Going once going twice (page 1 of 2)

By CARL GIBEILY BEIRUT

One of the biggest web crazes of the last couple of years has been person-to-person auctions. More people than ever are flocking to eBay, Yahoo! and dozens of other auction sites and are turning that junk in their attics into cold hard cash (or exchanging it for new junk). Allowing customers to sell to one another is, at least in theory, a path to easy money. That's the beauty of being a middleman, and that's why the eBay model has being duplicated widely around the globe.

In practice, though, the equation is far from straightforward. "Arab startups read up on the theory and believed there would be an online fervor that they could cash in on," says Degaulle Azar, the deputy general manager and Internet analyst with Bond Communications. "With hindsight, they've come to the cold realization that they were quite wrong."

Hoping to emulate eBay's success, Lebanon, for instance, had two online auctioneers: Mazadi, part of E-commerce's family of companies, and el-Mazad. Both were looking for a piece of the auction market. Except that - and here lies the flaw in their calculations - the Lebanese e-commerce market is not booming and Lebanese surfers alone cannot sustain a Lebanese auctioneer.

Mazadi, launched last year, is all but dead with product lists that are down to an embarrassing cipher in every category. "We've had to abandon in the face of the stiff competition from el-Mazad," concedes Mazadi's general manager, Walid Hanna. "We just didn't have the advertising budget to make it a winner." The irony is that Mazadi sold its auction software at - you might have guessed - the auction giant eBay.

El-Mazad adopted the auction format several months after Mazadi, coming online in May 2000 with 18 categories that ranged from books to consumer electronics to toys. "I want el-Mazad to be the best place to sell anything," says Walid Tamari, el-Mazad's general manager. "The marketplace is what we focus on, the exchange between buyers and sellers; most others focus on being a shop or a collection of shops."

Both that optimism and an advertising campaign that included radio and billboard plugs has helped to attract surfers. The auctioneer has some 4,500 registered users, up from the 2,300 who rushed to the site at launch, but still a trifle when compared with the 10 million users who regularly consult eBay. And el-Mazad is still having problems generating enough revenue from its middleman fees to be called a success.

And other than internal organization, any purely Lebanese site will also have to face stiff regional competition that is trying to get in on the auction game, like MazadMaktoob.com and Kunoozy.com, a subsidiary of AtArabia.com Inc.

On target. Where el-Mazad's efforts have been national, both MazadMaktoob and Kunoozy target a wider Arab community by creating country-specific vertical exchanges and by bringing together multiple buyers and sellers either in consumer-to-consumer, B2C or B2B relationships in the Middle East.

Users in the region can buy and sell their items in various categories that are broken down by individual countries in the Middle East region - Kunoozy's country-specific auction sites include the UAE, Saudi Arabia, Bahrain, Kuwait, Egypt and Lebanon; MazadMaktoob adds Jordan, Syria and the North African countries to Kunoozy's list.

And unlike el-Mazad, both have gone for the global strategy by creating fully bilingual, English/Arabic platforms, thus - so the theory goes - opening themselves up to millions of consumers for both the Arab and Arabophile markets.