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Technology Stocks : OnSale Inc. -- Ignore unavailable to you. Want to Upgrade?

To: neverenough who wrote (2288)	12/4/1998 1:50:00 AM
From: neverenough	Respond to of 4903

Dec 03, 1998 All Crowded on the Auction Front By Suzanne Galante Staff Reporter SAN FRANCISCO -- When uBid is offered to the public market this week, it's almost certain to get an obscenely warm welcome. After all, as eBay (Nasdaq:EBAY - news) and Onsale (Nasdaq:ONSL - news) have found, the online auction market is popular with investors and online customers alike. But that very popularity may become uBid's undoing later on. The field of online auctioneers is a little too popular with homesteading start-ups -- and the market isn't big enough for them all. After all, the barriers to entry are tiny. If you've got something to sell, whip up a Web site and put out a press release. Dealdeal.com did, touting its "enormous" auction site last week. Demand for uBid is already high. Shares of its parent, direct marketer Creative Computers (Nasdaq:MALL - news) , have risen sevenfold in recent weeks, partly because Creative will divest itself of its ownership in uBid to stockholders and partly because online auctions are hot shares to hold these days. As early as Friday uBid is expected to offer 1.58 million shares at $13 to $14 a share. While the buzz surrounding online auctions will help uBid's IPO today, it will also draw new competitors in the future. "A valid criticism of some Internet companies is that the barriers are not insurmountable for any new entrant," says John Leo, a portfolio manager who owns eBay in his Northern Technology (Nasdaq:NTCHX) fund. "And that would be true of online auction or online retailing in general." Leo sat in on uBid's roadshow and says he hasn't decided whether he'll get in. UBid's auction offers excess merchandise, including close-out and refurbished products, directly to users. Product offerings include computers, consumer electronics and home gadgets like rice cookers and juicers. In other words, it's a direct competitor to Onsale -- a company that had third-quarter revenues nearly four times as big as uBid's. And there aren't many niches left that uBid could dominate. In addition to uBid's range of products, Onsale auctions off sporting goods, vacation packages and furniture. Egghead.com (Nasdaq:EGGS - news) is in the business of selling refurbished goods. And eBay brings individual buyers and sellers together. "There is a lot of competition out there, and uBid has a very narrow niche," says Steven Tuen, director of research at IPO Value Monitor. "They don't have a unique story at all." But the competition doesn't end there. Some of the portals are expanding their offerings with auction sites of their own. Yahoo! (Nasdaq:YHOO - news) launched Yahoo Auctions in September through a deal with Onsale. The Internet Shopping Network has its own auction site called First Auction. WebAuction, the auction site of MicroWarehouse, also sells new and refurbished goods. And there are countless others. Yahoo's Web directory lists more than 100 auction sites, offering everything from celebrity doodles to boats once owned by the late Romanian dictator Nicolae Ceausescu. In addition to competing with other auction sites, these companies also go up against America Online (NYSE:AOL - news) , a powerhouse in online commerce that offers access to auctions to its 13 million members. In addition, many PC manufacturers are selling directly to customers. At Dell (Nasdaq:DELL - news) , Internet sales made up about a fifth of its $4.8 billion in revenue in the September quarter. © 1998 TheStreet.com, All Rights Reserved. -------------------------------------------------------------------------------- See TheStreet.com's full site for more of its unique insider's perspective on Wall Street. Try a 30-day subscription for free! -------------------------------------------------------------------------------- Archives: [ Wed Dec 2 \| Tue Dec 1 \| Mon Nov 30 \| Fri Nov 27 \| Wed Nov 25 \| more ] -------------------------------------------------------------------------------- Enter one or more ticker symbols, or you may look up the symbol by company name. BasicDayWatchFundamentalsDetailed QuotesChartResearch -------------------------------------------------------------------------------- Copyright © 1998 Yahoo! All Rights Reserved. Copyright © 1998 TheStreet.com, Inc. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written permission of TheStreet.com Inc. See our Important Disclaimers and Legal Information. Data is provided for informational purposes only, and is not intended for trading purposes. Yahoo and Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. Questions or Comments?