Amazon.Com Buying Online Auction Firm -- Deal With Seattle-Based Livebid Expands Services

Amazon.com is buying a Seattle online-auction company, adding to its own newly launched service in its bid to dominate auctions on the Web.

Seattle-based Amazon.com will buy local start-up LiveBid.com, which has built a business of opening live and special-event auctions to Internet users. The deal is expected to close by the end of June. Terms of the stock transaction were undisclosed.

LiveBid, founded in 1996 as Innerlinx Technologies, has handled the Internet auctioning of items from the O.J. Simpson estate and collector cars from Kruse International, and will open the annual Northwest Poncho auction to virtual bidders this year.

Amazon.com, which has grown from selling books on the Internet to selling books, music, videos and gift items, two weeks ago launched its auction service. The company also has made numerous investments, including a 46 percent stake in an online pharmacy and a 50 percent stake in an online pet-care store.

The LiveBid purchase expands Amazon.com's auction service into a new area for the top Internet auction sites. Amazon.com, San Jose-based eBay, and Yahoo! Auctions primarily focus on person-to-person sales, where individual sellers post items to be bought by individual buyers. Other online companies, like Onsale.com, focus on businesses selling to consumers.

But LiveBid's proprietary technology connects auction houses running traditional auctions to bidders around the world via the Internet. LiveBid says it is the only provider of live online-auction technology. LiveBid has run dozens of auctions since it started offering online auctions in 1997. Online bidders register with LiveBid, preview the items for sale and enter their bids in the ongoing auction.

Buying LiveBid gives Amazon.com potential partnerships with thousands of auction houses that want to reach Internet users but don't want the hassle of creating their own online presences, said Bill Curry, Amazon.com spokesman.

The deal also adds expertise and credibility to the auction site, he said. Many auction houses are authorities in specialty areas such as cars and antiques, and their backing of an item up for bid adds authenticity and security for buyers, Curry said.

Auction houses pay a combination of flat fees and commissions on goods sold over the Internet.

The privately held company has about 20 employees. It declined to disclose its sales. Co-founders Matt Williams, 26, and Sky Kruse, 26, will stay with the company.

LiveBid.com has been courted by other top online auction sites but opted for Amazon.com, Williams said. "It was not something we were looking for at this point," he said. A few weeks ago, Amazon.com started up talks with LiveBid, and the founders decided it made sense.

"Certainly you cannot beat the brand name of Amazon.com," Williams said.

"Frankly what Amazon has done for themselves in the auction space is pretty remarkable. They have put themselves on the map in a major way and have the best buyer community out there on the Web."

Helen Jung's phone message number is 206-464-2742. Her e-mail address is: hjung@seattletimes.com