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AuctionWatch aims smaller, cuts jobs

The leading auction-services company stops targeting the large business market as part of a move that also includes layoffs and a push to drive sales.

Leading auction-services company AuctionWatch has stopped targeting the large business market as part of a restructuring that also includes layoffs and a bigger push to drive sales.

The San Bruno, Calif.-based company eliminated its editorial department, Chief Executive Rodrigo Sales said, and dropped efforts to provide auction-management services to large businesses. Sales did not specify exactly how many employees were laid off but did say the amount was more than 30 percent.

The market for providing auction services to large companies "is not mature enough in our minds to drive a significant amount of revenue in the short term," Sales said. "We're a private company. We need to focus on products that generate revenue."

As part of the restructuring, AuctionWatch will turn its efforts to providing services to smaller sellers, Sales said.

The restructuring is part of the ongoing evolution of auction-services companies and the online auction industry in general.

eBay has set a goal of reaching $3 billion in revenue by 2005. As part of its effort to do that, the San Jose, Calif., company has begun courting larger businesses to makes sales through its auction site. Among the companies that have signed on are IBM, Sun Microsystems and RitzCamera.com.

Hoping to capitalize on the growing number of large businesses selling on eBay, auction-services companies such as AuctionWatch, Andale and ChannelAdvisor have moved from offering seller tools and auction search features to mom-and-pop sellers to providing integrated inventory and services geared toward customer-service management.

But the transition has not been easy. FairMarket, which has focused entirely on hosting auctions for large businesses, has laid off more than 100 workers in the past year, including 38 last month. Meanwhile, ChannelAdvisor, which has had some success in courting companies such as IBM and Sun, has gone through four names in the last two years and has gone from being a private company to being a subsidiary of a public one and back again.

Although AuctionWatch announced its business services in July, it has been pursuing that market for the past year, Sales said. AuctionWatch has signed up fewer than 20 large-scale business customers, he said. The company plans to continue working with those customers and hopes to move them to its more automated services, he said.

In July, eBay designated AuctionWatch as one of its "preferred" providers of auction services for big businesses. The restructuring should not affect AuctionWatch's relationship with eBay, Sales said.

Although AuctionWatch will continue to offer auction guides and tips, it will discontinue writing auction news and feature articles. The termination of its editorial department was tied to the decline in online advertising, which was supposed to support that portion of the site, Sales said.

The job cuts at AuctionWatch are the third for the company since last December. The company cut about 10 percent of its staff in each of the two previous rounds, reducing its number of employees from more than 100 at its peak to about 80 before the latest cuts, Sales said.