their businesses, not just businesses on eBay."

The program is off to a strong start with 70,000 developers onboard.  Currently about a quarter of eBay listings are auto-generated by programs, which currently face more complex routing hurdles.  Some 12,000 applications account for these listings.

The new program will debut to select sellers late in 2008, but will not be fully rolled out until early 2009, to prevent holiday season disruptions.  Analysts are showing eBay some love for its new tactics.  Stifel Nicolaus analyst Scott Devitt lauds, "EBay is forcing sellers to treat buyers better.  (It) is making positive progress in its efforts to increase trust on the site."

However, some remain wary of the site's success in the face of competitors Amazon.com and Craigslist.  EBay recently weathered controversy surrounding changes in its rates and feedback policies that led to a large seller boycott.  It is also in a long and rather confusing legal battle with Craigslist, which it partially owns.  The battle has featured suits and countersuits and the outcome is still uncertain.