Abstract:
A method for conducting a buyer-initiated variable price online auction comprises receiving from a buyer a description of an item; starting an auction for the item; providing the description to a first and a second potential seller; accepting a first and a second bid for the item from the first and the second potential seller, respectively; and ending the auction, whereupon a winner of the auction is automatically determined from among the first and the second potential seller based on an association of the winner with a winning bid automatically determined based on the first and the second bid. Auction result notifications may be automatically provided to the buyer, the winning bidder and bidders who do not win the auction. The buyer may specify a maximum price the buyer is willing to pay for the item. The online auction may be facilitated by a network auction facility in communication with network nodes used by the buyer and potential sellers.

Description:
BACKGROUND OF INVENTION  
       [0001]     The present invention relates to computerized processes for transacting in goods and services, and more particularly, to auction-style computerized processes for transacting in goods and services.  
         [0002]     Seller-initiated online auctions are known. In such an auction, a seller typically posts on a commercial website, such as ebay.com or auctions.yahoo.com, a written description and images of an item for sale along with terms and conditions for the auction and sale. Auction terms and conditions include, for example, auction start and end time and minimum bid. Sale terms and conditions include, for example, payment options, shipping terms and warranty information. Hosting and running of the auction is typically facilitated by software resident on the auction-capable website. Potential buyers who visit the website during the auction, and whose search criteria match the subject matter of the auction, are typically apprised of the web page where the auction is hosted and have the opportunity to bid on the auctioned item. At the end of the auction, the potential buyer who placed the highest bid is declared the winner of the auction and is obliged to purchase the item from the seller.  
         [0003]     While seller-initiated online auctions have proven wildly successful in establishing a global online marketplace, they have not fully exploited the potential of this emerging marketplace. A significant shortcoming of seller-initiated online auctions is that potential buyers are limited to the items offered. Accordingly, potential buyers with specific wants are often left with an unhappy choice of either waiting indefinitely for an item that fully meets their criteria to come up for auction or, alternatively, bidding on a suboptimal substitute at risk that an item better satisfying their criteria may become available soon thereafter.  
         [0004]     Buyer-initiated online auctions are also known. In such auctions, a buyer typically posts on a commercial website, such as priceline.com, a fixed price that the buyer willing to pay for a particular item, such as an airline ticket or hotel room. A registered group of potential sellers is typically apprised of the fixed price offer and given the opportunity to accept it during a specified time period, with the buyer being obliged to purchase the item from the first willing seller.  
         [0005]     While known buyer-initiated online auctions have filled an additional niche, they too have suffered from certain shortcomings. First, the subject matter of the items on which a buyer can make a purchase offer has been extremely limited. Second, the group of potential sellers apprised of the purchase offer has been extremely limited. Third, the buyer may set a price higher than the price at which one or more of the potential sellers are willing to sell the item, and is therefore not guaranteed to receive the lowest price. In other words, potential sellers are not forced to compete on price.  
       SUMMARY OF THE INVENTION  
       [0006]     The present invention, in a basic feature, provides a method for conducting a buyer-initiated variable price online auction.  
         [0007]     In one aspect, a method for conducting an online auction comprises the steps of receiving from a buyer a description of an item; starting an auction for the item; providing the description to a first and a second potential seller; accepting a first and a second bid for the item from the first and the second potential seller, respectively; and ending the auction a specified time after starting the auction, whereupon a winner of the auction is automatically determined from among the first and the second potential seller based on an association of the winner with a winning bid automatically determined based on the first and the second bid and an auction result notification is automatically provided to the buyer.  
         [0008]     In another aspect, a method for conducting an online auction comprises the steps of receiving from a buyer a description of an item and a maximum price; starting an auction for the item; providing to a first and a second potential seller the description and the maximum price; accepting from the first and the second potential seller a first and second bid, respectively, each at or below the maximum price; and ending the auction a specified time after starting the auction, whereupon a winner of the auction is automatically determined from among the first and the second potential seller based on an association of the winner with a winning bid automatically determined based on the first and the second bid.  
