WO2001022326A1

WO2001022326A1 - System and method for administering a communication network based auction

Info

Publication number: WO2001022326A1
Application number: PCT/US2000/026043
Authority: WO
Inventors: Eli Rabinowich; Eli Mandelbaum
Original assignee: Mabool.Com, Inc.
Priority date: 1999-09-22
Filing date: 2000-09-22
Publication date: 2001-03-29
Also published as: WO2001022326A9; AU4021001A; WO2001022326A8

Abstract

A system and method for administering a communication network based auction is provided. The system includes a server (10) accessible via a network (100) for providing communication between bidders (80) and associated merchants (90). The server (10) includes a processor (12), a memory (14) and input/output device (16). Memory (14) stores a bidder database (20), auction item database (30), bid database (40), merchant/discount database (50) and computer programs (45) for operating server (10). Losing bidders receive a discount on the auction item that may be redeemed at one or more associated merchants (90).

Description

System and Method for Administering a Communication Network Based Auction

Field of the Invention This invention relates to a system and method for administering a communication network based auction.

Background of the Invention With the explosion of the internet over the past several years, several web sites have been launched that provide auctions over the internet. These web sites allow potential bidders to browse web pages of items that are available for auction, and to bid on the items 0 by simply filling out a bid web page that is then submitted to the web site. When the auction is over, the winners and losers of the auction are notified, e.g., by e-mail. U.S. Patent No. 5,835,896 to Fisher et al. and U.S. Patent No. 5,890,138 to Godin generally describe such auction web sites.

These auction web sites, and the systems described in the Fisher and Godin patents, ^ provide significant advantages over conventional auctions that require a human auctioneer to administer and oversee them. For example, the auction web sites are able to run several auctions in parallel, which allows more items to be auctioned and sold in a given period of time. Moreover, since the auction web sites are available over the internet, the number of potential bidders who might actually submit a bid for a particular item increases. This may 0 lead to higher bids being offered for a particular item. Just as importantly, the sheer number of potential bidders visiting these auction web sites provides significant opportunities to attract advertisers to place banner ads on the web site.

However, the auction web sites available today do not provide any significant value- added features to their auction systems. In the present situation in which customers in most 5 cases do not win the auctions they enter and may even pay a fee to submit a bid, this is a decided disadvantage to attracting customers over the long haul. The system and method of the present invention provides an auction web site that provides, among other things, a value-added win-win feature that is not only attractive to potential bidders, but also to merchants who offer the items that are auctioned on the present system's web site. 0

Summary of the Invention According to one preferred embodiment, the present invention is directed to a method of administering an on-line auction of an item on a web site comprising: posting on the web site a limited number of the item to be auctioned; accepting a plurality of bids for 5 the item; determining the winning and losing bidders; and providing the losing bidders of the auction a discount on the auction item that may be redeemed at one or more merchants associated with an administrator of the web site.

The step of providing the discount may, for example, include: the step of electronically providing a unique discount identifier to the losing bidders that may be inputted at a merchant's web site to obtain a discount on the auction item; the step of posting on the administrator web site unique electronic coupons that can be accessed and printed by the losing bidders of the auction; the step of making unique electronic coupons available to the losing bidders via e-mails; or the step of providing to the merchant unique discount identifier information that identifies the losing bidder and the auction item. The method may further include the step of receiving information from the merchant that a discount has been redeemed. In a preferred embodiment, the step of receiving information includes the step of automatically electronically receiving the information when the discount is redeemed at the merchant's web site.

In another preferred embodiment, the present invention is directed to a system for administering an on-line auction comprising: means for posting a limited number of an item to be auctioned; a storage that contains information about at least one merchant associated with the system that offers the item for sale; means for determining the winning and losing bidders; means for electronically informing the winning bidders of the auction; and means for providing the losing bidders of the auction a discount on the auction item that may be redeemed at the merchant.

In yet another preferred embodiment, the present invention is directed to a software program implemented on a host computer administering an on-line auction of an item, said software program allowing the host computer to: maintain a storage containing information about at least one associated merchant that offers the item; post a limited number of the item to be auctioned; accept a plurality of bids for the item; determine the winning and losing bidders; and provide the losing bidders of the auction a discount on the item that may be redeemed at the merchant.

