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eBay unveils wireless bidding service

The e-tailer and InPhonic, a wireless company backed by former Apple CEO John Sculley, announce a service that lets people more easily bid on an item via cell phones.

eBay and InPhonic, a wireless company backed by former Apple CEO John Sculley, announced Wednesday a new monthly service that among other things, lets people more easily bid on an item using their cell phones.

The auction Web site already sends wireless e-mail to a small percentage of its customers who have signed up for its "eBay Anywhere," a free service that sends alerts to wireless devices when an auction is about to close or when someone has been outbid. But those customers could not reply to the messages and submit a new bid. For $2.99 a month, they now can, the companies said.

In a presentation of the service in New York's W Hotel on Wednesday morning, Brian Cowley, vice president and general manager of sponsorship and services for eBay, said the company's previous wireless service hadn't been successful. "The difference with this service is it's two-way and it's simpler," he said.

The service, dubbed "Wireless Rebidding," is available to anyone with a cell phone capable of sending and receiving wireless messages. The technique, known as two-way messaging, is available on just about any cell phone sold now. Most major U.S. carriers support two-way messaging on their networks.

Wireless rebidding also works with Internet-enabled cell phones that use the Wireless Application Protocol, or WAP, the companies said.

In promotion of the service, eBay and InPhonic said they would pitch it to eBay's 46 million registered customers. Nextel will also promote the service to more than 1 million customers, ultimately offering it to its base of 9.2 million subscribers.

The service works with all U.S. carriers, but Nextel has agreed to provide billing for the service. InPhonic CEO David Steinberg, speaking at the W Hotel, said the companies have a similar deal with another carrier that will be announced soon.

eBay and InPhonic declined to reveal financial details of the revenue-sharing deal, but Steinberg said the service will need to be adopted by 5 percent to 10 percent of eBay's "dedicated" members, or those that buy from the site one to three times a month, in order to be financially viable.

The deal with eBay could prove to be a boon for Washington, D.C.-based InPhonic, a privately held wireless infrastructure company founded in 1999.

InPhonic said clients include Microsoft, Yahoo, AOL, Johnson & Johnson, AT&T Broadband and Merrill Lynch. The company said it also has a patent pending on two-way SMS (Short Message Service) bidding technology that will extend to all wireless devices.

eBay is among the growing number of companies incorporating wireless e-mailing into their stable of services. Other companies using wireless e-mail include American Airlines, which sends updated flight information to phones. Financial institutions and trading companies have also begun using wireless e-mail for trade alerts to their clients.

Financial institutions and trading companies have also begun using wireless e-mail for trade alerts to their clients. The messages do not allow a reply, like eBay's original wireless e-mail service. A "wireless rebidding" redux for Wall Street wunderkinds might be next, IDC wireless analyst Keith Waryas suggested.

"It's far more important to me to know my stock took a dump and I can sell it than 50 Barry Bonds baseball cards just went on sale on eBay," he said.

But for the most part, use of cell phones for anything other than making a telephone call has been nearly nonexistent in the United States. About 350 million wireless e-mails were dispatched last year, according to most estimates. The numbers might seem significant, but they pale in comparison to Europe, where between 30 billion and 35 billion wireless messages leap between cell phones every month.

One thing eBay has working in its favor, however, is the small percentage of its customers who've already signed up for the wireless e-mail alert programs. One of the main complaints, according to a source familiar with eBay's plans, was that customers couldn't act on the wireless alerts they received. Instead, they had to find a laptop or personal computer.

News.com's Tiffany Kary contributed to this report.