We were somewhat surprised to see the auction site, eBay.com, take first place in one measurement of Web popularity, total number of minutes logged at the site during the month of February, at least for males. Number one for females was Pointcast.

Online auctions are becoming a major retailing opportunity on the Internet with eBay alone delivering eight million page views per day as users bid on 368,000 items on the block. How could a bank become involved in this phenomenon? We see four ways:

1. Handling the funds flow and acting as an escrow agent to protect both buyers and sellers

2. Hosting the auction on the bank’s server. Auctions could be open to all buyers and sellers, or limited to charitable fund-raisers (see #30).

3. Setting up a co-branded site with an existing auction company such as Cendent’s NetMarket.

4. Setting up deposit auctions where bidders post the minimum interest rate they would accept on a given deposit, with the low-bidder winning the right to deposit funds at that rate. We’ll expand on that idea in a future OBR.

The software necessary to operate an auction is readily available from OpenSite www.onsite.com which is currently in use at 70 Web sites, and others. We found
33 providers listed on Yahoo! (search for “auction software”) with prices as low as $20/mo for complete auction hosting, or $395 for turnkey auction software.