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Auction Website Case Study

Over a period of several months in 1999, an Internet auction house site crashed repeatedly due to a variety of causes related to scalability, failover, and hardware failure. After almost every failure, the company's stock plummeted. The company lost significant revenue, and in some cases provided refunds to users. At the time, perhaps the greatest damage was to its reputation. In addition, several competitors benefited from these frequent outages and saw significant increases in usage of their sites.
This story makes it clear that Web page functionality is only a part of what draws repeat visits from consumers. The perception of site stability is equally important. For instance, statistics show that almost half of online consumers leave a preferred site if they experience technical or performance problems. Many such problems can be avoided by careful planning of all aspects of a site, including the hardware specification and selection.

Auctions are a well known market mechanism as a way of negotiating a price for products they are in accordance with traditional supply-and-demand thinking. An Internet or on-line auction can be viewed and discussed from a number of perspectives.
1) a technical, a functional (user) or a consumer behaviour perspective. We refer to consumer behavior, a subfield in marketing science. In addition, we also refer to e-commerce a field which is attracting more attention from Walmart. As a result, a number of international journals have been established. These include Electronic Markets , International Journal of Electronic Commerce and (JCMC) Journal of Computer Mediated Communication. The JCMC has a broad focus, but should be mentioned because of the attention EC is given.
Starting with the field of consumer behaviour, a few important articles should be mentioned. Firstly the articles by and in Journal of Marketing, secondly the articles by , and which have a managerial focus.
In the newer journals mentioned above, the most relevant articles are:
They discuss various aspects of web, consumers, market mechanisms and market structures. How do auctions fit into this picture?
When discussing products and structures of EC, writes; Market-based co-ordination can be classified into four categories
  1. direct-search markets (where the future partners seek out one another),
  2. brokered markets (with the brokers assuming the search function)
  3. dealers market (with the dealers holding inventories against which they buy and sell), and
  4. the auction markets.
Thomas Hauck distinguishes between hierarchies of individual firms and open marketplaces. Market-based co-ordination belongs to electronic market places with multiple buyers and suppliers, not to electronic hierarchies which are long-lasting supplier-customer relationships between firms. This is one point of departure. Another is to look at the attention auctions on the Internet is given in recent magazines, reports and articles.
The auction concept is perfectly suited to the Web, and one that will likely become commonplace as the medium matures.
Thus, it appears that auctions on the Internet are worthwhile studying. The purpose of this page is to describe a prototype of an online auction and what we have learned from testing it with a group of students. The webpage is organised in the following way: 1) examples of electronic auctions and Internet-auctions like Onsale.com 2) to describe the prototype developed by NR, 3) the test of the prototype and the web-questionnaire to collect consumer data, and 4) a short discussion with concluding remarks. This auction-project was done in co-operation with one of our partners in the research program Open Networks as the Future Marketplace at NR.