In another embodiment, the present invention is directed to a method of administering an on-line auction of an item on a web site comprising: posting on the web site a limited number of the item to be auctioned; accepting a plurality of bids for the item; and providing a discount on the auction item to bidders who have made bids on the auction item, wherein the discount may be redeemed at one or more merchants associated with an administrator of the web site. In yet another embodiment, the present invention is directed to a method of administering an on-line auction of an item on a web site comprising: posting on the web site a limited number of the item to be auctioned; accepting a plurality of bids for the item; determining the winning and losing bidders of the auction; providing to the losing bidders a list of one or more merchants associated with an administrator of the web site that offer the item; receiving information that a losing bidder has purchased the item at the one or more merchants; and providing a rebate to the losing bidder.

These and other features of the present invention will be better appreciated after reading the remainder ofthis specification.

Brief Description of the Drawings FIG. 1 is a block diagram showing an illustrative system of the present invention; FIG. 2 is a flow chart depicting the operation of the present invention; and FIG. 3 is an illustrative bid web page.

Detailed Description of the Preferred Embodiments FIG. 1 is a block diagram showing an illustrative system of the present invention. The system includes a web server 10 that is accessible via a communication network such as the Internet 100 to bidders 80 and associated merchants 90. Web server 10 preferably is a programmed general purpose computer that includes a processor 12, a memory 14, and input/output means 16. The input/output means includes a web site 18 that is accessible via the Internet 100. As is shown in FIG. 1, memory 14 stores a bidder database 20, auction item database 30, bid database 40, merchant/discount database 50, and computer programs 45 for operating server in accordance with the invention. Alternatively, one or more of the databases could be stored apart from server 10 and connected thereto by a communication network. As illustrated in FIG. 1, the computer programs preferably include an auction administrator component 55, a discount generator component 60, an e-mail generator component 65, and a custom calendar generator component 70.

The bidder database 20 contains information regarding bidders who have registered with the system, and preferably includes for each registered bidder: the bidder's system identification number and password, credit card or other payment mechanism information, demographic data, information regarding the history of bids made by the bidder, information concerning discounts that have been issued to and redeemed by the bidder as a result of the bidder losing one or more auctions, and information regarding the bidder's auction item preferences he entered while registering with the system. The auction item database 30 contains information regarding the items that the system auctions. (The term "item" as used herein refers to either a product or a service.) By way of example, for each product entry the database may include: the item's system identification number, a brief description of the product, features and specification information for the product, expert and consumer opinions, the suggested retail price, competitive pricing information for the product, warranty information, the quantity of the product to be auctioned, the time when the product will be posted on the web site, and the auction start and end times.

The bid database 40 contains information regarding the bids that have been received 0 for each auction item, and preferably includes a file for each auction item that contains the amount of each bid, the bidder's system identification number, and information regarding the winning and losing bids and bidders.

The merchant/discount database 50 contains information about each merchant that is associated with the system. Advantageously, these associated merchants 90 have preferably entered into a contract with the administrator of the system, and have agreed to provide a discount on certain auction items to each losing bidder. In one embodiment, the system administrator has partnered with one merchant for each item category (e.g., digital cameras or air fare) such that there is only one associated merchant for each auction item. However, there may be more than one associated merchant 90 for each auction item. 0

The merchant may be a manufacturer, e.g. Sony, of items to be auctioned and in such case the administrator will have signed a contract with the manufacturer, and the manufacturer has agreed to provide a discount to losing bidders on auction items through the manufacturer or through one or more retailers where the manufacturer's items are offered to the public. Alternatively, the merchants may be retailers, and in such case the 5 administrator will have signed a contract with one or more retailers, and the retailer(s) have agreed to provide discounts to losing bidders on auction items offered to the public.

