The Everex TC2502 Green gPC is one of the first Linux-based desktop machines to be offered for sale by a major retailer. As such, it could become a barometer of open source software’s potential for success in the consumer market.

The gPC comes preloaded with the gOS operating system — a Linux variant — and a 1.5-GHz processor manufactured by Intel clone maker Via Technologies. The rest of the specs include an 80-Gbyte hard drive and 512 Mbytes of DDR 2 memory.

There’s no monitor included, but buyers get stereo speakers and a DVD-ROM/CD-RW drive.

As for software, the gPC comes with the free OpenOffice.org 2.2 productivity suite. The suite, which includes word processing, spreadsheet, and presentation applications, recently won backing from IBM.

Everex is a Taiwanese-based PC maker that’s looking to carve a niche for itself in the computer industry’s economy section. A version of Everex’s gPC that runs the basic edition of Microsoft’s Windows Vista is on sale at Wal-Mart for $298.

The retailer is making the gPC available at selected stores and through its Web site.

The price difference between the Linux and Windows version of the computer reflects what some in the tech industry derisively call “the Microsoft tax” — a Windows licensing fee that PC makers must pay to the Redmond, Wash., software maker for each computer sold.

It’s unlikely that Linux-based PCs will displace Windows-powered computers anytime soon. For one thing, there’s only a limited number of applications that will run on Linux.

Linux advocates argue, however, that until they become more mainstream, open source systems could fill some important niches — such as the market for cheap PCs aimed at students in low-income areas.

Original URL: http://www.informationweek.com/hardware/showArticle.jhtml?articleID=202801241

The Trojan installs a scaled-down webserver on an infected machine that masquerades as eBay and several third-party destinations frequently used to sniff out fraudulent offerings, including Carfax.com, Autocheck.com and Escrow.com.

When a victim browses to one of these sites, the webserver creates a parallel universe of sorts, in which the victim sees counterfeit pages designed to counter fraud protection mechanisms offered by eBay and third-party sites.

“To think that somehow they got software on their system that managed to spoof all the validation sites – that’s a shit-scary story,” said Roger Thompson, a researcher at Exploit Prevention Labs who specializes in web-based attacks. “It’s fiendishly clever.”

The malware was found on the machine of one eBay Motors user who recently lost $8,650 after trying to buy a 2005 Jeep Liberty advertised for 10 days on the site. Customer representatives have refused to cover the theft because, they said, the transaction was made outside of eBay.

Shortly after making the offer, the victim received a notification in the My Messages section of her eBay account telling her she had won the auction. eBay has long cautioned users not to rely on notifications unless they appear in this official section.

The malware installed on the victim’s machine caused her browser to display a counterfeit version of just such a message. Had she used a non-infected computer to access her account, no such message would have appeared.

“There’s no reason to suspect it’s fraud until its too late,” said the Ohio-based user, who agreed to tell her story on the condition her identity was not revealed. The Register was able to verify the scam by confirming details with eBay and by reviewing screenshots, emails and files pulled from her machine.

The malware appears to be a reworking of Trojan.Bayrob, which first came to light in early March when researchers from Symantec wrote reports about it.

It arrives in an attachment to an email responding to a bid and installs a local proxy server that redirects traffic bound for eBay. The proxy, according to Symantec, spoofs sensitive pages on eBay, including online auction’s “ask a question” messaging feature. The Trojan also inflates the user feedback score of the purported buyer, according to Symantec.

In the intervening seven months, the Trojan has been updated so that, among other things, traffic bound for sites such as Carfax and nine other addresses maintained by third-party companies will also be redirected. This helps thwart victims who try to independently confirm details fed on the falsified eBay pages.

eBay spokeswoman Nichola Sharpe says the company’s security team has forwarded samples of the new strain to anti-virus companies so they can add it to the updates they send to customers.

Original URL: http://www.theregister.co.uk/2007/10/19/return_of_trojan_bayrob/print.html

The “Neighborhoods” feature encourages users to post photos, product reviews, tips and responses — creating a far more visual and interactive experience than eBay’s text-based discussion forums.

The move is one result of a broad reorganization strategy started in late 2006, when the San Jose, California-based e-commerce leader’s scorching growth rate began to slow.

Individuals listed 480 million items on eBay in the second quarter, down 6% from the first quarter and down 2% from a year earlier. The number of listings by “power sellers” who operated eBay stores was 79.1 million — unchanged from the previous quarter but down 25% from a year earlier.