         [0009]     In another aspect, a method for conducting an online auction comprises the steps of receiving at a network auction facility from a first network node being used by a buyer a description of an item; starting at the network auction facility an auction for the item; providing by the network auction facility to a second network node being used by a first potential seller and a third network node being used by a second potential seller the description; receiving at the network auction facility from the second network node and the third network node a first bid and a second bid, respectively; and ending the auction, whereupon the network auction facility determines a winner of the auction from among the first and the second potential seller based on an association of the winner with a winning bid determined based on the first and the second bid.  
         [0010]     These and other aspects of the invention will be better understood by reference to the detailed description of the preferred embodiment, read in conjunction with the drawings briefly described. Of course, the invention is defined by the appended claims. 
     
    
     BRIEF DESCRIPTION OF THE DRAWINGS  
       [0011]      FIG. 1  is a network for conducting a buyer-initiated online auction.  
         [0012]      FIG. 2  is a network node for participating in a buyer-initiated on-line auction.  
         [0013]      FIG. 3  is a Web auction facility for hosting a buyer-initiated online auction.  
         [0014]      FIG. 4  is an item registration Web page for a buyer-initiated online auction.  
         [0015]      FIG. 5  is an exemplary auction Web page for a buyer-initiated online auction.  
         [0016]      FIG. 6  is an exemplary bid placement Web page for a buyer-initiated online auction. 
     
    
     DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT  
       [0017]      FIG. 1  shows a network for conducting a buyer-initiated online auction. Network nodes  110 ,  120 ,  130 , which may be personal computers, workstations, personal data assistants (PDAs), Internet phones, and the like, communicate over the Internet  140  with a Web auction facility  150  that hosts an auction-capable website. Communication over Internet  140  is achieved using a standard Internet communication protocol, such as HyperText Transfer Protocol (HTTP), and is facilitated by Web browser applications (not shown), such as Internet Explorer, running on nodes  110 ,  120 ,  130 , respectively. In operation, human users of nodes  110 ,  120 ,  130  specify Web pages at Web auction facility  150  they would like to view by identifying Uniform Resource Locators (URL) to their respective Web browser software applications. The Web browser applications obtain an Internet Protocol (IP) address of Web auction facility  150  from, for example, a domain name service (DNS) (not shown), open connections to Web auction facility  150  and submit Web page requests (e.g., an “HTTP get” messages) to Web auction facility  150 . In response to the Web page requests, Web auction facility  150  returns the requested Web pages, typically in the form of text documents in a standard markup language such as HyperText Markup Language (HTML). The Web browser applications display the requested Web pages on the end systems  110 ,  120 ,  130 .  
         [0018]      FIG. 2  shows node  110  in greater detail. Node  100  includes a microprocessor  210 ; a random access memory (RAM)  220 ; a read only memory (ROM)  230 ; a user interface  240 , for example, a liquid crystal display or a cathode ray tube; an alpha-numeric input device  250 , for example, a keyboard or keypad; a cursor control device  260 , for example, a mouse or directional keys; and a network interface  270 , all of which are interconnected on a bus  280 . RAM  220  has stored thereon a Web browser application, such as the above-mentioned Internet Explorer. Microprocessor  210  executes instructions provided by the Web browser application and a connection is established, via network interface  270  and Internet  140 , to Web auction facility  150 . Information relating to a buyer-initiated auction may then be advantageously exchanged with Web auction facility  150 .  
         [0019]     Information is exchanged on the established connection in discrete information units which may be formatted according to any of various data link layer and network layer protocols, for example, Ethernet, IP, MPLS (Multiprotocol Label Switching), ATM (Asynchronous Transfer Mode) and Frame Relay. The discrete information units may traverse any number of multiplexing nodes, for example, switches and routers, en route between node  110  and Web auction facility  150 . Although node  110  is shown directly connected to Internet  140 , it should be appreciated that node  110  may be indirectly connected to Internet  140  via a multi-node home network or enterprise network, for example. Additionally, node  110  may be connected to Internet  140  via a wired connection, such as a dialup phone connection or wired Ethernet connection, or a wireless connection, such as a cellular telephone connection or wireless Ethernet connection.  
         [0020]      FIG. 3  shows Web auction facility  150  in more detail. Facility  150  includes an auction server  310  which has access to a user database  320 , an auction database  330  and a search database  340 . Auction server  310  includes one or more microprocessors (not shown) running an auction management software application (not shown) which will be described in greater detail.  
