"Auction Site" Swoopo got $44800 for a $2500 computer. See comments for explanation

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.<p>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?

Looks like the system is guaranteed to make money on at least some items... for example:<p><a href="http://www.swoopo.com/auction.html?cm_re=Homepage-_-Grid-_-1%2f5%2fLink&#38;aid=177443" rel="nofollow">http://www.swoopo.com/auction.html?cm_re=Homepage-_-Grid-_-1...</a><p>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).

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.

What do you think is critical mass for making something like this profitable?<p>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)<p>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.<p>If anyone's interested in helping, I'm listening.

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.<p>$44800 computer: 58950 bid were placed, at 75 cents each that's $44212.50 + the final price $589.50 for a total of $44802<p>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. <a href="http://blog.jimmyr.com/Auction_site_Swoopo_a_scam_or_a_bargain__13_2009.php" rel="nofollow">http://blog.jimmyr.com/Auction_site_Swoopo_a_scam_or_a_barga...</a>