Many users complain that the site’s size — it listed 559.1 million items worth $14.46 billion (euro10.3 billion) in the second quarter — can make it tough to find and purchase a specific product quickly. Users are turning to rivals such as Seattle-based Amazon.com, Salt Lake City, Utah-based Overstock.com Inc. and Chicago-based uBid Inc.

“We knew we had to change things internally because we could not innovate with the effectiveness or speed we needed,” spokesman Hani Durzy said Tuesday.

Marketplaces President John Donahoe spearheaded a “philosophical shift” this year in which engineers, product managers, quality assurance representatives and other employees were regrouped from traditional function-based “silos” into two teams — a buyer experience team and a seller experience team.

Neighborhoods — which aggregates postings from eBay blogs, guides and reviews — was the brainchild of an “engagement” subgroup of the buyer-experience team.

Among the 600 new neighborhoods is “Shoe Heads,” intended as a haven for footwear fashionistas. Others range from Beyonce to Battlestar Galactica, and still more will be formed based on popularity of search terms and community feedback.

“People who are passionate about certain brands, trends, celebrities or products have been discovering and trading with one another for years,” said Jamie Iannone, an eBay vice president in charge of buyer experience. “Neighborhoods makes this even easier.”

Later this year eBay will roll out “One Click Bid,” which should boost a buyer’s chances of winning during the final 15 minutes. EBay also plans to streamline its “My eBay” service and speed its cumbersome checkout process.

And it is beta testing features called “Snapshot View,” the e-commerce equivalent of window shopping; “Best Match,” an automatic sorting option; and “Countdown,” which features improvements in real-time auction monitoring.

Building a sense of community should keep buyers and sellers at eBay longer, experts said Tuesday.

EBay building neighborhoods is the equivalent of Nordstrom or another brick-and-mortar retailer adding a cafe and lounge.

“The idea is this will provide more ’stickiness’ so a user will come back more often, spend more time there and will more likely purchase items,” said Karsten Weide, an analyst at research firm IDC. “This should make consumers’ lives a whole lot easier.”

Original URL: http://www.usatoday.com/tech/products/2007-10-09-ebay-neighborhood_N.htm

Early in 2005, established anti-piracy company Viralg of Finland burst onto the P2P scene with a staggering claim: With their technology it was possible to end 99% of all file-sharing.

In 2004, Viralg listed Electronic Arts, Vivendi, Microsoft Game Studios, Sony Computer Entertainment, Atari, Nintendo, Codemasters and THQ as just some of their customers. They were among the nominees for the ICT Prize 2005 and the winner of the Venture Cup business plan competition.

The portfolio certainly made them appear impressive at the time, so when an eBay auction caught the eye today offering to sell Viralg’s technology for a cool $1,000,000, TorrentFreak became a little curious.

So what’s on offer? Looks like Viralg’s ‘intellectual property’ in the form of some patent applications:

Viralg supplies technology aimed at preventing sharing of illegal content such as music, movies, GPS maps, games and software from being shared over P2P networks such as Gnutella. Viralg technology is in widespread use by record companies in Finland (90% of customers) and in the other Scandinavian countries. Technology has generated turnover of over 500.000 US dollars. The patent applications for sale cover the necessary key technology for the only possible effective protection against illegal P2P sharing. Depending on the source illegal P2P causes damages of 4 to 12 billion US dollars to media companies per year.

So should likely buyers (unhappy MediaDefender customers perhaps?) invest in this technology?

Viralg claimed to be able to create a corrupted file but with a working hash, giving it the appearance of a genuine file. As people downloaded they got a selection of genuine and corrupt parts sent to them rendering the final file useless. Although partially effective on the FastTrack network (KaZaA [R.I.P] )years ago, Viralg’s offer of 40 hours of training to use the system still doesn’t cut it in today’s BitTorrent dominated file-sharing world.

Before Prince gets any fancy ideas about buying this for the Web Sheriff to use against The Pirate Bay, this outdated system is pretty useless against BitTorrent, which renders its ‘Patented Virtual Algorithm’, well – useless.

TorrentFreak spoke to Dr. Ir. Johan Pouwelse, researcher on P2P technology at Delft University of Technology, who explained why: “Bittorrent uses a separate hash for every 1-4 MByte. This means you can still exploit the weakness in the protocol by sending bad data. However, clients are now generally so smart that they only accept maximum 1 fake 1-4MB block from an IP address.”

