Yahoo Auctions is free as of today, no listing or closing fees.
Both Amazon and Yahoo should make their auctions free or near free. Auctions are not that much different than newspaper classifieds. As Craigslist has shown, the classified advertising market is ripe for disruption. Amazon and Yahoo have a similar opportunity in online auctions.
The only quibble I have with Yahoo's move is with eliminating the listing fee. I think you want the pricing structure to encourage sellers to list quality goods at reasonable prices. If the listing fee is zero, that might encourage people to list huge piles of crap at absurd prices. If the listing fee is small but not zero (and, perhaps, refunded if the item sells), it discourages sellers from listing items that won't sell.
Update: About two years later, Yahoo gives up and shuts down Yahoo Auctions.
Unfortunate. I still think eBay could have been defeated, but just making the auctions free isn't enough. All that does is guarantee that the listings will be filled with crap.
I suspect a more successful strategy might have been closer to what I suggested in my post "Kill eBay, Vol. 1". Focus on dominating specific verticals like music or electronics. Make deals with liquidators to ensure that there always are good deals on the site.
See also my April 2006 post, "Early Amazon: Auctions".