Online auction top gun Ebay faces a tough challenge from a new auction network, backed by a host of Internet leaders including Microsoft and Lycos.
More than 100 Web sites, including Dell, [email protected], Lycos and Microsoft's MSN, said Friday they will share auction listings, creating a massive auction network that will challenge the dominance of Ebay.
The network will reach around 46 million individual Web users, according to Massachusetts based Fairmarket, the company running the network. Microsoft, [email protected] and Ticketmaster Online-Citysearch will also make minority investments in Fairmarket.
"Microsoft, [email protected] and Ticketmaster Online-Citysearch have become our latest customers and we're announcing a network with all our customers which gives us the largest distribution on the Web," Susan Zaney, vice president of marketing at Fairmarket told VNU Newswire.
Fairmarket has more than 100 customers, which it charges a $10,000 annual hosting fee and takes a cut of each transaction, generally between two per cent and three per cent of the item price.
The new network will have no individual branding. Instead, customers will see the branding of each individual Web site. Fairmarket itself will have no Web presence.
"We hope every Microsoft and [email protected] user goes to an auction where they feel comfortable and stay on their portal site and use the additional auction facility," said Zaney.
Fairmarket was reluctant to talk about the impact the network will have on Ebay, but stressed that it would make it easier for smaller companies to compete with the auction giant.
"Ebay definitely has the first move advantage, but smaller stand alone sites are going to find it a whole lot easier to drive traffic than if they were a stand alone site," said Zaney.
Zaney questioned whether any individual brand could emerge as a strong competitor to Ebay.
"Anyone else will have a really hard time," she said.
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