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EBay has been trying to exercise all its legal might to prevent consumers from using comparison shopping sites, but that hasn’t stopped a few risk-taking venture capitalists from placing their bets on yet another new shopper-friendly service. Last month, eBay won a preliminary injunction against comparison shopping site Bidder’s Edge, preventing it from using software agents or bot technology to gather information from eBay’s site. Bidder’s Edge has filed a countersuit. eBay used the same tactic last year to block users of a competing info aggregator, AuctionWatch.com Such services�also known as metabrowser or window-shopper sites�let users easily search for preferred price and product info across a variety of auction sites, including those offered by Yahoo! Inc., Lycos and Amazon.com. Additional destinations in this category include B2BRover.com, which was purchased by search engine GoTo.com for $175 million in March, Honesty.com and OnDelay.com Analysts have pointed out that auction sites such as eBay may be playing legal hardball in response to such sites because they fear the mass aggregators of auction data will end up winning the largest audience, attracting the most advertising dollars and ultimately controlling the online customer relationship. Despite eBay’s legal actions, San Bruno, Calif.-based AuctionWatch.com last week received $27.8 million in a Series C funding round, $15 million of which came from lead investor Technology Crossover Ventures (TCV). Additional investors included Bulldog Capital and meVC Draper Fisher Jurvetson Fund I, together with repeaters Sequoia Capital, [email protected], Angel Investors LP and Argus Capital. According to TCV general partner Brooke Seawell, there are several reasons for his enthusiasm for Auctionwatch. For one thing, eBay has stopped blocking Auctionwatch.com users from accessing information about its site. Seawell believes that eBay will eventually sign licensing agreements with many sites in this category. In addition, Auctionwatch.com reports it attracts 2.8 million visitors monthly and provides additional services Seawell thinks will increase in value, not only to online auction participants but to eBay as well. Said Seawell: “Auctionwatch provides services to three sets of customers, not just one: Sellers who want to sell on exchanges such as eBay can use Auctionwatch to help launch auctions. “Buyers who want to search all of the various auctions exchanges to find the best price also use the service. “The remaining leg is post-auction management services�the shipping and escrow services�which AuctionWatch.com also provides.” According to Seawell, this trio of services differentiates his company from all of its competitors. And Auctionwatch.com, he noted, will soon begin offering its selling and comparison shopping services to the growing number of business-to-business sites and exchanges on the Web. While it is uncertain that a majority of online surfers favor the constant haggling necessary while auction-based shopping over the more familiar set-price shopping, analysts have been fairly optimistic of late about the outlook for auction activity on the Web. Jupiter Communications Inc. estimates that consumer-to-consumer auctions will grow from $3 billion in 1999 to $6.4 billion this year and to $15.1 billion in 2004. Business-to-consumer auctions are rising even faster�from $700 million last year to $1.1 billion this year and $4.5 billion in 2004. Seawell declined to reveal Auctionwatch.com’s post-round evaluation or the specific equity stakes of the investors in the company. Copyright �2000 TDD, LLC. All rights reserved.

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