Classified Ventures throws in the towel

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By: Wayne Robins

Auctions.com now a dot-goner

The hammer has dropped on auctions.com. Classified Ventures (CV), parent company of the platform that allowed newspapers to have their own localized online auctions, has decided that the ceiling for this e-commerce model was too rich for their blood. They’ll shutter the site on Aug. 31. All bidding will cease a day earlier.
It took less than a year for CV, which is owned jointly by six major newspaper companies, to sour on auctions.com as a potential money maker.
“Classified Ventures made a strategic decision to focus all of our resources on cars.com and homescape.com, said Beth Gallanis, the Chicago-based com-pany’s spokeswoman.
Cars.com is, of course, CV’s national automobile site. Homescape.com, introduced in July, is CV’s “real estate portal,” including properties such as the resale-oriented homefinder- .com, and the community-oriented NewHomeNetwork.com.
“The auctions business is not a straightforward vertical business the way cars and real estate are,” Gallanis said. The technology for auctions.com was slower and more complex than the common platform CV was able to use and leverage in its auto and home businesses.
Some new-media newspaper executives had their doubts about auctions.com from the opening gavel.
“It looked stillborn to us,” said Ralph Frattura, new-media manager of The Sacramento (Calif.) Bee. “We’ve gotten behind all the other Classified Ventures products, but this never looked like a promising thing.” The Bee is owned by the McClatchy Co., one of the media giants that owns CV. The other partners are Gannett Co. Inc., Knight Ridder, the New York Times Co., the Tribune Co., and the Washington Post Co.
The auction.com concept started at The Hartford (Conn.) Courant (then a Times Mirror Co. newspaper, now owned by the Tribune Co.) as Auction Universe in late 1997. Times Mirror acquired and relaunched Auction Universe in September 1998. Two months later, CV took over the platform, and relaunched it once again as auctions.com in December of 1999.
But it’s more than sentimentality that saddens Chris Morrill, general manager of the Courant’s ctnow.com Web site, about the demise of auctions.com.
“I believe in online auctions,” Morrill said. “Newspapers have always been great at putting buyers and sellers together.” But, in this case, there weren’t enough of either to make the auction site fly. “We didn’t see a lot of revenue from it,” he said.
Though its network had grown from about 30 newspapers under Times Mirror to 140 as part of CV, there seemed little chance of it competing with such focused brands as the online auction market leader eBay.
“It wasn’t a matter of auctions.com versus ebay.com, but they are a big, entrenched player that raises the bar for all of the other players,” Gallanis said. “You’ve got to have a lot of volume to make a profit in online auctions. Our success, investment, and momentum has been in cars and real estate, so we decided to focus our resources, energy, and attention on succeeding in and winning in those categories.”
Like so many other online businesses without realistic business plans, the impending demise of auctions.com can also be seen as the result of a more hard-headed approach to e-commerce that began with the Nasdaq stock market dive in the spring.
“We’re not a publicly held company, so the impact wasn’t direct,” Gallanis said.
“Indirectly,” he added, “what happened has imposed a great deal of sobriety into the Internet industry, and out of that has come much more discipline every day in making decisions.”

(Editor & Publisher Web Site: http://www.editorandpublisher.com)
(copyright: Editor & Publisher August 28, 2000)

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