Of course to corrupt lots of files, you need lots of presence on file-sharing networks (servers, accounts, the whole MediaDefender-style setup) so the $1m tag is just the tip of an enormous iceberg.

Maybe some of the sales statistics will tempt prospective buyers? The system has been running since 2003, and in that time it generated a turnover of $500,000. Potential buyers are likely to be more interested in the bottom line, especially now that the bottom has fallen out of the FastTrack network.

Anyone with a bulging bank balance needing a guarantee of being able to corrupt files on the FastTrack network (and is unaware that MediaDefender’s tools are available for free) should hurry over to the eBay auction right now, there’s not long left to go – for the auction or Viralg.

Original URL: http://torrentfreak.com/anti-piracy-technology-for-sale-on-ebay-for-1m-070925/

Last week, Ginko Financial — an unregulated bank that promised investors astronomical returns (in excess of 40 percent) and was run by a faceless owner whose identity is still a mystery — announced it would no longer exist as a financial entity.

The declared insolvency meant the bank would be unable to repay approximately 200,000,000 Lindens (U.S. $750,000) to Second Life residents who had invested their money with the bank over the course of its three and a half years of existence.

“You have to remember, there’s not a lot of places to put your money in Second Life,” said Benjamin Duranske, a lawyer who publishes Virtually Blind, a blog that chronicles virtual laws and legal issues that impact worlds like Second Life. “When you have disposable income and a bank that’s promising a 60 percent return on deposits, that alluring — especially if it works for a while.”

Quickly following this news, a tidal wave of backlash took shape from thousands of angry Second Lifers in SL forums.

Yet in many ways, the undoing of Ginko and the collective loss of more than 750,000 very real U.S. dollars is only the latest event hammering home the fact that the lawlessness of the virtual land has its drawbacks. Indeed, after Linden Lab, the owner and operator of Second Life, invited the FBI to investigate casino activity, the company subsequently instituted a ban on all gambling earlier this month.

On Tuesday, Linden Lab itself issued a statement trying to clarify its stance on regulations and Second Life’s virtual economy.

“Linden Lab does not intend to recreate or subvert real-world laws in any way,” the statement says. “We caution our residents to be wary of anyone offering extremely high interest rates at no risk, either in the real world or in Second Life — if it sounds too good to be true, it probably is.”

The response was timely, considering Second Life currently has 20 to 30 banks that operate essentially the same way Ginko did. That fact, plus the large losses associated with Ginko, has led to a growing call for even more transparency and regulation among SL residents.

Duranske is at the forefront of the movement. An intellectual property lawyer who’s taking time off from his practice to work on a book about virtual law, he was one of the first people to jump on the shady business dealings at Ginko Financial more than two months ago. Indeed, his blog has one of the most comprehensive accounts of Ginko’s downfall.

Duranske claims he’s personally talked with a few SL residents who have lost as much as $10,000 in the Ginko scheme, but estimates that the majority lost a more moderate amount–somewhere in the range of $50 to $100.

“A lot of people forget, Second Life is governed by U.S. law and the laws of California,” Duranske explained. “It just so happens that these laws haven’t been enforced.”

But that’s about to change. Duranske says because Ginko has received so much press lately, the bank, as well as others, will inevitably become an issue that Linden Lab will have to tackle. That either means self-regulation or more federal intervention.

He’s hoping it won’t come to the latter.

Robert Bloomfield, an accounting professor at Cornell University, is of the same mind. Bloomfield says the collapse of Ginko and the recent closing of casinos, among other incidents of alleged fraud, are shocks to participants in the Second Life financial sector.

That said, Bloomfield believes residents are already responding by creating a variety of oversight institutions of their own, including companies that insure against fraud and homegrown regulatory institutions like the Second Life Exchange Commission, which is modeling itself on the SEC.

“It will be very interesting to see which organizations survive (if any), and how they reduce the risk of fraud,” he said in an e-mail.

Bloomfield admits he’s getting in on the act on a personal level and has forged an ongoing agreement with two Second Life-based stock exchanges, the International Stock Exchange and the SL Capital Exchange (formerly AVIX) that will provide him with comprehensive data on trading histories for all listed firms.

He expects to publish analyses of that data in the near future and says such information could very well be another important step toward transparency.

In the end, Bloomflield says SL’s financial and business sector can teach us a lot about the nature of regulation and oversight. Even with the unfortunate case of Ginko, he still believes the intervention of real-world regulation is remote.

