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IS SWOOPO A VERY LOOSE FORM OF ONLINE GAMBLING
A MacBook Pro laptop worth $1 400 that goes for $35.86 sounds too good to be true, but according to reports in the online publication The Atlantic, that is typical of the auction action at online bidding site Swoopo.
But the real money is probably behind the scenes, in Swoopo's business model, reports the publication, which researched the site's money making ways. "For each 'bid,' the price of the computer goes up by a penny and Swoopo collects 60 cents, The Atlantic found. "To get up to $35.86, it takes, yes, an incredible 3 585 bids, for each of which Swoopo gets its fee. That means that before selling this computer, Swoopo took in $2 151 in bidding fees."
The Atlantic's Jonah Lehrer asks why the site is so popular, and reports: "I think the real appeal of the website is the sheer uncertainty. As an item nears the end of bidding, a big countdown clock appears. At any moment, someone else can come in and bid on the item, which then resets the clock to twenty seconds. The process repeats and repeats, until the price gets to a point that discourages other bidders. (It's probably less discouraging to you, since you've already sunk $50 in bidding fees.)
"But here's the secret of the site: after placing a bid, you're forced to wait and watch. You have no way of knowing if your bid will win, or if someone else will swoop in and bid on the laptop at the last possible second. In other words, it's just like a slot machine: you put in a quarter and wait for the wheels to whirr. With swoopo, the random number generator is other people."
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