Woburn, Massachusetts-based FairMarket Inc. is teaming up with Microsoft, Dell, Excite@Home and other e-commerce portals to stage an all-out attack against eBay, Inc., the reigning online auction champion.
Starting Monday, the privately-held FairMarket will administer a network of more than 100 auction Web sites. This arrangement means that an antique for sale on Microsoft will automatically be posted on Lycos and Excite as well. The company already operates an auction network for Lycos, Dell and CompUSA.
In an interview with the E-Commerce Times, FairMarket CEO Scott Randall declined to talk about specific deals that FairMarket cut with different portals, but did say that the company typically charges a $10,000 (US$) monthly fee for auction hosting. In addition, he added that FairMarket also receives a cut of the every sale made — which can range from 1 to 3 percent.
Why FairMarket?
FairMarket has grown by leaps and bounds since the beginning of 1999. “We grew from 10 employees to more than 100,” Randall explained.
Randall went on to add that this rapid growth put FairMarket in an ideal position to lead the charge against eBay. “We already had the infrastructure in place,” he said.
Can eBay Be Beat?
Although the network is made up of some huge e-commerce players, it will still have its work cut out for it. For instance, FairMarket estimates that it will launch with 70,000 auction listings. By contrast, eBay has more than 3.5 million auction listings.
Nonetheless, the biggest hurdle the alliance will have to overcome is eBay’s brand recognition. Observers point out that online auctions and eBay have become synonymous.
Despite this problem, Randall believes that the network can make significant inroads into eBay’s market.
“There’s always new people coming online,” he said. “By making seamless online auctions part of their offering, sites within the network will capture that business.”
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