Auction site loses its luster to investors

Gold's Auction, seen by some as an alternative to eBay, is shut down because of outstanding debt and its inability to attract enough operating capital.

2 min read
In the end, would-be eBay rival Gold's Auction did not have enough gold.

The start-up auction site was shut down last Thursday night by its Internet service provider because of outstanding debt, Gold's Auction representatives said. The auction service, which many eBay members saw as an alternative to the auction giant during its outages last year, was unable to find an investor to help it continue its operations.

Gold's Auction was in talks to sell its site or form a strategic alliance earlier this year, but those talks were hindered by the stock market crash, said Gregg Rose, Gold's Auction's chief operating officer.

"We seem to have entered a dot-com graveyard," Rose said. "What we needed was real operating capital. The stock market killed us."

With investors turning a skeptical eye on Internet companies, e-commerce sites in particular, dozens of public and private Web sites have closed shop in recent months, unable to raise funds to continue their operations. Last week, for instance, CMGI closed entertainment site iCast. Last month, Garden.com announced that it would soon cease operations.

Rose said he is still trying to figure out what to do with Gold's Auction, and is considering both reopening the site on another ISP and selling the site's software to an outside investor. The company has only two paid employees, both of whom continue to work for the company, he said. Gold's Auction was planning to unveil a new store-hosting service when the site was closed down.

Gold's Auction launched in June 1999 and soon drew attention from eBay sellers. Frustrated at the repeated outages and changing policies on the leading auction site, many sellers threatened to move their listings to Gold's Auction and other auction sites.

But Gold's Auction had a hard time keeping its site up and running in the face of the newfound attention, Rose said. And despite eBay's problems, many sellers were reluctant to leave the leading auction site for a start-up with few customers and a small selection. By the time it closed, Gold's Auction had about 26,000 registered members, Rose said; eBay has some 19 million registered members.

Unlike eBay, Gold's Auction did not charge sellers to list or sell their items on its auction site.