Title: Strategies for Web Auctions, Virtual Communities, and Web Portals
1Chapter 10
- Strategies for Web Auctions, Virtual Communities,
and Web Portals
Electronic Commerce
2Objectives
- Key characteristics of major auction types
- Strategies for general and specific consumer Web
auction sites - Strategies for business-to-business Web auction
sites - How businesses use virtual communities to
increase brand awareness and sales - Strategies for Web portal sites
3Objectives
- Key characteristics of the six major auction
types - Strategies for general and specific consumer Web
auction sites - Strategies for business-to-business Web auction
sites - How businesses use virtual communities to
increase brand awareness and sales - Strategies for Web portal sites
4Objectives
- How businesses use virtual communities to
increase brand awareness and sales - Strategies for Web portal sites
5Auction Basics
- Earliest known auctions were in Babylon around
500 B.C. - Entire Roman Empire was auctioned in 193 A.D.
after the death of Emperor Pertinax - Buddhist temples held auctions to sell the
possessions of deceased monks - Auction firms Sothebys and Christies began in
the 17th century
6Auction Basics
- English Auctions
- Bidders publicly announce their successively
higher bids until no higher bid is offered - Minimum price can be used to set the price at
which the auction will begin - Reserve price is the minimum price the seller
will accept - Yankee Auctions
- Allow the bidder to choose the quantity of
multiple items offered at the auction
7Auction Basics
- Dutch Auctions
- Form of open auction in which bidding starts at a
high price and drops until a bidder accepts the
price - Usually the seller offers a number of similar
items for sale - Good for moving large numbers of commodity items
quickly
8Auction Basics
- Sealed-Bid Auctions
- Bidders submit their bids independently and are
usually prohibited from sharing information with
each other - First-price sealed-bid
- Highest bidder wins
- Second-price sealed bid
- Highest bidder wins, but at the second-highest
bidders price - Encourages all bidders to bid their private
valuations, reducing collusion
9Auction Basics
- Double Auctions
- Buyers and sellers each submit combined
price-quantity bids to an auctioneer - The auctioneer matches the sellers offer (lowest
price, then up) to the buyers offers (highest
price, then down) - New York Stock Exchange conducts sealed-bid
double auctions of stocks and bonds
10Six Major Auction TypesFigure 10-1
11Web Auction Strategies
- 1999 PC Computing magazine survey reported that
37 of people responding had made purchases and
12 had sold items using an on-line auction
service - 15 of the surveys respondents stated that they
would never use an on-line auction site - Analysts and researchers predict the on-line
auctions will account for 30 of all e-commerce
by 2002
12General Consumer Auctions
- eBay
- Search for specific items
- Browse by categories of items
- Seller options include bold-face type and
featured listings - Rating system to provide feedback to alleviate
fears concerning seller reliability - Must build trust Just in Time Trust
13eBay Home Page http//pages.ebay.co.uk/help/basics
/n-index.html
14Additional General Consumer Auctions
- Auction Universe, owned by Classified Ventures, a
partnership of eight major newspapers - Apartments.com
- Cars.com
- NewHomeNetwork.com
- Yahoo! and Excite have created auctions based on
the eBay model
15Excite Auctions Home Page http//auctions.excite.c
om/
16Additional General Consumer Auctions
- Amazon.com
- Offers Auctions Guarantee to reimburse any
buyer for merchandise purchased that was not
delivered, or materially different than
represented - Provides escrow service for items over 250
17Dutch Auctions http//www.excite.co.uk/directory/S
hopping/Auctions/Dutch
18Speciality Consumer Auctions
- Technology-related items auction sites
- Haggle Online
- CNET.com
- ZDNet
- Onsale uBid, and Bid.com
- Numerous speciality auction sites
- Golf Club Exchange
- Cigar-Bid.com
19Golf Club Exchange Web Auction http//www.golfclub
exchange.com
20Business-to-Business Auctions
- Typically used to dispose of excess inventory
- Large companies use liquidation specialists to
find buyers for unusable inventory, create their
own auction sites - Smaller companies often sell their excess
inventory to liquidation brokers, who, in turn,
create auction sites
21CompUSA Auctions Home Page www.compUSA.com
22Reverse Auction for Car Parts http//www.covisint.
com/
23Examples of Third-Party Auction Sites
- Auction IT
- Computer equipment
- Going, Going...Sold!
- Laboratory equipment
- FastParts.Com
- Electronic components
- J.R. Metals Quick Bid Auction
- Steel
24Auction-Related Services
- Escrow service
- Independent party holds buyers payment until the
item is received and the buyer is satisfied with
the purchase - Directory of available auctions
- Auction Guide
- Guidance for new auction participants
- AuctionInsider
- Links to auctions sorted by category
25AuctionInsider Directory http//www.auctioninsider
.com/
26Seller-Bid Auctions andGroup Purchasing Sites
- Reverse auctions
- Sellers of goods and services bid the prices at
which they are willing to sell - Group purchasing sites
- Items are posted with a price, as the number of
bids increase, the seller negotiates a better
price with the items provider
27Virtual Community Strategies
- Gathering places for people and businesses that
does not have a physical existence - Usenet newsgroups
- Chat rooms
- Web sites
- Helps companies, customers, and suppliers plan,
collaborate, transact business, and interact in a
mutually beneficial way
28Milpro Business-to-Business Virtual Community
Site Figure 10-8
29Milpro Business-to-Business Virtual Community
Site www.milpro.com
30Web Communities
- WELL
- Whole Earth lectronic Link
- Predates the web, began as a series of dialogs
among San Francisco authors and readers - Purchased by Salon.com
- GeoCities
- Free web space for members
- Sells advertising to generate revenue
- Owned by Yahoo!
31Web Communities
- Tripod
- Similar to GeoCities
- Owned by Lycos
- Theglobe.com
- Created by Cornell University students
- News feeds, art gallery
32Web Portal Strategies
- Combinations of virtual communities, search
engines, and Web directories - Provide a high degree of stickiness that is
extremely attractive to advertisers - Examples include AOL, Excite, Infoseek, Lycos,
MSN, Netscape Netcenter, Snap, and Yahoo!
33Web Portal Strategies
- Typically ask members to provide demographic
information about themselves - Very high potential for targeted marketing
- High visitor counts yield high advertising rates
34Excite.com Portal Home Page http//www.excite.com/
35Summary
- Key characteristics of major auction types
- Strategies for general and specific consumer Web
auction sites - Strategies for business-to-business Web auction
sites - How businesses use virtual communities to
increase brand awareness and sales - Strategies for Web portal sites