Moreover, the merchants may be wholesalers, and the wholesalers have agreed to provide discounts to losing bidders on auction items through the wholesaler or through one or more retailers. 30

For each associated merchant 90, the merchant/discount database 50 preferably maintains a file of the auction items offered by the merchant, the merchant's price for the auction item, the merchant's offered discount on the auction item, and information relating to discounts that have been generated by the system. Such information may include for

_ . each generated discount, information regarding the losing bidder associated with the discount, as well as information concerning expiration of the discount and information concerning whether the discount has been redeemed.

The relationship that the system administrator offers to merchants is very attractive to merchants because the losing bidders have demonstrated by their participation in the auction that they are: 1) willing to purchase products over the internet, 2) interested in the merchant's products, and 3) have already put in time and/or money towards the product by submitting the bid. This unique relationship may dramatically reduce the cost of customer acquisition for the system's associated merchants 90.

Auction administrator 55 runs the auctions on the system. Its functions include posting items to be auctioned on the web site in accordance with the posting timing information contained in the auction item database 30; beginning and ending the auctions for items in accordance with auction start and end times contained in the auction item database 30, and determining the winners and losers of each auction by querying the bid database 40. In the case where the system provides updates to bidders during an auction of an item, the auction administrator may query the bid database 40 periodically to retrieve and post the highest bids.

Discount generator 60 constructs the discount information that is provided to the losing bidders of each auction. E-mail generator 65 generates e-mails that may be sent to bidders. Custom calendar generator 70 creates custom calendar home pages for registered bidders that list by date auction items that are of interest to the bidders based on preference information stored in database 20 that they have provided when registering with the system.

Like the systems of currently available auction web sites, the system is set up to administer several auctions in parallel.

Those skilled in the art will recognize that the above is merely an illustrative system that can carry out the method of the present invention. Other system architectures that provide access to the system web site, maintain the necessary information in storage, and which are capable of running the auction and its related features according to the methods of the present invention are available and are within the scope of the present invention.

Before turning to a description of the general operation of the preferred embodiment of administering an auction over a communications network, it is noted that similar to the currently available auction web sites, potential bidders may navigate to the system web site, and browse through web pages showing auction items. As is known in the art, the auction items may be grouped by general item categories so as to allow a potential bidder to quickly find the type of item he is interested in bidding on. Moreover, the system allows potential bidders to perform a search of the auction items in order to locate a specific type of item the bidder may be interested in.

The general operation of a preferred embodiment of administering an auction over a communications network will now be described in connection with FIG. 2. First, as depicted in step 200, and as discussed above, the administrator of the web site contracts with one or more merchants for items to be auctioned on the web site. At step 202, auction administrator 55 posts an item to be auctioned on the web site. An illustrative web page that shows an item to be auctioned is shown in FIG. 3. As shown in FIG. 3, the web page may include the system identification number 300 for the item, a representation of the item

10 305, a brief description of the item 310, the quantity of the item to be auctioned 320, a retail price 330, and the start and end times 340 for the auction.

The web page also includes a push button 350 or similar mechanism that allows the user to obtain further information on the item. Such information may include features and specification information for the item, warranty information, shipping options, and expert and consumer opinion information. Yet another push button 340 or similar mechanism allows the user to obtain competitive pricing information for the item. Here the bidder may obtain the lowest price located by the administrator of the system, and advantageously may access a shopping bot where he may obtain further competitive pricing information. The web page may also include a push button 370 or similar mechanism that provides a list of

20 the one or more associated merchants 80 who offer the item, and possibly, the discount that the associated merchant 80 will provide to the bidder should he lose the auction on the item shown on the web page.

With continued reference to FIG. 3, a push button 380 or similar mechanism is also preferably displayed on the bid web page, which allows the bidder to register with the 25 system if he has not already registered. This step is depicted as step 204 in FIG. 2. If the bidder selects push button 380 he is presented a registration form web page that requests the bidder to enter a password, shipping address, internet e-mail address, telephone number, credit card information, preferred shipping options, and certain demographic information.

Such demographic information may include gender, age, income, family size, etc.

Advantageously, if the bidder provides credit card or other approved payment mechanism information when registering he need not include such information on the bid forms that he may later submit.

