DD Part 2
Cause Marketing
Bid.Com endeavours to stimulate charitable E-commerce activity through cross-promotions with entertainment
icons and products that are popular to emerging demographic segments.
Bid.Com has an exclusive contract to host the RADD International Web site (Recording Artists, Actors and Athletes
Against Drunk Driving) until the year 2001. This organization, chaired by David Niven Jr., boasts over 300 tier one
rock artists including Paul McCartney, Elton John, Rod Stewart, KISS and Melissa Etheridge to name but a few.
Bid.Com intends to establish a strong position in the entertainment sector by operating this Web site and the “Rock
Auction” of artist memorabilia, concert tickets and other related products on behalf of RADD.
Bid.Com believes in the strategic targeting of the 18 to 30 year old market demographic for future share growth as
this Internet friendly segment gains increasing purchasing power. Bid.Com hosts the Canadian BACCHUS Web
site, part of an international charity promoting responsible use of alcohol beverages, with over 100 Canadian and 750
U.S. affiliated organizations. Through BACCHUS, poster campaigns for RADD have reached over 3,300 college
and university campuses across North America, with the RADD Web site address displayed prominently on all
materials.
In June, 1997, Bid.Com hosted the Digital City All Charities Online Auction in partnership with Digital Cities Inc., a
community-based Internet content subsidiary of AOL, plus over 50 community groups and six media partners in the
Dallas/Ft. Worth area.
INDUSTRY SIZE AND COMPETITION
Industry Size
The Internet is an increasingly significant global medium for communications, information and commerce.
International Data Corporation ("IDC") estimates that the number of Web users grew to approximately 69.0
million by the end of 1997 and will grow to approximately 320.0 million by 2002. The Company believes that
the growth in Internet usage is the result of a number of factors, including the large and growing use of
personal computers ("PCs") in the workplace and home, advances in the performance and speed of PCs and
modems, improvements in network infrastructure, easier and cheaper access to the Internet and increased
awareness of the Internet among businesses and consumers. Jupiter Communications, estimates that the
number of online households (households using e-mail, the Internet or a consumer online service) will grow
from an estimated 15.2 million households in 1996 to 57.0 million households, representing over 50% of U.S.
households, by the year 2002.
The Company believes that a significant opportunity exists for retailing on the Internet. IDC estimates that
the total value of goods and services purchased on the Internet grew from approximately (U.S.) $296 million
in 1995 to approximately (U.S.) $12.4 billion in 1997 and that sales of goods and services on the Internet will
grow to approximately (U.S.) $426 billion by 2002. Forrester Research Inc. predicts that online auctions
should become one of the dominant applications within the E-commerce sector, with the total value of
products purchased (other than commodities) through independent and private online auctions expected to
grow to approximately (U.S.) $20 billion by 2002.
Competition
The E-commerce market, particularly over the Internet, is new, rapidly evolving and intensely competitive, and the
Company expects competition to intensify in the future. The Company currently or potentially competes with a
variety of other companies depending on the type of merchandise and sales format offered to customers. These
competitors include: (i) Onsale Inc., a leading online auctioneer of new and refurbished computers; (ii) various small
Internet auction houses; (iii) a number of indirect competitors that specialize in E-commerce or derive a substantial
portion of their revenue from E-commerce, including Internet Shopping Network, a wholly-owned subsidiary of
Home Shopping Network Inc. and CUC International Inc.; (iv) a variety of other companies that offer merchandise
similar to that of the Company but through physical auctions and with which the Company competes for sources of
supply; and (v) companies with substantial customer bases in the catalogue business, which may devote more
resources to Internet commerce in the future. |
