The deal puts Excite (XCIT) into one of the more promising businesses developing online, but observers predicted it would not cause a major surge in Excite's traffic.
Excite, along with other so-called Web portals such as Yahoo! (YHOO), Infoseek (SEEK) and Lycos (LCOS), have been adding features such as e-mail, maps, chat rooms and yellow-pages directories as a way of luring in more users, and the advertising dollars that come with them.
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The strategy has paid off for the portals, which are among the highest-valued Net stocks on Wall Street. Yahoo! is the most highly trafficked Web site.
Tie-in to Classifieds2000
The new auction service ties into the Classifieds2000 classified advertising subsidiary of Excite, which runs Excite Classifieds. When users search for a product on Excite Classifieds, auction ads are included in the results.
"The user experience on Excite continues to expand," said Excite Vice President David Sze in a statement. "Now Excite users have a new way to find great bargains or sell their goods, and have some fun at the same time."
Market expected to almost double
Online auctions, which sell mostly computer-related equipment, but have also branched out into everything from houses to automobiles to Beanie Babies, have become one of the more successful Internet services. Forrester Research expects the business-to-business auction market alone to reach $5.2 billion this year, nearly double 1997's $2.9 billion.
One of the more prominent auction sites, eBay, shrugged off Excite's announcement as practically irrelevant to its business.
"With all due respect to Excite, which is a great company, they're not in the same range (as eBay)," said eBay VP Steve Westly. He postulated it would be some time before Excite could match eBay's selection.
Auctions could be a way of increasing the amount of traffic Excite draws, and, what is more likely, the amount of time users spend on the site. But any increase will probably be marginal, observers said.
"A lot of these incremental services aren't really a big deal," said analyst Alexis dePlanque of Meta Group. "They become commoditized. If you look across at any of the portal sites, a lot of it is pretty consistent.
"Is it a good idea for them? Yes. Does it make a difference? No," she said.