The registration page may further request that the bidder enter or select what specific items or item categories he is interested in bidding on. For example, the bidder might indicate that he is interested in CD players, microwave ovens, and air fares from New York to Los Angeles. The e-mail generator 65 will use this information to construct e-mails that are sent to the bidder to inform him of upcoming auction items that he may be interested in. Such information is similarly used by the custom calendar generator 70 to construct the custom calenders for bidders. In the preferred embodiment, the e-mail generator 65 and/or the custom calender generator 70 periodically queries the auction item database 40 and the bidder database 40 to extract information regarding the auction items that may be of interest to the bidder.

Once the bidder has completed the registration page he may then press a push button or similar mechanism to submit the registration to the system. A system identification number may then be assigned to the bidder. The above description of the bid and registration web pages is of course illustrative.

Again referring to FIG. 3, advantageously, the bidder may also click on push button 390 or similar mechanism to view bid histories for the same and/or similar items that have been previously auctioned. This information may be extracted from the auction item database 30 and the bid database 40. In this example, the bid histories would be for previously auctioned CD players. For each of these items, the suggested retail price, the winning bids, and the history of the bids made may be displayed. The user may use this information to make a more intelligent bid on an item now being auctioned.

The web page also includes a push button 360 or similar mechanism that allows the user to submit a bid for the item. The bid form preferably allows the bidder to insert information regarding his system identification number, password, his bid, and his credit card or some other approved payment mechanism information. As discussed above, if the bidder has already provided such credit card or other approved payment information during the registration step, he may not need to provide such information when submitting his bid.

The system may or may not charge a small fee to submit a bid. Once the user has completed the bid form, he may submit the bid, e.g., by pressing a push button on the bid page. Other ways of submitting bids across a communication network are available and are within the scope of the present invention. By way of example and not limitation, the user could alternatively submit a bid via a telephone network such as a 800 or 900 number service.

During step 208, the system accepts bids on the auction item. If the bid is determined by the system to be a valid bid (e.g., the bidder has provided payment information on the bid page if he has not provided such information previously), the system stores the bid in the bid database 40. E-mail generator 65 may then construct an e-mail to the bidder informing him of the system's acceptance of the bid, and the availability of a discount on the auction item should he not win the auction. The system continues to accept bids and input such bids into the bid database 40 until the auction session has ended in accordance with the auction end time contained in the auction item database 30. In the preferred embodiment, the auction is a silent auction. That is, the system does not provide updates to bidders as to what is the highest outstanding bid or bids during the auction.

However, it should be understood that other types of auctions may be offered. For example, if a traditional non-silent auction is provided, the system can provide updates to the bidders during the auction. These updates may be provided via e-mail messages sent by the e-mail generator 65 to those bidders who have been out bid during the auction. Alternatively, or in addition to the e-mails, the posted web page for the auction item can be periodically updated by the auction administrator 55 so as to list the highest outstanding bid or bids. Still further, where more than one unit of the same item is offered in the same auction, the features of both a silent auction and a non-silent traditional auction may be combined. For example, information can be provided to the bidders about the highest winning bid but not any of the others.

At step 210, the system determines the winning and losing bidders of the auction. This is preferably determined by the auction administrator 55 by querying the bid database 40 to retrieve the winning bids and the losing bids after the auction ends. Once the auction administrator has determined the winning and losing bids, it may store such information in the bid database 40. Those skilled in the art will recognize other mechanisms to determine the winning and losing bidders of the auction, and all such mechanisms are within the scope of the present invention. It will also be understood that any other auction type may be implemented in the system of the present invention. Such auctions include by way of example and not limitation a traditional auction, a Dutch auction, and a reverse Dutch auction.

In the preferred embodiment, the winners of the auction all receive the auctioned item at the lowest winning bid. For example, if the system auctioned off one hundred pieces of an item, then the one hundred highest bidders receive the product at the lowest winning bid.