“I am really hoping that RL (real life) regulation does not come to SL because right now SL has the chance to sort out what type of oversight and regulation it wants,” Bloomfield said. “If the RL authorities or Linden Lab do start meddling with business affairs, it could ruin a golden opportunity for real innovation and creativity, a chance to recreate a world in a new image.”

Original URL: http://www.wired.com/gaming/virtualworlds/news/2007/08/virtual_bank

Amazon FPS is an extension of the older Amazon Payments service, which allowed third-party vendors to receive payments for products they sold through Amazon’s website. And while that setup offered a lot of online exposure to those vendors, its flexibility was limited to items sold through Amazon.

One benefit that the company touts is that it allows users who already have Amazon accounts to use their already-existing account information for their purchases. This means that won’t have to reenter that same information on another site, which can be a pain in the butt—you know the process: shipping address, billing address, credit card info, shipping preferences, etc.

There are also no minimum fees for companies that want to use the service, and no startup charges either. According to the company, all pricing is based on transaction size and payment method, charged to the vendor on a per-transaction basis. Google Checkout currently offers a similar deal, but only until January 1, 2008.

Another major draw to Amazon FPS’ fees (or the lack thereof, in this case) is the obscenely low cost of processing micropayments. PayPal offers its own micropayment service, but the fees involved mean that PayPal’s micropayments can’t be that “micro” if the vendor wants to be at all practical. As the folks from Freshbooks discuss on their company blog, Amazon’s micropayment system allows a vendor to bill for as low as once cent per month if they should so choose, and the transaction fee to the vendor for any such micropayments will only be one quarter of a cent. According to Freshbooks, this “changes the game for the entire web.”

Vendors looking for a completely integrated checkout solution may still want to seek out other options like PayPal and Authorize.net, as Amazon FPS currently functions as a payment redirect service like Google Checkout, according to TechCrunch. But for smaller vendors, Amazon’s solution could certainly make it easy to begin processing payments online with minimal commitment. Amazon is offering its new service as a limited beta, and the company is accepting new signups until it feel it has reached max beta capacity.

Original URL: http://arstechnica.com/news.ars/post/20070803…/paypal.html

What’s worse is that a lot of that advertising may never come back to newspapers even if the real estate sector recovers. That’s because a significant chunk of those advertising dollars are moving — you guessed, online.

Exactly how much of a shift is occurring is difficult to measure in terms of dollars or market share, but several real estate executives say they are making a conscious decision to move money out of newspapers and onto the Internet as that medium grows in importance as a tool for researching home-buying decisions.

Granted, a significant amount of the declines in real estate advertising in newspapers can be attributed to the general weakness in real estate markets, particularly in hard-hit markets such as California and Florida, which were booming a year ago — leading to big gains in advertising back then.

Last week Tribune Co., the No. 2 publisher by circulation, posted a 24 percent drop in the second quarter, while industry leader Gannett Co. has reported a 9.9 percent decline and McClatchy Co. reported a 19 percent decline, citing big losses in California and Florida.

Like the housing market itself, much of the up-and-down movement in newspaper real estate advertising can be viewed as cyclical, meaning it will be weak in down markets and bounce back in the upward part of the cycle, whenever that comes up.

But what’s worrying analysts this time around is that real estate could become the next category of classified advertising — after help-wanted ads — to mark a significant and permanent shift away onto the Internet. The stakes are big for newspapers since classifieds are highly lucrative and make up more than 35 percent of their revenues.

Mike Simonton, the top media industry analyst at the Fitch Ratings credit analysis service, says that currently a good 30 percent of help-wanted classified advertising is now online, while the Internet’s share of real estate and auto classified advertising is lower, at about 15 to 20 percent, but poised to move higher.

“The threats from the Internet are real,” Simonton said. “Newspaper advertising should remain under pressure until newspapers are better able to address the threat of online advertising.”

Representatives of several major real estate franchisors said in interviews that many home sellers still see newspaper advertising as an essential component of selling a home, but that younger brokers, home sellers and buyers are clearly more focused on using the Internet.

“For our agents, newspapers are an old standby,” said Abby Lee, director of regional advertising in Denver for RE/MAX, a major real estate franchisor. “With younger agents, there’s a trend of going online. There’s a realization that’s where they need to be.”

Suzy Antal, director of marketing, communications and public relations for Prudential Real Estate Affiliates, a unit of Prudential Financial Inc., said many Prudential agents have been pulling back on advertising during the current downturn, but as they return, they’re shifting ad budgets to their own Web sites, creating blogs, and taking different approaches beyond newspapers.

