Silicon Valley auctions show demise of dot-coms

Looking for one-stop shopping where you can pick up a Kenmore refrigerator, 22 black trash cans and a Dell PowerEdge 6300 server? Welcome to the latest phase of the Internet revolution, the dot-com auction.

“We’ve had between 10 and a dozen of these auctions in the last month and probably sold over US$25 million in merchandise,” said David Charyn, senior vice-president of 40-year-old San Francisco auction house Charyn Auctions. “We have four more scheduled for next month.”

A recent auction consisted of merchandise from Bigwords Inc., Techplanet Inc., and Craft Internet Holdings Inc., all of which have either completely shut up shop or been forced to reduce their levels of staffing and equipment. These four are hardly alone in their condition, as a flagging economy continues to take its toll on young Internet companies. Last month alone, 49 dot-coms failed and 112 were acquired by other companies, according to a recent study by

Sure, it can be depressing to walk into a nondescript warehouse and see an entire office on the chopping block, but once you get over the sight of a pigeonhole mailbox with the names of laid-off employees still on it and the file cabinets that still have “Bigwords Inc.” magnets on them, you quickly begin to see the appeal.

What makes it appealing is the 800 desktop PCs with monitors and 12 Sun Microsystems Inc.’s Ultra 10 servers standing on shelves across from 80 notebook computers made by companies including Sony Corp., Toshiba Corp., Dell Computer Corp. and Gateway Inc. Something for everybody, so it seems.

“It’s basically a lottery,” said Jon Welch, vice-president for technology at Berkeley, Calif.-based architectural rendering company Vizit3D.

“Sometimes people end up bidding at higher than market prices, but sometimes, when not a lot of people know what something is, you can get it for a tenth of what it’s worth.”

Welch has been to a few auctions, purchasing monitors, computers and networking peripherals for his company. This time he had his eye on a few items of office equipment and an Apple Computer Inc. Macintosh. He managed to keep his attention away from the lava lamps, random items of promotional clothing, and the guitar autographed by rock band Blink 182, which sat in the corner.

Charyn estimates that the dot-com auction business will see roughly US$3 billion in used equipment pass through over the next two years. Strangely, it seems the only people not taking advantage of the auctions are dot-com start-ups.

“Actual start-up dot-commers usually have enough startup capital so they can buy everything new,” he said.

Although there were a few people glancing at the Fenders guitars, Marshall amplifiers and the five-piece drum set, there didn’t seem to be a lot of competition for the seven-foot pea green sofa and matching overstuffed chair or the designer lava lamps. Charyn didn’t seem worried, however.

“This is a new market, the explosion of the dot-com auctions, and we’re all fighting for market share,” he said. “There’s good competitive fun, but it’s a great industry to be in.”

However, there is no such thing as a “typical” auction attendee, Charyn said.

“You get everyone from brokers to end users in here,” he said. “Some people come in here to look at a server, but the next thing they know they have all new furniture in their office. It’s like a super flea market.”

Others come just to look for a single home computer at a discount price. Joe Pardini and Greg Maze, who both work in San Francisco, came looking for PCs – Pardini for a desktop and Maze for a laptop. While other bargain hunters seemed pleased with what they found, Pardini wasn’t very impressed.

“Most of these desktops were just workstations, so they need upgrades,” he said. “Some of them don’t even have a sound card.”

Charyn Auctions in San Francisco is at

– IDG News Service