Online Auction Business: A River Runs Through It

SAN FRANCISCO -- eBay (EBAY Quote) shares slipped Monday on news Amazon.com (AMZN Quote) will enter the online auction business, threatening eBay's reign as the foremost online auction house.

According to published reports, Amazon will offer users a chance to buy or sell most anything and also has signed up businesses that will run auctions on the site. Amazon.com was up 11, or 8%, at 150 1/16. eBay was down 5 1/2, or 3.5%, at 149. Amazon's online auctioning foray was first rumored on Friday.

News of the move pressured other stocks in the sector as well. uBid (UBID Quote), which unlike eBay doesn't offer person-to-person auctions, was down 1 1/2, or 2%, at 72 1/4, and OnSale (ONSL Quote), which sells computer products via auctions, was down 1, or 3%, at 34 3/8.

Derek Brown, an analyst with Volpe Brown Whelan, said he thought entering the auction business was "a pretty smart move," but he voiced a number of reservations. Brown says that Amazon prides itself on customer service and being an online auctioneer doesn't build on that strength. ...