Next at step 212, the system offers to each of the losing bidders of the auction a discount from the purchase price of the item on which they were bidding. Advantageously, in the preferred embodiment, this discount may be redeemed only at the one or more associated merchants 90. In the preferred embodiment, the discount is redeemed by the bidder on-line at a merchant 90 web site. However, in appropriate circumstances, the discount may also be redeemed in connection with an off-line purchase at a merchant 90 as well. In one embodiment, the system provides the discount by creating unique discount coupons, and making the coupons available to each of the losing bidders. The coupon preferably includes a unique coupon identification number; the system item identification number; a brief description of the item; the associated merchant or merchants 90 where the coupon may be redeemed; the amount of the discount; expiration information if appropriate; the name of the losing bidder; the bidder's system identification number; and the bidder's internet e-mail address. This coupon generation process is preferably completed by the discount generator 60 by obtaining the item and merchant information from the auction item database 30 and the losing bidder information from the bid database 40 and the bidder database 20. The necessary information is then compiled into an electronic coupon. In view of the above description, those skilled in the art will recognize other mechanisms by which the system could extract the necessary information available at the system to create a unique coupon for each losing bidder, and all such mechanisms are contemplated to be within the scope of the present invention.

The unique coupons are preferably e-mailed to each of the losing bidders of the auction. Each losing bidder could then print out his coupon and redeem the coupon at the associated merchant(s) listed on the coupon. Alternatively, the system may send an e-mail to each losing bidder that contains a hyperlink to a website where the coupon may be downloaded or printed. Still further, the electronic coupon may be sent by the system directly to the one or more associated merchant 90 web site(s) via a communication network, with an e-mail being sent to the losing bidder that includes the identification number of the coupon. The merchant web site could then store the coupon, and if the losing bidder navigates to the merchant's web site to purchase the auction item and supplies the identification number, the merchant would provide the discount to the losing bidder. In yet another method of offering the discount, a unique identifier that identifies the bidder and the discounted auction item may be communicated to the merchant and the bidder. In the preferred embodiment, this is done electronically by transmitting the information to the bidders' s computer and the merchant web site. The bidder could then provide the unique identifier to the merchant to obtain the discount. Other equivalent methods of providing discounts to losing bidders for auction items at associated merchants 90 are available and are within the scope of the present invention.

The administrator of the system preferably charges associated merchants 90 a fee for access to the losing bidders. The fee may include one or more of the following: a fee for items purchased with the discount; a fee for all bidders who click through to the merchants' s site; and a fee for associating the merchant to the discounts. Once a coupon or discount is redeemed by a losing bidder, the merchant preferably communicates with the system that the coupon or discount has been redeemed so that the bidder database 20 and merchant/discount database 50 may be updated. In a preferred automated embodiment, when the coupon or discount is redeemed on a merchant web site, the merchant web site automatically transmits the transaction to the system. In any case, information regarding the fact that the discount or coupon has been redeemed is preferably entered into the bidder database 20 and the merchant/discount database 50.

In an alternative embodiment of the present invention, instead of providing a discount to the losing bidders and/or the merchants, the system preferably transmits an e- mail providing a list of associated merchants 90 of the system offering the auction item to the losing bidders. The losing bidders could then purchase the auction item at any merchant associated with the system at full price. The merchant or the bidder then transmits the details of the purchase to the administrator, and the administrator provides a rebate to the bidder. For providing access to the customer, the merchant preferably forwards a fee to the administrator. If such purchase is to be made on the Internet, the losing bidder preferably is instructed in the e-mail to hyperlink to the merchant from the administrator web site to purchase the auction item. In this way, an affiliate's fee to the administrator for providing access to the customer is automatically processed by the merchant and forwarded to the administrator.

In another alternative embodiment of the present invention, after the system at step

208 of FIG. 2 has accepted a bidder's bid, it may automatically construct a discount on the auction item (or an item that is similar to the auction item) for the bidder. This discount may be provided to the bidder and/or the merchants according to any of the methods described above. These discounts may be provided to every bidder that has submitted a bid on a particular auction item before the system calculates the winning and losing bidders, or they may be sent only to the losing bidders after the system calculates the winning and losing bidders.

In another alternative embodiment of the invention, the system automatically enrolls each of the losing bidders in a raffle for a prize that may or may not be related to the product for which the losing bidders submitted bids. Bidders from multiple auction sessions may be entered in such a raffle. The raffle itself may be conducted by the system, the administrator, by one of the merchants, or by some other third-party vendor. Moreover, the prize may be offered by the administrator, by one of the merchants, or by some other third-party vendor.

