New service targets Priceline

The new service, due to launch Monday, lets buyers dicker over price with name-brand sellers of computer products, according to executives. Online negotiations can take place instantly, depending on whether the seller is using NexTag's technology.

NexTag has applied for patents on its price negotiation engine and for the way it communicates with sellers. Meanwhile, the company plans to add additional merchandise before the fall shopping season, but has not said what that might be.

Essentially, NexTag aims to make itself valuable as a middleman, promoting virtual transactions made possible by new technologies. Following in the footsteps of Priceline, which has won loyal users by running a "name your own price" service that lets buyers set their cost limits, such services have been proliferating rapidly.

NexTag's approach is unique, though it is part of a broader set of new buying and selling models enabled by the Web, according to Rebecca Nidositko, an e-commerce analyst at Yankee Group. It falls into the same category as eBay's person-to-person auctions; group buying services including Mercata and Accompany; and Priceline's services.

Other services, such as shopping "bots" by Respond.com, MyGeek.com, and Frictionless Commerce, are due to launch later this month.

NexTag welcomed the comparison to Priceline.

"They've done a lot of legwork in explaining the new purchase process [to the market]," Rafael Ortiz, NexTag's vice president of marketing, said wryly.

Priceline rose to prominence brokering airline ticket to computer users, who learn within an hour whether their offers are accepted. The company has branched out into cars, hotel rooms, mortgages, and home equity loans, and holds a "business process" patent for its business model.

NexTag chief executive Purnendu Ojha said his service "enables sellers to compete for buyers," resulting in better prices for buyers and lower selling costs for sellers.

"We do not believe deals can be made until both sides agree on price," Ojha said, in a shot at Priceline, which doesn't disclose prices its sellers are willing to offer.

But Chris Shipley, editor of the DemoLetter newsletter, remains skeptical not about NexTag's new service, but about claims that its something new.

"Ultimately, there isn't a whole lot of new business models in buying and selling, they're just recast for the Internet age," Shipley said.

NexTag works like this: Users select a specific product and NexTag generates a list of sellers who offer that model, plus their list prices. If the buyer doesn't like the price, he or she can submit a lower bid, either to specific sellers or to all that offer the product.

Sellers can then respond with a counteroffer, a process that each seller can automate with NexTag according to its business rules. If the seller is using NexTag's technology fully, counteroffers can be obtained almost instantly. Otherwise, buyers are notified by email.

Among the 13 sellers of PC products, NexTag has signed up Egghead.com, CDW.com, Buy.now, and MicroWarehouse.