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Dell bids on online auctions

Dell is launching an online auction site, sources say, the latest indication that the days of PC manufacturers profiting only from hardware sales are quickly becoming a faint memory.

Dell is launching an online auction site, sources say, the latest indication that the days of PC manufacturers profiting only from hardware sales are quickly becoming a faint memory.

Dell will announce the auction site next month as part of a larger push to offer a variety of services to all computer owners, even owners of non-Dell PCs. This strategy already includes selling non-Dell products such as software and peripherals through its recently launched GigaBuys online store.

"The intention, eventually, is all kinds of computer-related stuff," one source close to the company said.

Over the last year, all major PC makers have been seriously looking at ways to beef up their bottom lines in the face of rapidly declining hardware prices and profit margins. Dell and Gateway have made the transition from direct Web sales to online stores and expanded Internet services with third parties.

GigabuysAuction.com, GigAuction.com, as well as DellAuction.com have been registered by Dell over the last few months, although sources close to the company caution that Dell tends to register far more domains than it ever plans to use. "For every URL that Dell has used, they've registered 40," one source said.

Dell will likely offer third-party computer products through the auction site, including desktop and notebook systems, software, and peripherals. The company will likely take a commission from each sale, much in the same way popular auction site eBay operates, sources said.

Dell's auction site is expected to launch by mid-August. Meanwhile, the company is expected to aggressively expand its online services offerings, with the new auction site as one part of a larger effort to offer services to all PC owners.

"We are working on a number of ways to enhance the direct relationship we have with people online and you'll see more announcements about that this summer," said Dave Dix, a spokesperson for Dell. Dix declined to comment on specific plans.

Dell and Gateway both have aggressively expanded their service offerings to offset declining hardware revenues. Gateway, like Dell, has launched Spotshop.com, an online store in conjunction with NECX.

Soon, Gateway could be reaching even further to generate revenue from after-market sales. The company recently registered the domains Bookspot.com, Spotgames.com, Travelinfospot.com, and Spotedu.com.

A source close to the company said there are plans to extend SpotShop's offerings, possibly with a site designed for education market customers. This site may launch as soon as PC Expo, sources say.