Online Auctioneer Outbid Gives Sales a Social-Gaming Twist

online auction gameOnline bargain hunters who also enjoy interactive gaming are in for a treat:, which launched last week, brings together the social interactivity of Twitter, the intensity of an auction house and the vibe of a sports bar.

It's eBay gone dynamic, and highly interactive.

Now, folks who want to liquidate their baseball card collections, hand-knitted tea cozies or that old leather couch will be able to engage in the theatrical gavel-pounding experience online.

Bidders, Be Friends

The auctions are old-school, winner-take-all affairs, unlike penny auction sites, with their high potential for losing money and getting nothing in return. But here's what makes the site different: Bidders and sellers can virtually mingle with each other through live chat -- during the heat of the auction challenge, and the auction itself plays out on audio, with the seller or a designated bidder providing the patter. To further enhance the gaming nature of the site, bidders also earn rewards based on the number of times they bid or for tabling a "Monster Bid," which allows bidders to up the bid dramatically. They can trash talk, egg each other on, or even encourage.

Once the auction starts, an animated countdown clock ticks away like a cinematic time bomb to add tension; additional bids prolong the auction, which prevents last-second sniping by either bidders or bots. Instead, it's up to the auctioneer to bring each auction to a close.

Based in Oakland, Calif., and funded by Copart (CPRT), the world's first online auction site for used vehicles, Outbid allows collectors and craftspeople to purvey their wares in an efficient, competitive environment. Jay Adair, founder of Outbid and CEO of Copart, said he wanted to create a "virtual lemonade stand," where even his kids could sell items and crafts to friends and family. The site can also be used for charitable purposes, to auction off dinner with a celebrity, for example, or to help fund-raise.

"From individual sellers to offline auctioneers who want to recreate the excitement of the auction room online, Outbid transforms online auctions into thrilling live social events," said Outbid CEO Dan Granger, who has more than 30 years of experience with companies including Catalina Marketing Corporation, Ogilvy & Mather Advertising, and The Vons Companies.

The Future of Online Commerce

"This is the trajectory -- e-commerce, social and gamifacation is going to go and hit the sweet spot with the intersection of these things," Granger said. "We did it from the get-go. The sense of urgency in the auction -- that the item will be sold not in two weeks or three days. The social element allows people to engage more closely."

The social and personalized aspect also adds an element of trust into the mix. Bidders create profiles and upload their pictures, so you know who you're trading and competing with -- in contrast to how things play out in many corners of the Internet.

"You have people's pictures, so you can see who they are," Granger said. "There is a sinister part of anonymity on the Internet. This is completely transparent."

Sellers' Paradise

Sellers, meanwhile, can monitor their online auctions as they would at a live event within an auction house.

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"There is the sense of urgency of flash sales," said Bob Lee, chief product officer. "You schedule an auction for when it's the right time for you. It starts at a specific time. It has a specific purpose."

The leaders at Outbid see their platform as particularly well-suited for artists and craftspeople like those on Etsy, offering them a more active role in selling their products.

The Future Of Auctions

Auctions already account for more than $300 billion per year in sales, and live auctions outsell online auctions by a 9 to 1 ratio. Outbid's social and gaming aspects are designed to make the online experience more like the real-world one, helping it make inroads into that much larger market.

Also likely to help it compete: Those live auctioneers take hefty commissions, and right now, Outbid is taking no cut of sales from auctions, though that may change in the near future. Once the site gets some momentum, it may start charging a percentage of each sale.

There is also some talk of implementing a premium model that would allow subscribing members the ability to access certain features, customize their background theme and attend certain private auctions.

The S&P 500's 10 Best-Performing Stocks of 2012 (so far)
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Online Auctioneer Outbid Gives Sales a Social-Gaming Twist

10. CA (CA)

Performance: up 26%

Company profile: CA is one of the largest independent providers of IT management software. Revenue from its core mainframe segment represents about 60% of total sales.

Investor takeaway: Shares jumped late in January after the company reported third-quarter earnings rose 32% and announced plans to raise its annual dividend five-fold to $1.

9. Owens-Illinois (OI)

Performance: up 27% (but still down 20% since the end of 2010).

Company profile: Owens-Illinois is the world's largest manufacturer of glass bottles, with operations in 21 countries.

Investor takeaway: For 2011, the company earned $2.37 per share versus $2.60 in 2010. However, it also took a $640 million charge for a variety of reasons in the quarter that resulted in a loss of $4.71 per share on a GAAP accounting basis. It is covered by two analysts, resulting in ratings of one "buy" and one "hold."

