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Silicon Valley auctions show demise of dot-coms

Network World Fusion

(IDG) -- Looking for one-stop shopping where you can pick up a Kenmore refrigerator, 22 black trash cans and a Dell PowerEdge 6300 server? Welcome to the latest phase of the Internet revolution, the dot-com auction.

"We've had between 10 and a dozen of these auctions in the last month and probably sold over $25 million in merchandise," said David Charyn, senior vice president of 40-year-old San Francisco auction house Charyn Auctions. "We have four more scheduled for next month."

Wednesday's auction consisted of merchandise from Bigwords, Techplanet, iOwn.com and Craft Internet Holdings, all of which have either completely closed shop or been forced to reduce their levels of staffing and equipment.

These four are hardly alone in their condition, as the flagging U.S. economy continues to take its toll on young Internet companies. Last month alone, 49 dot-coms failed and 112 were acquired by other companies, according to a recent study by Webmergers.com.

Sure, it can be depressing to walk into a nondescript warehouse and see an entire office on the chopping block, but once you get over the sight of a pigeonhole mailbox with the names of laid-off employees still on it and the file cabinets that still have "Bigwords" magnets on them, you quickly begin to see the appeal.

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"It's basically a lottery," said Jon Welch, vice president for technology at Berkeley, Calif., architectural rendering company Vizit3D. "Sometimes people end up bidding at higher than market prices, but sometimes, when not a lot of people know what something is, you can get it for a tenth of what it's worth."

Welch has been to a few auctions, purchasing monitors, computers and networking peripherals for his company. This time he had his eye on a few items of office equipment and an Apple Macintosh. He managed to keep his attention away from the lava lamps, random items of promotional clothing, and the guitar autographed by rock band Blink 182, which sat in the corner.

Charyn estimates that the dot-com auction business will see roughly $3 billion in used equipment pass through over the next 2 years. Strangely, it seems the only people not taking advantage of the auctions are dot-com start-ups.

"Actual start-up dot-commers usually have enough start-up capital so they can buy everything new," he said.

Although there were a few people glancing at the Fenders guitars, Marshall amplifiers and the five-piece drum set, there didn't seem to be a lot of competition for the seven-foot pea green sofa and matching overstuffed chair or the designer lava lamps. Charyn didn't seem worried, however.

"This is a new market, the explosion of the dot-com auctions, and we're all fighting for market share," he said. "There's good competitive fun, but it's a great industry to be in."

However, there is no such thing as a "typical" auction attendee, Charyn said.

"You get everyone from brokers to end users in here," he said. "Some people come in here to look at a server, but the next thing they know, they have all new furniture in their office. It's like a super flea market."

Others come just to look for a single home computer at a discount price. Joe Pardini and Greg Maze, who work in San Francisco, came looking for PCs - Pardini for a desktop, and Maze for a laptop. While other bargain hunters seemed pleased with what they found, Pardini wasn't very impressed.

"Most of these desktops were just workstations, so they need upgrades," he said. "Some of them don't even have a sound card."



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