“Is newspaper a high priority? No,” Antal said. “I don’t believe my buyers and sellers are going to be in that market.”

Newspaper publishers understand they need to move more aggressively to hold on to real estate advertising. “We can’t sit on our hands,” says Charlie Diederich, the director of marketing and advertising at the Newspaper Association of America, an industry group.

Diederich said newspapers are still a key part of most people’s real estate searches and an important tool for realtors to make people aware of their brands. But he also acknowledged that newspapers need to do more to make their own Web sites essential to home buying decisions.

“We’ve got to improve both our print but especially our online products … so consumers will continue to come to us first so we can deliver that audience to the professional realtor,” Diederich said.

A group of five major newspaper publishers also owns Classified Ventures, a Chicago-based business that powers the real estate sections of the Web sites of its 125 member newspapers.

Tim Fagan, president of that group’s real estate division, said Classified Ventures would “significantly increase” its investment in Homescape, a real estate-related Web site that provides home listings, but he declined to provide specific numbers.

Whether those efforts will be enough to stanch the flow of real estate ad dollars to online alternatives remains to be seen.

Blanche Evans, the editor of Realty Times, an online real estate news service, says that realtors now have a number of alternatives besides newspapers for listing homes for sale, such as http://www.Realtor.com, a site run by the National Association of Realtors, in addition to major online destinations such as Yahoo Inc.

As home-buyers flock online, it’s also tough on realtors, Evans said, since home-buyers are becoming accustomed to seeing extensive color photos, descriptions of the neighborhood as well as video tours of the property — all of which costs money to produce.

With all the online tools available today, realtors “have the ability now to really expose the property in a significant way,” Evans said. “People have the ability to tour the house. That has changed everything.”

Original URL: http://news.yahoo.com/s/ap/20070730/ap_on_hi_te/newspapers_real_estate

Judge Jerome B. Friedman of Federal District Court denied a motion by the Virginia company, MercExchange, for a permanent injunction to stop eBay from using the feature. The Supreme Court ruled last year that, although eBay infringed upon MercExchange’s patent for the service, it was up to the lower court to decide whether eBay had to stop using it.

In his ruling, Judge Friedman said the company was not irreparably harmed because it continued to make money from its patents, either by licensing them outright or by threatening litigation against those it believed infringed upon them.

“MercExchange has utilized its patents as a sword to extract money rather than as a shield to protect its right to exclude or its market share, reputation, good will, or name recognition, as MercExchange appears to possess none of these,” he wrote.

A federal jury found in 2003 that eBay had infringed on MercExchange’s patent and awarded the company $35 million. The amount later was reduced to $25 million.

Greg Stillman, a lawyer for MercExchange, which is based in Great Falls., Va., called the opinion a double-edged sword.

“It was sort of good news, bad news for both sides,” Mr. Stillman said. He said he was sure that eBay was relieved not to be enjoined but that the judge “made it quite clear that they’re going to have to pay for that right.”

Catherine England, a spokeswoman for eBay, said the company was “extremely pleased” in the decision to deny the injunction.

In the closely watched case, the high court ruled that judges had flexibility in deciding whether to issue court orders barring continued use of a technology after juries found a patent violation. The decision threw out a ruling by a federal appeals court that said injunctions should be automatic unless exceptional circumstances applied.

The case became a rallying point for critics who argue that the federal patent system is riddled with abuse from small businesses that sue established companies to enforce patents for ideas that have never been developed into products.

Original URL: http://www.nytimes.com/2007/07/28/business/28ebay.html

But perhaps what’s most interesting is that the system works even if shared songs weren’t originally purchased from Zune Marketplace and, therefore, don’t use Microsoft’s DRM. In other words, DRM-free music that’s been downloaded from elsewhere — including pirated songs — still have the potential to be monetized through Zune to Zune sharing. That’s because, rather presumptuously, the Zune wraps its own DRM around every song that’s shared.

Paying users for sharing tracks that subsequently lead to a purchase is an interesting concept, which at least shows some innovation in terms of how to convert piracy into legitimate music sales. However, with the music industry moving away from DRM and towards universal formats, the idea may have already expired before it ever hits market.

Original URL: http://www.last100.com/2007/07/13/zune-users-to-be-paid-for-sharing-songs/

Customer satisfaction levels have remained almost flat through the last several years, according to a survey of about 20,000 online shoppers recently released by ForeSee Results, a consulting and research firm based in Ann Arbor, Mich. The problem, according to Larry Freed, ForeSee’s chief executive, is not so much that consumers have ignored the many improvements made in recent years. Rather, he said, they still expect more from Internet shopping than it has delivered.

