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"Auction Site" Swoopo got $44800 for a $2500 computer. See comments for explanation (swoopo.com)

14 points by jimmyrcom ↗ HN
The Way swoopo works: Users pay 75 cents per bid to use swoopo. Penny auctions start with a product at $0 then each bid increases the item price by one cent. Bidding at the last second won't help because it resets the timer to 10, 15 or 20.

$44800 computer: 58950 bid were placed, at 75 cents each that's $44212.50 + the final price $589.50 for a total of $44802

I researched the site a bit and generated some statistics including the top 20 biggest consumer fails / swoopo wins, the above being the most profit they've made. http://blog.jimmyr.com/Auction_site_Swoopo_a_scam_or_a_bargain__13_2009.php

26 comments

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jimmyrcom
The Way swoopo works: Users pay 75 cents per bid to use swoopo. Penny auctions start with a product at $0 then each bid increases the item price by one cent. Bidding at the last second won't help because it resets the timer to 10, 15 or 20.

$44800 computer: 58950 bid were placed, at 75 cents each that's $44212.50 + the final price $589.50 for a total of $44802

I researched the site a bit and generated some statistics including the top 20 biggest consumer fails / swoopo wins, the above being the most profit they've made. http://blog.jimmyr.com/Auction_site_Swoopo_a_scam_or_a_barga...

jraines
What do you think is critical mass for making something like this profitable?

And how do you scale something like this that seems to require 1 db call per user per second minimum? Is this something memcached would be good for? (I don't really know much about it yet)

I'm interested b/c I made a little clone that I'd like to turn into . . . something, maybe a facebook app: www.dealbattles.com. It's a Ruby/sinatra app right now that uses JQuery .post and .load to display the counters and update based on bids. You can't really use it right now because buying credits is tied to my paypal sandbox acct.

If anyone's interested in helping, I'm listening.

SwellJoe
Do you not have any ethical qualms about taking advantage of the mentally retarded like this?

I can't holler at the Swoopo folks about it, since I don't know them. But, you're right here, so I feel compelled to be judgmental. I don't do that very often. Generally speaking, I think just about anything goes (porn, gambling, soft drugs like pot, etc., as long as you're only selling to adults). But taking advantage of the least intelligent and the most desperate to save money is just nasty.

jraines
I'll be the first to admit that it's one step above gambling (you do actually have control over if you 'win' or not, if you're willing to spend until you do - this is why it's legal and not a raffle).

But you just said you're OK with gambling, so I don't get the outrage. Swoopo pushes it as "entertainment shopping", which I think is fair.

And if you want to really get cynical, separting the idiotic from their money is a public service insofar as they can't spend it on things with negative externalities, like US Weekly</joke>.

SwellJoe
I never said my feeling about this was outrage. But, I do consider it unethical, and it's something I would not take part in.

I'm OK with honest gambling...payouts of 85% to 95%, as found in Las Vegas. I'm not OK with lotteries (which are legal, and in fact operated by the government, but I consider them unethical for the same reason...they prey on those least able to understand the odds and the costs, and those who most desperately need money). At least in the case of lotteries it contributes to some sort of common good (states usually say it is for schools; "think of the children!"). Swoopo is contributing to nothing but filling the pockets of the founders.

jraines
Maybe they donate to charities. I would, I promise!

Also, what actually made me start building it was that I would have a twist where losers would be given the chance to still buy the product at a discount (ensuring a profit margin by taking into account revenue from bids and % of people who usually would take the 'consolation' offer).

patio11
You don't have to be "retarded" to fall for something like this. The poster clearly is quite intelligent. He also thinks he knows how to beat the system. Behold the system in all its perfidious majesty: if there are two people in the world smart enough to beat it, it will take everyone for all they are worth.

The smartest man I have ever known, who will one day cure cancer, once described to me in all earnestness how the double-your-bet-after-you-lose strategy was flawless. (Relatedly: He also was a fan of penny stocks.)

djahng
Did you point out that the double-your-bet-after-you-lose strategy breaks down once you hit the upper betting limit?
sho
Or when you run out of reserves, which is inevitable in the long run.
jimmyrcom
I wouldn't spend more money on it again, I just found it really amusing trying to make sure there's not a tiny chance I could reliably be able to make a profit, even if minimal, by studying the statistics behind it. In the end it's like poker but even worse odds, even if you learn all the rules and even understand all the probability of each hand, you're still gambling and your odds aren't a hell of a lot better. Even if you could make a bid bot with millisecond precision it wouldn't increase your odds significantly, if at all. I too had read a bunch of blogs claiming it was a scam etc before joining.
zaidf
Why do you think this is very different from gambling?
SwellJoe
The payout is worse than government-run lotteries (which I also consider unethical, and preying on the least capable of making informed decisions). This kind of payout in Vegas would lead to serious legal issues for the casino.
bigiain
Cynical me says "It's only a scam - who'd bother to engineer it properly to scale and still produce 'accurate' data? Just 'guess' (ie: rand();) vaguely believable numbers and display them."

big

lowdown
5-10 in a federal penitentiary?
bigiain
Well, there _is_ that. (Actually it surprises me a little that the business plan doesn't already suffer that issue).

On the other hand, I suspect my "federal" (.au) is different from your "federal" (assuming .us), and if _I_ were operating this scam the servers "federal" would be different again (and I'd ensure that my victi^h^h^h^hcustomers "federal" never intersected with my own...)

big

noodle
the concept is profitable almost immediately.
carlosrr
Something that needs to update so frequently shouldn't poll for its data. It would be a better idea to create a Comet server. That simplifies synchronization since you don't have to query the DB every time someone does a request. Instead, you query it every time someone changes a field.
midnightmonster
I built a site like this for a client a couple years ago. They were hoping to use it to raise money for charity. They paid me for the work but never operated the site.
lurker767
i'll pay you for the site again.
midnightmonster
If you're serious, I can contact the original client and see about IP. My email is this screen name @gmail.com.
sil3ntmac
Looks like the system is guaranteed to make money on at least some items... for example:

http://www.swoopo.com/auction.html?cm_re=Homepage-_-Grid-_-1...

See the "15" image next to the countdown? Mouseover that, and it tells you that the 10 second countdown for this item will not trigger until the bid has gotten up to $64.70. Doesn't take a genius to figure out that the house will win this one (if not all of them).

gojomo
I find this morally dubious for the same reasons as SwellJoe -- it's an awful gamble, even by the standards of slot machines or government lotteries.

I hope competition and education can drive their take down to the level of other money-based game operators. For example, what if there were an alternative where the max collected on any item was capped at 2X retail?