         [0021]     User database  320  stores personal and auction identification information for each user of facility  150 . Personal information includes user information and contact information. User information includes a username and password. Contact information includes a mailing address and an email address. Auction identification information includes an alpha-numeric identifier assigned to each auction presently hosted by facility  150  in which the user has expressed interest. This includes auctions for which the user is the potential buyer (i.e. auctioneer), potential seller (i.e. bidder) and a mere observer.  
         [0022]     Auctions database  330  stores auction details for each auction presently hosted by facility  150 . Auction details include auction identification information, auction status information and a bid history. Auction status information includes a title and written description of the item being auctioned; a maximum bid (i.e. maximum purchase price), if any, for the item; an auction start time; an auction duration; payment options for the item; shipping terms for the item; and special instructions, if any, for the item. The bid history includes a username and a bid amount for each bid that has been placed on the item.  
         [0023]     Search database  340  stores search and auction identification information for each auction presently hosted by facility  150 . Search information includes search elements. Search elements include keywords extracted from the title of the item being auctioned.  
         [0024]     In a preferred embodiment, conducting a buyer-initiated online auction within the network of  FIG. 1  involves three basic steps: item registration; auction; and result determination.  
         [0000]     Item Registration  
         [0025]     When a user on a network node, for example, node  110 , determines an item the user wants to purchase by way of an online auction, the user registers the item with facility  150 . Particularly, the user, via the Web browser on node  110 , connects to the home page of facility  150 , which is rendered by auction server  310 . The home page, when displayed on node  110 , includes a selectable HTML interface element, which may be in the form of a checkbox, radio button or an option on a pull-down menu, for example. The selectable HTML interface element indicates to the user that, if selected, the user will be prompted to specify terms and conditions for an auction and purchase of an item for which the user is the potential buyer. In a simple example, the selectable HTML interface element may be a radio button that reads “Buy.” When the interface element is selected, auction server  310  directs the user to a second Web page that presents the user with a logon prompt and an instruction to logon. The user inputs a username and password, which auction server  310  verifies by resort to user database  320 . Upon authenticating the user, auction server  310  directs the user to a third web page, namely, an item registration Web page. The item registration Web page includes an HTML registration form into which the user, as the potential buyer of an item, or auctioneer, sets the terms and conditions for auction and purchase.  
         [0026]      FIG. 4  shows an item registration Web page  400  for a buyer-initiated online auction. Page  400  includes a title field  410  for specifying the title of the item sought by the user. Page  400  further includes a description field  420  for specifying a detailed written description of the item. Page  400  further includes a maximum price field  430  for specifying a maximum amount the buyer is willing to pay for the item. Page  400  further includes a start time pull-down menu  440  and an auction duration pull-down menu  450  for selecting the start time and duration of the auction, respectively. Page  400  further includes a payment options field  460  for specifying how the buyer is willing to pay for the item, a shipping terms field  470  for specifying shipping terms for the item and a special instructions field  480  for specifying the buyer&#39;s additional terms and conditions for the auction and purchase, for example, timing of payment, timing of item delivery, packing instructions, warranty terms and geographic or other restrictions on sellers. Finally, page  400  includes a “SUBMIT” button  490 .  
         [0027]     Naturally, fields  410 ,  420 ,  430 ,  460 ,  470  may be replaced or supplemented with suitable HTML interface elements, such as checkboxes, radio buttons or pull-down menus to facilitate the item registration process. Additionally, certain of the fields and/or interface elements may have specified default values. For example, start time field  440  may have a default of “NOW”, auction duration field  450  may have a default of “7 DAYS”, shipping terms field  470  may be supplemented with seller and buyer checkboxes with buyer checked as the default, and so on. Moreover, additional information may be required from the buyer, such as identification of one or more general subject matter categories for the item that may be used to facilitate location of the auction by potential sellers. For this, the potential buyer may be required to select a subject matter category from a pull-down menu on page  400 . Furthermore, functionality may be included allowing the buyer to upload images of the desired item.  
         [0028]     Once the buyer is satisfied with the information specified, the buyer clicks on or otherwise activates “SUBMIT” button  490  to complete item registration. Auction server  310  checks the specified information for completeness and, if complete, assigns an identifier to the auction and stores the auction details in auctions database  330 . Auction server  310  further creates, using the identifier, a URL to a common gateway interface (CGI) program stored on auction server  310  which the user and potential sellers can call to have a Web page with current status information on the auction generated and rendered. Auction server  310  further extracts keywords from title field  410  and stores the keywords, full title and CGI URL in search database  340 . Finally, auction server  310  retrieves the buyer&#39;s email address from user database  320  and notifies node  110  of the CGI URL by sending an email message to the user&#39;s email account.  