“If we walk into a local store, we don’t expect that experience to be better than it was a couple years ago,” Mr. Freed said. “But we expect sites to be better. The bar goes up every year.”

In ForeSee’s latest survey, released last month, just five e-commerce sites registered scores higher than 80 out of 100, and no site scored higher than 85. They were, in descending order, Netflix, QVC.com, Amazon, Barnes & Noble and the pet supplies site Drs. Foster & Smith. It was much the same story a year ago, when just five scored higher than 80, with no site surpassing 85.

“Scores have inched up over time for the best e-commerce companies, but the overall numbers haven’t moved drastically,” Mr. Freed said. “At the same time though, if you don’t do anything you see your scores drop steadily.”

That dynamic has been a challenge for online merchants and investors, who a decade ago envisioned Internet stores as relatively inexpensive (and therefore extremely profitable) operations. Now some observers predict a future where online retailers will essentially adopt something like the QVC model, with sales staff pitching the site’s merchandise with polished video presentations, produced in a high-tech television studio.

QVC.com is evolving in that direction. The Web site, which sold more than $1 billion in merchandise in 2006, has for the last five years let visitors watch a live feed of the network’s broadcast. But in recent months, QVC.com has also given visitors the chance to watch archives of entire shows, and in the coming months visitors will be able to find more video segments from recent shows, featuring individual products that remain in stock.

Bob Myers, senior vice president of QVC.com, said the Web site’s video salesmanship is especially effective when combined with detailed product information, customer reviews and multiple photographs.

About eight months ago, for instance, a customer said that she could not determine the size of a handbag from the photographs on the site because she could not tell the height of the model who was holding it. Within two weeks the site tested and introduced a new system, showing the bags with women of three different heights. The results were immediate: women who saw the new photographs bought the bags at least 10 percent more frequently than those who had not.

Still, Mr. Myers said, video is a critically important element to sales.

“E-commerce started with television commerce,” he said. “The sites who engage and entertain customers will be winning here in the near future.”

Such a prospect is not necessarily daunting to other e-commerce executives. Gordon Magee, head of Internet marketing for Drs. Foster & Smith, based in a Rhinelander, Wis., said a transition to video “will be seamless for us.” The company, Mr. Magee said, has in recent weeks discussed putting some of its product on video “so customers could see a 360-degree view they don’t have to manipulate themselves.”

Because Drs. Foster & Smith lacks a history in video production, Mr. Magee said the company would rely on vendors “who’ll do the video for you and just send you a piece of code to get it on your site. It’ll be an easy switch for most people. And I do think it’ll become a major thing in e-commerce.”

Whether it will be an expensive transition is unclear. In the meantime, Mr. Magee said the company should sustain its customer satisfaction levels as long as it continues to anticipate even basic needs. For instance, he said the company’s customers expect prices on the Web site to reflect what they see in the printed catalog, even though other retailers often post different prices in stores, in their catalogs and online.

“The other approach has the potential to alienate the customer, we think,” Mr. Magee said. “And we actually think this is a cheaper approach, because we’re not keeping track of different prices on the same item.”

While customer satisfaction levels have stagnated, customer service spending among Web sites has not. According to a recent survey by Forrester Research, online retailers this year will spend 32 percent more on customer service than last year — a rate nearly double the expected increase in online sales for the year.

Some businesses, however, have managed to build extensive customer service systems without spending much money — and build them in a way that, they say, improves their overall customer satisfaction levels. Take, for example, Lala.com, the online barter service for CDs and DVDs.

When the company began last year, it did not have enough money to hire an extensive customer service staff. But the site’s founders created online discussion boards to encourage a sense of community among customers. Shortly thereafter, they witnessed customers helping others with problems or questions, and a de facto customer service team was born.

Now, according to Anselm Baird-Smith, one of Lala’s founders, customers find help through so-called guides — a designation earned by a few thousand volunteers who have shown a propensity to answer questions in the forums. Not only do the customers get help, he said, but the volunteers are more loyal to the site than they might otherwise be.

“Those guys like coming to our site, spending a few minutes and contributing,” Mr. Baird-Smith said. “People like being known in their own community.”

Original URL: http://www.nytimes.com/2007/07/02/technology/02ecom.html