Firms Form Net Auction Venture
Microsoft, Dell Computer and nearly 100 other companies are banding together to challenge EBay Inc.’s dominance of the Internet auction industry by pooling their listings and bids.
Web sites run by members of the new alliance, which also includes the Internet gateway services Lycos and Excite at Home, will share millions of auction listings so that any item put up for bid on one site will appear on them all.
The combined customer reach of the FairMarketPlace alliance could top 50 million a month, dwarfing the 6 million who use industry pioneer EBay.
“Combined, these companies are a force to be reckoned with,” said Rodrigo Sales, chief executive of AuctionWatch.com, which provides services for online auction users. “They have the ability to attract a lot of eyeballs.”
EBay, however, would still have greater scale, with about 3.5 million individual items for sale, which compares with just 70,000 at the combined FairMarketPlace sites.
EBay’s stock tumbled 7% after Friday’s announcement, falling $10.75 a share to close at $141 in active trading on Nasdaq.
FairMarketPlace, which begins doing business Monday, will enable its partners to simultaneously auction all the merchandise listed for sale on their individual Web sites.
For example, a notebook computer put up for bid on Lycos’ auction site would immediately appear as a listing on Microsoft’s MSN.com auction site and Ticketmaster Online-CitySearch Inc.’s site.
A computer maker such as Dell will have more outlets to sell close-out or surplus machines, although like other merchants who sell only their own products online, the Round Rock, Texas-based company will not sell other items on its site.
Other FairMarketPlace participants include CompUSA, online retailer Cyberian Outpost, Fashionmall.com, CBS Sportsline’s sporting goods store, Viacom Inc.’s VH1 music network and ZDNet.
The alliance is the brainchild of FairMarket Inc., a Woburn, Mass., firm that sets up and runs other companies’ auction sites for a monthly fee and a share of each sale.