The raffle may also be offered in conjunction with the preferred discount embodiment of the present invention. In still another alternative embodiment, in addition to providing a discount to the losing bidders of the auctions, the system, the administrator, one of the merchants, or some other third-party vendor may provide to the losing bidders who purchase the auctioned product other services related to the product. For example, losing bidders who purchase a computer that was auctioned by the system with their system discount may also receive free or discounted Internet access or free or discounted software. These discounts are preferably constructed by the discount generator 60.

Other advantageous features of the present invention will now be described. As noted above, custom calendar generator 70 generates custom calendars for registered bidders based on the preference information they have provided on their respective registration forms. The calendars, preferably in the form of a monthly calendar, provide information on auction items that the bidder may be interested in. Such information preferably includes a brief description of the item and the suggested retail price. The bidder may click on the item to obtain further information about the item, or to bid on the item if the item is currently being auctioned. The calendar is preferably available on the bidder's home web page that he may access, e.g., by navigating to the system web site and inputting his password. Alternatively, the system may transmit periodic e-mails to the bidder informing him of future auctions in which he may be interested.

Also preferably located on the bidder's home page is a push button or collection of push buttons that allow the bidder to enter chat rooms. These chat rooms may be grouped by item category. Yet another push button on the bidder's home page allows the bidder to post comments about the system, a particular item, or a particular auction session.

While the invention has been described in conjunction with specific embodiments, it is evident that numerous alternatives, modifications, and variations will be apparent to those skilled in the art in light of the foregoing description.

Claims

What is claimed is:

1. A method of administering an on-line auction of an item on a web site comprising: posting on the web site a limited number of the item to be auctioned; accepting a plurality of bids for the item; determining the winning and losing bidders; and providing the losing bidders of the auction a discount on the auction item that may be redeemed at one or more merchants associated with an administrator of the web site.

2. The method of claim 1 , wherein the step of providing the discount includes the step of electronically providing a unique discount identifier to the losing bidders that may be inputted at the merchant's web site to obtain a discount on the auction item.

3. The method of claim 1, wherein the step of providing the discount includes the step of posting on the web site unique electronic coupons that can be accessed and printed by the losing bidders.

4. The method of claim 1, wherein the step of providing the discount includes the step of making unique electronic coupons available to the losing bidders via e-mails.

5. The method of claim 1 , wherein the step of providing the discount includes the step of providing to the merchant unique discount identifier information that identifies the losing bidder and the auction item.

6. The method of claim 1 , further including the step of receiving information from the merchant that the discount has been redeemed.

7. The method of claim 6, wherein the step of receiving information includes the step of automatically electronically receiving the information when the discount is redeemed at the merchant's web site.

8. A system for administering an on-line auction comprising: means for posting a limited number of an item to be auctioned; a storage that contains information about at least one merchant associated with the system and the item; means for determining the winning and losing bidders; means for electronically informing the winning bidders of the auction; means for providing the losing bidders of the auction a discount on the auction item that may be redeemed at the at least one merchant.

9. A software program implemented on a host computer administering an on-line auction of an item, said software program allowing the host computer to: maintain a storage containing information about at least one associated merchant that offers the item; post a limited number of the item to be auctioned; accept a plurality of bids for the item; determine the winning and losing bidders; and provide the losing bidders of the auction a discount on the item that may be redeemed at the merchant.

10. A method of administering an on-line auction of an item on a web site comprising: posting on the web site a limited number of the item to be auctioned; accepting a plurality of bids for the item; providing a discount on the auction item to bidders who have made bids on the auction item, wherein the discount may be redeemed at one or more merchants associated with an administrator of the web site.

11. A method of administering an on-line auction of an item on a web site comprising: posting on the web site a limited number of the item to be auctioned; accepting a plurality of bids for the item; determining the winning and losing bidders of the auction; providing to the losing bidders a list of one or more merchants associated with an administrator of the web site that offer the item; receiving information that a losing bidder has purchased the item at the one or more merchants; and providing a rebate to the losing bidder.