The penny auction was invented by Lloyd Liske and William Buckell when the site was first created and known as telebid.com.

The price of bids and the incremental values vary depending on the regional version of the site used.

Once a Bidbutler was active, it would automatically bid in the final 10 seconds of the auction in an attempt to keep the user as the highest bidder.

The money collected by Swoopo consisted of the cost of bids placed plus the final auction amount.

[2][3] The company, responding to claims that Swoopo is a type of gambling, stated that winning auctions involves skill and is not reliant upon chance.

[4] Ted Dziuba writing for The Register stated that Swoopo "does not amount to a hustle, it's simply a slick business plan," and that while it might be close to gambling, "the non-determinism comes directly from the actions of other users, not the randomness of a dice roll or a deck of cards.

[2] Ian Ayres writing for New York Times blog called Swoopo a "scary website that seems to be exploiting the low-price allure of all-pay auctions".

"[7] Speaking to the BBC, Professor Mark Griffiths of Nottingham Trent University, stated that "penny auction" sites in the UK should be regulated by the Gambling Commission.

[8] Speaking to the New York Times, Glen Whitney, a mathematician and a former quantitative analyst at the hedge fund Renaissance Technologies, stated.

When the site is working again, we will add ten minutes to the countdown of live auctions, to allow all bidders the chance to get back on-line and start bidding.