Auctions on the Web Presented By (in order of presentation) Frank TrovatoPayman Mahjoory Sara...

Auctions on the Web

Presented By(in order of presentation)

Frank Trovato Payman Mahjoory

Sara Radgens Mike Malia

Dan Muzich Rob Randel

Agenda

• Web Page

• Financials

• Merchant-to-Person Auctions

• Person-to-Person Auctions

• Case Study

• Conclusion

Financials

Sara Radgens

Comparison of Financial Data

eBay Onsale uBid

2Q Revenues (mil) (2) 38.18 81.38 45.59 2Q Net Income / (Loss) (mil) (2) 4.29 (11.84) (5.16) Shares Outstanding (mil) (1) 125.20 19.60 9.15 Stock Price (1) 92.88 13.75 18.44 Market Capitalization (mil) (1) 11,628.00 269.50 168.70

(1) As of August 5, 1999

(2) Preliminary figures for the three months ended June 30, 1999

Comparison of Closing Stock Prices

Survey ResultsYes No

Visited an online auction site? 11 04

Placed a bid at an online auction site? 03 12

Purchased from an online auction site? 02 13

Amount range $50 -$100

Age - 18 or under 1

19 - 29 4

30 - 39 9

40 - 49 0

50 and over 1

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

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- www.internetauctionlist.com 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 > 10000

eBayRatingSystem


User Profile from Yahoo!


• 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.


• 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?

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0 10 20 30 40 50 60

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?

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0.1

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0 10 20 30 40 50 60

Case Study: Results

Rob Randel

9:00 AM Express Auction

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

$160.00

9:00 9:05 9:10 9:15 9:20 9:25 9:30 9:35 9:40 9:45 9:50 9:55 10:00 10:05 10:10


$0.00

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

$400.00

$450.00

$500.00

10:00 10:05 10:10 10:15 10:20 10:25 10:30 10:35 10:40 10:45 10:50 10:55 11:00 11:05 11:10


$0.00

$100.00

$200.00

$300.00

$400.00

$500.00

$600.00

11:00 11:05 11:10 11:15 11:20 11:25 11:30 11:35 11:40 11:45 11:50 11:55 12:00 12:05 12:10

Sum of All Items

$0

$5 00

$1 ,0 00

$1 ,5 00

$2 ,0 00

$2 ,5 00

$3 ,0 00

$3 ,5 00

0 :00 0 :05 0 :10 0 :15 0 :20 0 :25 0 :30 0 :35 0 :40 0 :45 0 :50 0 :55 1 :00 1 :05

9 :00

1 0 :00

1 1 :00

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

Item Winning Bid Web/Mail Order Price(s) SavingsADI ProVista E40 15" Color Monitor, Up to 1280x1024, 3 Year Warranty (New)

$120 $149 $29

128MB, PC100, 8ns, 168-Pin, SDRAM, DIMM Module (New) $91 - $101 $87 -$4 to $14

Yamaha CRW2216E Internal EIDE CD-RW Drv, Read 16x /Write 2x /Re-Write 2x (New)

$136 $164 $28

AIWA TD-A8000, Travan-4 8GB Internal ATAPI Tape Drive (New) $43 $183 $140

Fuji MX700 1.5 Million Megapixel Camera w/2X Zoom, 2" LCD & Free Floppy Adaper (NEW)

$406 $415 $9

64MB, PC100, 8ns, 168-Pin, SDRAM, DIMM Module (New) $51 $44 -$7

SyQuest SparQ 1GB External Drive, Parallel Port, FREE Cartridge, PC (New)

$91 $135 $44

Toshiba SD2109 DVD Player w/ DTS & Dolby Digital Output & Picture Zoom (NEW)

$251 - $261 $260 -$1 to $9

JVC GR-AX730U VHS(C) Camcorder w/ Color Viewfinder, 22-1 Zoom & Built-In Light (NEW)

$221 $337 $116

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?

Auctions on the Web Presented By (in order of presentation) Frank TrovatoPayman Mahjoory Sara...

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