8. Freeport-McMoRan Copper & Gold (FCX)

Performance: up 27% (but still down 23% since the end of 2010)

Company profile: Freeport-McMoRan's mines produce more copper and molybdenum than any other company in the world. It also produces gold.

Investor takeaway: Metals mining have historically been highly volatile. Analysts give Freeport-McMoRan eight "buys" and one "hold," according to Morningstar. Two weeks ago, the company reported that fourth-quarter net profit was $640 million, down from $1.5 billion in same period of 2010, but full-year earnings hit a record $4.6 billion.

7. Bank of America (BAC)

up 29% (but still down 47% from year-end 2010)

Company profile: Bank of America is one of the largest financial institutions in the world, with lending operations in the consumer, small business, and corporate arenas as well as asset management and investment banking divisions. It just reported net income of $85 million, or 1 cent per share, for 2011, roughly in line with analysts' expectations.

Investor takeaway: The bank faces lots of challenges before it returns to solid fiscal health, but investors apparently think they can be met, given the share-price rise. It was trading at half of book value late last year, so investors may think it hit bottom.

6. Eastman Chemical (EMN)

Performance: up 30%

Company profile: Eastman Chemical is a global producer of chemicals, plastics and fibers, with manufacturing sites in seven countries.

Investor takeaway: During January, the company announced the $4.7 billion acquisition of Solutia (SOA), another chemicals and plastics-making firm, which may have contributed to the price pop. Although it has a diverse international customer base, some of its biggest customers are in the cyclical auto and construction industries. S&P has it rated "buy" and its $60 price target is a 20% premium to the current price.

5. LSI Corp. (LSI)

Performance: up 30%

Company profile: LSI is a maker including of specialized circuits that support applications in enterprise storage and networking.

Investor takeaway: Although it reported a fourth-quarter loss two weeks ago, LSI gave an upbeat outlook for the current quarter, saying it expects revenue in the range of $550 million to $590 million, far ahead of analysts' $511 million, according to data from FactSet Research. S&P's review of analysts' ratings found six "buys," two "buy/holds," five "holds" and one "weak hold."

4. First Solar (FSLR)

Performance: up 31% (but still down 66% from year-end 2010)

Company profile: First Solar manufactures solar modules and turnkey solar systems. It has a competitive advantage due to its technology.

Investor takeaway: The company likely got a boost when, late in January, the MidAmerican Energy unit of Warren Buffett's Berkshire Hathaway (BRK.B) said it has started a new company to oversee a variety of solar, wind and other renewable-energy projects. In December, MidAmerican said it would buy a $2 billion California solar farm from First Solar, lending support to the outlook for the whole industry.

3. Sears Holdings (SHLD)

Performance: up 39% (but still down 40% from year-end 2010)

Company profile: Sears Holdings is the parent to Sears, Sears Canada and Kmart stores and the fourth-largest retailer in the U.S.

Investor takeaway: This troubled stock rose on speculation that its primary shareholder, hedge fund manager Edward Lampert, may seek to take it private. Everything else seems to be going against Sears, including steadily declining earnings, but it does generate significant cash flow, which it has used to buy back shares and pay down debt. But a Morningstar analyst recently wrote that "we don't forecast much growth for Sears, but we do see the potential for a marginal improvement in operating results in 2013-2014 if the appliance market can rebound off current lows."

2. Textron (TXT)

Performance: up 39%

Company profile: Textron's wide-ranging business interests span the aerospace, defense, financial and industrial markets. Its Cessna is the leader in business jets, while its Bell unit is a popular maker of helicopters.

Investor takeaway: Textron is in many cyclical businesses and its defense sector is vulnerable to Congressional budget cutting. For 2012, its management is targeting an 11% improvement in sales, driven by further gains at Cessna and Bell, and $1.80 to $2 per share in earnings, about 35% to 50% higher than 2011's adjusted earnings. Since the end of 2010, its shares are up 8%.

1. Netflix (NFLX)

Performance: up 77% (but it's still down 29% from the end of 2010).

Company profile: Netflix operates a fast-growing DVD rental and video streaming service and its customers are transitioning from DVDs to digital streaming content.

Investor takeaway: Down 60% in 2011 after gaining 219% in 2010, this stock is not for the faint of heart. Recent moves by the management team, specifically trying to raise rates by a huge amount, have added uncertainty to what is already a challenging market for the company as digital service takes over its industry


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