<MLRE>
Interesting reading on the supposed direction of the company.
herring.com
By Greta Mittner
Red Herring Online
January 26, 1999
Attention, discount shoppers: take a hike. Robert "Rusty" White, the president and CEO of Millionaire.com, is only looking for the big spenders for his new upper-crust auction Web site.
The Millionaire.com site, which will debut early this year, will provide users with access to the company's live auctions and allow certain highly regulated Dutch auctions.
Mr. White, best known for creating the Robb Report -- a magazine that caters to those living a "luxury lifestyle" -- brought his new multimedia company Millionaire.com to market in early December as an over-the-counter stock (ticker symbol: MLRE) on the NASD, despite the fact that the main attraction, the Web site, was far from completed.
But to leverage the market's hunger for .coms, Millionaire.com's Web site will be the focus of this new company, supported by its four offline auction houses and Millionaire, the magazine.
ONLINE BENEFITS
All aspects of the Millionaire.com parent company will be focused on selling luxury products to a demographic that matches that of The Robb Report readers (i.e., the extremely rich). Auctions held by the company's individual auction houses, including The Global Emporium in South Carolina, Great Gatsby's Auction Gallery in Georgia, and the New Orleans Auction Galleries and St. Charles Gallery in Louisiana, will be accessible through the Web site.
"The site will be open to [people who] may not be able to make it to Hilton Head," says Mr. White. Perhaps they have plans with Melinda and Bill that night.
Millionaire.com claims the company's offline auction houses make a total of approximately $30 million a year in revenue, and Mr. White expects the figure to be greatly improved by adding access to the auctions through the Web site.
"Our experience has not been with the Internet, but when we send catalogs out and have phone bidders, the bids are historically higher," says the CEO. He believes that the added capabilities of the Internet will attract even more customers. Customers will be able to not only see photographs and descriptions of the items, but will also be able to follow real-time bids and either place bids online or phone them in.
AN INTERNET ELITE?
Jupiter Communications's latest figures for online auction market growth indicate a ripe environment for Millionaire.com's success. Jupiter projects that online auction purchasers in the U.S., in business-to-consumer auctions alone, will grow from 1.2 million in 1998 to 6.5 million in 2002. Moreover, it claims that in the next four years, $7.1 billion will be spent in online auctions.
Despite these encouraging figures, Ryan Jacob, portfolio manager for The Internet Fund, remains skeptical that the niche market to which Millionaire.com caters is developed enough to sustain this model at the present time.
While Mr. Jacob agrees that the Internet can be a very effective distribution channel for auctions, he thinks it may be three or four years before the demographic profile on the Web will support an auction site solely for the very rich.
Sotheby's may have felt likewise. Instead of offering the higher-end products of its traditional offline business, the company decided to sell lower-end items, which are mainly expected to sell for under $5,000, on its upcoming online auctions on sothebys.com Web site.
Nicole Vanderbilt, an analyst with Jupiter Communications, applauded this decision. "Making their site more accessible was a wise move," says the analyst.
But while Mr. White tips his hat to Sotheby's, remarking on its "phenomenal reputation," he did not appear to share any apprehensions about finding a market for his highest-priced items online. "Yes, there is a high demographic who stare into their computers every day," he asserts.
Moreover, while Millionaire.com will have to start from scratch in building a brand, it will not have to struggle with some of the branding difficulties that Sotheby's may encounter in its attempt to run two different auction models under one name.
PORTAL OR AUCTION SITE?
Mr. White is also planning to make Millionaire.com the online portal for the rich. "They will not have to leave to see what their stocks are doing today," says the CEO. "They can get their stock quotes, investment advice, and sports news."
But Ms. Vanderbilt suggests that it will take more than convenience to entice millionaires. "The key is to pique interest," says Ms. Vanderbilt. "Millionaires do not seek convenience. They generally get that by having someone else do it for them."
Perhaps they can still hire someone to point and click.
Scheduled to launch early this year, Millionaire.com's Web site will also cater to very select advertisers. Millionaire.com plans to serve targeted ads through the use of site registrations that are intended to track the site's user preferences. While Mr. White did not disclose the amount the company invested in the site, he did say it was enough for a top of the line production.
"The bills tell me it is," says Mr. White. "It better be." |
