Microsoft launches online auction

MSN launched an auction site Monday, marking Microsoft's first move into the lucrative online auction business.

The launch forms part of a larger deal aimed at rivalling auction giant eBay. Around 100 companies, including Dell, Lycos, Excite and publisher Ziff-Davis will launch similar sites over the next month.

The auction syndicate will be co-ordinated by FairMarket. FairMarket has previously developed software that allows companies to set up their own private-label auctions, and share them with other clients. The FairMarket Auction Network will allow all of FairMarket's more than 100 clients to pool resources, so that auctions listed on one site will be displayed across multiple sites.

So a consumer looking for or selling a computer on Lycos' auction site would be able to buy and sell on auctions sponsored by Microsoft and Excite@Home. That kind of cross-linking could allow the sites to reach the critical mass crucial to compete with eBay and other online auctioneers.

Despite the number of high-profile customers joining FairMarket, however, it initially offers far fewer items than eBay or second-ranked Amazon.com.

Jane Wakefield contributed to this report