Excite, MSN back new UK auction network

Competition among European auction websites has been further intensified by the arrival of another US auction network into the UK.

US online auction portal The FairMarket Network has agreed deals with UK portals Excite, MSN, Virgin Net and News International's auction site, FiredUp.com. In the US, FairMarket provides auction facilities for 90 portals and other business-to-consumer websites.

The firm's hosted auction, fixed price, falling price and shopping-by-request technology has already been added to Excite.co.uk, with MSN and Virgin.net expected to launch within weeks.

When complete, the UK network will be a collection of corporate and community auction sites connected by a single database. For example, a shopper looking for a Dell computer on one portal will also be shown merchandise from Dell's auction site and person-to-person listings from the rest of the network.

Scott Randall, chief executive of FairMarket, said: "Our networked commerce model has proven to be very successful in the US and includes some of the leading merchants and portals in the world.

"We look forward to serving the UK market as we continue to build the strongest auction and dynamic pricing environment for consumers and businesses on the web."

FairMarket enters a field dominated by the European activities of eBay and the increasingly aggressive pan-European operation QXL Ricardo. Whereas eBay generated revenue of $85.7m in its most recent financial quarter and QXL Ricardo around £20m, FairMarket has some catching up to do as it posted revenue of only $2m.

Small fry at the moment perhaps, but some analysts believe that auction sales will eventually make up a significant proportion of all online sales, and FairMarket's deal to supply familiar name portals with auction facilities puts it in a potentially strong position.

The stakes are high. Analysts at Forrester Research predict that US sales alone may be worth $19bn by 2003, which would account for more than 13 per cent of all US online retailing revenue. Allowing for the usual 12 to 24-month time-lag for the UK market to catch up, it could mean significant auction traffic in Europe within five years.

Indeed, interest among UK internet users is already on the rise. By last November, although only two per cent of UK internet users had bought or responded on auction sites, Forrester said 14 per cent had browsed them. QXL Ricardo, for example, has more than one million registered users.