Introduction to the Internet and online Auctions

Introduction to the Internet and Online Auctions

The Internet is a network of networks that links together computers using the TCP/IP protocols. A definition of the Internet is (1) a global network connecting millions of computers.

The World Wide Web (WWW) uses the internet services and more to allow users to share documents, images and various other types of media. Webopedia define the World Wide Web as (2) a system of Internet servers that support specially formatted documents. The documents are formatted in a markup language called HTML (HyperText Markup Language) that supports links to other documents, as well as graphics, audio, and video files. This means you can jump from one document to another simply by clicking on hot spots. Not all Internet servers are part of the World Wide Web.

Therefore from the above definitions it would be fair to say that the Internet acts as the transport vehicle for the information stored on the World Wide Web. It is often misconstrued that information is found ‘on’ the Internet, it would be more accurate to say that the information is found ‘via’ the Internet.

Online Auctions were introduced in approximately 1995 and have been one of the largest growing businesses on the World Wide Web. Online Auctions are a way of buying and selling pretty much anything via the Internet. Made popular by eBay and now found on dozens of different sites, these online auctions allow buyers and sellers to come together to trade all kinds of items. BitPipe define an online auction as (3) use of the Web to match buyers and sellers around the globe pioneered by eBay.

Some online auction sites allow buyers and sellers to register and trade while others are specifically for the one company to sell items. For example some travel agents operate online auctions to sell late availability offers to the highest bidder.

The Growth of Online Auctions

Since online auctions were introduced approximately 10 years ago there has been an influx of new sites where the trading of every kind can be done via online auctions. There are sites that specialise in certain kinds of goods and sites that trade pretty much anything.

As I have mentioned there are many types of goods or services that can be bought or sold on online auctions. Just a few examples of these are holidays, houses, cars, computers, DVDs and video games. The idea of online auctions is so appealing that there are even online service auctions where businesses can list on going jobs or project based employment opportunities. Freelance professionals can then bid on listings with the lowest salary/payment that they are willing to work for. The winning bidder can then enter into contract negotiations for job or project.

A great example of the success of online auctions is the popularity of eBay. The following statistics show the amount of success that eBay have enjoyed and the amount of growth and potential that this sector of the World Wide Web has for future growth. These sets of statistics have been chosen to give an idea of the yearly growth (2002 vs 2003) and to also show the current rate of growth (2003 vs 2004 (1st 3 Quarters). It has to be taken into consideration that the two sets of data are not like for like, therefore it would be incorrect to compare the two sets of statistics. The reason for the second set of statistics is to show the continued growth of Ebay and not to compare the rate of growth, however I have tried to give more information on the second set for this purpose:

· (4) 2003 growth in comparison to 2002 (last full year comparison available):

o Consolidated net revenues for 2003 were $2.17 billion;