Auctions on the Web Presented By (in order of presentation) Frank TrovatoPayman Mahjoory Sara RadgensMike Malia Dan MuzichRob Randel

Agenda Web Page Financials Merchant-to-Person Auctions Person-to-Person Auctions Case Study Conclusion

Financials Sara Radgens

Comparison of Financial Data

Comparison of Closing Stock Prices

Survey Results YesNo Visited an online auction site?1104 Placed a bid at an online auction site?0312 Purchased from an online auction site?0213 Amount range$50 -$100 Age - 18 or under and over1

Merchant-to-Person Auctions Dan Muzich

Business Auctions Business (or “Merchant”) Auction sites have a wide range of scope and purposes. –Most sites aim to offload excess inventory or refurbished stocks of manufacturers. Category started with computer products, whose short product cycles created a lot of perfectly good “distressed inventories”. –Generally, all sites aim to broker a connection between customer and manufacturer.

Market Size of Auctions Ref: The Keenan Report, 10/98 An explosion of opportunity: Predictions: By 2002, 29% (128B) of internet transactions will be conducted under auction format 1997 numbers: Total Internet mkt: 12.9B Auction mediated: 0.58B or 4% 1999

Business to Customer Come in many different flavors and auction styles Started with Computer products and diversified from there to a very wide variety of items. Examples –General consumer products (OnSale.com, Ubid.Com) –Wine (winebid.com) –Travel(Priceline.com) Very short list of what is available- tracks over 200 sites

Similar to person to person, except items are usually much larger in scale and price. Prime example: VerticalNet (the eBay of category) –Serves 35 industry specific business communities. –Water, Power, Chemicals, Food and many more Items for bid range from equipment to services. Another example: AdAuction.com Business to Business

Customer to Business So-called “reverse auction” where customer solicits bids from businesses. Best bid wins. Example –Travel (travelbids.com) You list your itinerary, and travel agents bid against each other to fulfill it.

Person-to-Person Auctions Payman Mahjoory

Person-to-Person Auctions Familiarize yourself with the website Learn as much about the seller as possible Buyer Beware - New Seller/Buyer Feedback profile of 10 to 99 Feedback profile of 100 to 499 Feedback profile of 500 to 999 Feedback profile of 1000 to 9999 Feedback profile of > eBay Rating System

Person-to-Person Auctions User Profile from Yahoo!

Person-to-Person Auctions Fraud Contacting the Seller Escrow Service Price discrepancies from one seller to another Shipping costs Community

Auction Pitfalls According to Fraud.org, online auctions were the #1 source (68%) of complaints in 1998, up from 26% in 1997.

Person-to-Person Auctions Fraud Contacting the Seller Escrow Service Price discrepancies from one seller to another Shipping costs Community

Case Study Mike Malia

Case Study Onsale.com holds “Index Express Auctions” daily from 9:00 AM - 8:00 PM (PST) All Items Start At $1.00 Auctions Last for at least One Hour –Extended until there is no bidding for 5 minutes How will the bid prices look over time?

How are the bids going to go?

Auction Demonstration With Your Host Mike “Auction Master” Malia

Auction Demonstration - Rules Bid starts at $1.00 Minimum $0.50 bid increment Auction lasts at least 60 seconds –Ends when 5 seconds pass without a bid For Auction:One Gourmet “Evening MBA” Dinner

How did the bids go?

Case Study: Results Rob Randel

9:00 AM Express Auction

10:00 AM Express Auction

11:00 AM Express Auction

Sum of All Items

Case Study: Results Not all merchandise offered was new –Most was refurbished Many off-brands were offered The minimum bid increments for some items was too large –Some items sold for less than shipping!!! There appear to be some bargains available to the savvy shopper

Case Study: Price Comparison

Future of Auctions Auctions available for just about product or service imaginable. Advent of broadband will bring “live” and “loud” auctions to the PC. Localized auctions to effectively market goods that are either perishable or too large to ship long distances. Third party certification of big-ticket items. Forrester Research: “Its only a matter of time before every retailer has an online auction.” Latest Example:

Concluding Thought for the Day MBAs for Auction?