Internet auctions

Internet was invented and designed during the Cold War in 1957 as a military response by the US President Dwight Eisenhower to the first satellite sent to space by the Soviet Union, Sputnik I. Its main proposes was to create a countrywide communication network to protect the US against a space-based nuclear attack. A special computer called an Interface Message Processor was developed to realizethe design, and the first Internet communication took place in early October 1969 between Leonard Kleinrock’s research center at the University of California at Los Angeles, and Douglas Engelbart’s center at the Stanford Research Institute. After this great discovery and several modifications, the Internet became a worldwide network, which exploded after 1990 managed by independentorganizations, causing a revolution in our modern society.

The early Internet was used only by computer experts, scientists, librarians, and engineers. There were no home or office personal computers, and people who wanted to use it would have to learn complex systems. Today, Internet is part of a person’s daily life, not only as a communication and social media, but also as a commerce and economicsource. Internet has over passed and even broken, social frontiers, long distance communication problems and even international commerce boarders. Old ways of social interaction and business managing are being mainly affected by this new revolutionary wave, that has put everyone, individuals and legal entities into a continuous challenge of modification and renovation.

Online sales havegrown rapidly for such products, as books, music CDs and computers, but the profit margins are slip when price comparison is so easy, and public trust in online security is still shaky. Business models that have worked well are portal systems that try to provide everything for everybody, and live auctions. On the other hand, some other business with higher standard quality and therefore higher priceshas found a complicated confrontation in the Internet market. High standard auctions, such as Christie’s and Sotheby’s have found a huge competition in the e-commerce, specially with the well known webpage EBay, the largest Internet auction firm which controls 80% of the market.

EBay was founded in September 1995 by Pierre Omidyar living room in San Jose. From the very start was meant tobe a marketplace for the sale of goods and services for individuals. In 1990, Pierre and his cofounder Jeff Skill brought in Meg Whitman to sustain the success they have created. Meg had studied at the Harvard Business School and had learned the importance of branding at companies such as the big company Hasbro. Meg culled her senior staff from companies such as Disney and PepsiCo and created anexperienced management team with an average of 20 years of business experience and built a strong vision for the new company. EBay is a company that’s in the business of connecting people, not only selling them things. They quickly shed the image of only auctioning collectible and moved into an array of upscale markets where the average sale price is higher. The average sale price is the keymetric in determining eBay’s transaction fees, so increasing the average sale price became an important item. By forging partnerships with name brands such as GM, Sun and Disney, EBay has manager to do exactly that. Sun has sold $10 million worth of equipment and it now lists between 20 and 150 items per day.

Sotheby’s and Christie’s have confronted this new challenge by creating their ownWebPages during 1999: www.sothebys.com and, www.chrisities.com. In defiance of important money investment by both successful and important auction houses, e-auctioning expensive art was not at all successful. Therefore both houses adjusted their focus to middlebrow products. Sotheby’s even started its second online venture specialized in lower-priced auctions partnered with Amazon which didn’t work...