The problems started around 6 a.m. PT Monday with outages in Yahoo's systems that power the merchant stores, according to Yahoo's Yodel Anecdotal blog. The issues lasted until about 1 p.m. PT when transactions began going through at a much higher rate, albeit much slower. By 6 p.m. PT things were back to normal, the blog entry said.

That's at least seven hours with no service, and then another five hours with slow service, on what is believed to be a huge online-shopping day.

"We deeply regret the inconvenience this caused to both our merchants and their shoppers. Our customers' expectations were not met, nor were our own. And we are moving mountains inside Yahoo to find out why and how this happened, and to take steps to try to ensure it doesn't happen again," Rich Riley, senior vice president of Yahoo's online channel division, wrote in the entry, which also includes the words "mea culpa" in a purple box. "As for the future, rest assured that we are taking the necessary steps to prepare for the peak holiday selling season. We have technical and customer relations staff mobilized and ready to support our partners."

I don't think that will do much to pacify Yahoo customers who were livid and threatening to cancel their accounts.

"Absolute disaster for us...We were having a record weekend and now this...What a disgrace for Yahoo to have issues on one of the most important days of the year," a Webmaster with the alias "jwrunner" wrote in WebMasterWorld discussion group.

It is not a surprise, that both Google and Amazon want a slice of PayPal's cake. In the most recent quarter, PayPal had net revenues of $454 million, up 34% over the $339 million reported in Q2-06. More importantly, PayPal Merchant Services transactions jumped 57% to $4.92 billion globally from the $3.13 billion reported in Q2-06.

"StumbleUpon is a great fit within our goal of pioneering new communities based on commerce and sustained by trust," said Michael Buhr, senior director, eBay. "StumbleUpon's downloadable toolbar provides an engaging and unique experience to its users, but it is the similarities in our approaches to the concept of community that make it such a compelling addition to eBay."

Driven by word-of-mouth, the StumbleUpon community has grown 150 percent year over year and delivers approximately five million new recommendations a day to its large, highly engaged user base. StumbleUpon allows people to discover Web sites, people, videos, product information, communities and other online content based on personal interests. By allowing its community to rate the content, StumbleUpon gets smarter as it is used and provides an increasing level of relevance over time.

Said Garrett Camp, chief architect and one of three StumbleUpon founders, "We're excited about joining eBay, as we share the same values around community and we look forward to working with them to accelerate our growth."

Om Malik points out an interesting scenario for the new acquisiton: "By marrying the toolbar to Skype client, eBay can do an end run around Google's dominance of the search business. A simple search box inside Skype client is all it would take." A great observation, because we all know, no matter how many denials we all hear, the number game in Silicon Valley now is: Find a way to do significant business online "without" Google's involvement, and you'll have found the goose that lays the golden eggs.

An explosive device blew out a thick, plate-glass window Tuesday evening at the Silicon Valley headquarters of PayPal, the online payments unit of eBay.

No injuries resulted when what local fire officials said was an explosive device shattered a 6-foot-square window on the ground floor of the four-story building in San Jose. The explosion occurred outside a building exit.

Investigators were still trying to determine the nature of the device. "Whatever it was, it disintegrated," San Jose Fire Department Capt. Jose Guerrero said. "Whatever caused this was pretty strong."

About 45 employees were working in the PayPal offices when the explosion occurred at 7:24 p.m., eBay spokesman Hani Durzy said. Most employees had left the building early ahead of the Halloween holiday celebrations, he said.

These high costs of card acceptance and consumer concerns about fraud are prompting online retailers to look for less expensive and more secure alternative payment methods. The Internet Retailer survey found that 52.7% of those responding thought it was "very important" or "important" to provide an alternative payments program.

"We're starting to see competition with credit cards," says Avivah Litan, vice president and research director at consulting firm Gartner Inc., adding that merchants are looking at such alternatives as financing, prepaid cards and gift cards. She says that alternative payments could account for between 10% and 20% of volume within three years.

Schatt says he expects that alternative payment options could account for up to 26% of all online payments by 2009, up from 14% in 2006.

In any case, retailers need to think hard and long before implementing new payment options, says Alicia Berry, director of operations for DVD Empire. "There are all different kinds of problems and issues," she says. "You're dealing with other companies, other servers, all different kinds of people, turnover in sales people. It’s not an easy process."

For every $1 you spend on AdWords, you can process $10 in sales for free through Google Checkout. For example, if you spent $1,000 on AdWords last month, this month you can process $10,000 in sales at no cost. The more you spend to promote your business through AdWords, the more you save on transaction processing fees with Google Checkout.

eBay's feedback system is, arguably, their most valuable asset. It provides the grease necessary to make complete strangers comfortable enough to buy and sell from each other. But it's a closed system -- only eBay transactions can affect a user's feedback score. And as much as eBay doesn't like it, these users (and more) buy and sell stuff through services other than eBay all the time, online and offline. There is tremendous demand for third party services to incorporate eBay's feedback system into their applications to make them more usable. But don't expect to see eBay embrace mashups any time soon, or ever.

Rapleaf allows any user to leave feedback for anyone (whether they are a user or not), based on a unique email address or phone number. Type that identifier into the search bar. If no results occur, you can be the first to leave feedback for that person. This can be someone you've bought or sold with, or just a friend that you want to endorse. Like eBay, a free-text area is included for comments in addition to a positive/neutral/negative rating.

A person's feedback rating is a raw score, with a point added for a positive review and a point subtracted for a negative review (just like eBay). Non-transaction endorsements are calculated and shown separately. Various stats are calculated and displayed based on feedback ratings by others (see screen shot below).

When introduced, mobile phone users will be able to send a text message to 729725 (the spelling of PayPal on a numeric handset keypad) with the amount of money the sender wishes to transfer and the recipient's phone number. On the PayPal website, the company uses the example: "Send 5 to 4150001234"

A PayPal computer then calls back the text message sender on the phone and asks the user to enter a secret PIN to confirm the transaction. PayPal immediately notifies the recipient and tells it how to claim the payment online.

The website shows a second option where the customer calls 1-800-4PAYPAL, enters a secret PIN, the amount of the transfer and the phone number where the payment is to be sent.

PayPal has been testing the service with eBay employees and on a handful of customers. It plans to charge no special fees for text payments, but cautions users to check with their mobile phone companies to see if special charges may apply.

Credibility works both ways. iKarma makes it easy for visitors to your iKarma Profile to judge a poster's credibility by allowing everyone to see other comments left by that poster about others. This diminishes the credibility of the few chronic complainers everyone encounters, which helps to further reinforce the integrity you demonstrate by allowing both good and bad posts and ratings.

iKarma also takes steps to ensure that anonymous posting is minimized by verifying poster email addresses and by recording the date, time and IP address of every feedback post. This limits the impact of the occasional undeserved negative posting.

US music lovers downloaded 20 million tracks from firms including iTunes and Napster in the seven days between Christmas and the New Year, according to tracking firm Neilson SoundScan.

The figure more than doubles the existing record of 9.5 million set the previous week, and is three times the figure for the same period a year ago.

In a few short years, users can expect to make telephone calls for free, with no per-minute charges, as part of a package of services through which carriers make money on advertising or transaction fees, eBay's chief executive said on Wednesday.

Seeking to justify eBay's $4 billion purchase last week of Web-based communications phenomenon Skype Technologies, Meg Whitman countered criticism by a financial analyst during the company's quarterly conference call by agreeing with some of his points.

"The percentage of users that you can actually charge for (phone services) will actually go down, so I actually agree with that and we understood that when we looked at Skype," Whitman said in responding to the analyst's question.

"In the end, the price that anyone can provide for voice transmission on the 'Net will trend toward zero," eBay's top executive said.

Calling it a "digital lifestyle aggregator," Canter promises that individuals will need just one login and password to check news feeds, publish blog posts, manage social networks and swap photos or music online -- all while being able to access the same services they currently use.

GoingOn will also have its own social-networking component built in, but Canter is adamant that he's not trying to get other products to run on his platform. Instead, his goal is interoperability; in his words, "We will become an identity hub."

According to their vision, a company like Amazon.com would no longer demand that you hand over tons of personal information before giving you an account and selling you a book. Instead, you, as the would-be purchaser, would offer Amazon whatever information you feel comfortable giving out -- such as your name, address and payment details -- and the retailer would be put in the position of accepting or rejecting your purchase.

WebTrends said that the percentage of users saying no to third-party cookies has risen four-fold in the past 18 months, from 2.8 percent in January of 2004 to 12.4 percent in April of this year. However, the firm also said that growth seems to have peaked. Some industries are being hit harder than others, with a nearly 17 percent refusal rate in retail, more than 15 percent in telecommunications and 12 percent among media firms.

Tech grew fast as it clawed back from the dot-com bust of 2001. Some markets, such as cell phones, topped 20% growth a year. The industry is still growing, but not at that rate, tech analysts say. Corporate tech buyers surveyed by CIO magazine in March said they expected to increase spending by 6.4% in the next 12 months. That's down from 7.3% in March 2004, the magazine said Friday.