         [0000]     Auction  
         [0029]     The auction starts at the time specified on the auction start time menu  440  and ends when the time specified in auction duration menu  450  has elapsed. During the auction, users interested in selling the item (i.e. potential sellers) sought by the user who initiated the auction (i.e. buyer) compete for the right to sell the item to the buyer through a bidding process. For simplicity, bid placement will be described by reference to the actions of a user of node  120 , although it will be understood that the users of other nodes, for example node  130 , place bids by following the same procedures.  
         [0030]     User of node  120  connects to the home page of facility  150 , which is rendered by auction server  310 . The home page, when displayed on node  120 , includes a text field for entry of search keywords. When the user submits keywords, auction server  310  looks up the keywords in search database  340  and finds matching auctions. Auction server  310  renders a Web page displaying the title of each matching auction in the form of a link to the CGI URL for the auction. When the user clicks on or otherwise activates the title link, the CGI URL is activated and a Web page with the current auction details is rendered to the user.  
         [0031]      FIG. 5  shows an exemplary auction Web page  500  for a buyer-initiated online auction. Web page  500  presents to the user the current status of the auction. In this example, the auction is for a Ty Cobb baseball card. Page  500  includes an auction title  510  followed by an item description  520 . Item description  520  is followed by payment options  530  and shipping terms  540 , which are in turn followed by special instructions  550 . After special instructions  550  are shown the time remaining in the auction  560 , the current low bid  570  and low bidder identity  580 , and the total number of bids  590 . Finally, page  500  includes a “BID” button  595  allowing the user to compete in the auction as a potential seller by placing a lower bid than the current low bidder. If the user clicks on or otherwise activates the “BID” button, auction server  310  directs the user to a second web page (not shown) which presents the user with a logon prompt and an instruction to logon. The user inputs a usemome and password, which auction server  310  verifies by resort to user database  320 . Upon authenticating the user, auction server  310  directs the user to a third web page, namely, a bid placement page, which includes an HTML registration form into which the user, as the potential seller of an item, places a bid for the item.  
         [0032]      FIG. 6  shows an exemplary bid placement Web page  600  for a buyer-initiated online auction. Page  600  presents to the user a bid history for the auction. Page  600  includes an auction title  610  followed by the current low bid  620  and low bidder  630 . Low bidder  630  is followed by a bid history  640  showing previous low bidders. After bid history  640  is a bid amount field  650  and “PLACE BID” button  660 . Once the user completes field  650  and is satisfied with the information specified, the user clicks on or otherwise activates “PLACE BID” button  660  to submit the bid. Auction server  310  checks the submitted bid against the bid history in auctions database  330  to ensure that it is lower than the current bid and, if it is, updates the bid history in auctions database  330 . Auction server  310  further notifies the user whether the bid has been successfully placed.  
         [0033]     In one embodiment, called incremental price bidding, the current bid against which the submitted bid is compared is not necessarily the current low bid identified on page  600  (i.e. $1700). In this embodiment, the current low bid in the auction is an amount that is one bid increment lower than the bid of the second lowest bidder. Thus, in this embodiment, Shoeless Joe may have placed a bid of $1500, but since Hugh Duffy is the next lowest bidder and placed a bid of $1701, and since the bid increment is $1, the current low bid is shown as $1700. Accordingly, for the bid submitted by the user of node  120  to be successfully placed, it would have to be lower than $1500.  
         [0034]     In an alternative embodiment, called fixed price bidding, the current bid against which the submitted bid is compared is the current low bid shown on page  600  (i.e. $1700). In this embodiment, the current low bid in the auction is always the amount of the bid placed by the lowest bidder, regardless of the second lowest bid. Thus, in this embodiment, Shoeless Joe placed a bid of $1700, and for the bid submitted by the user of node  120  to be successfully placed it must be lower than $1700.  
         [0035]     At the end of the auction, the current low bid becomes the final low bid and the current low bidder becomes the seller. As described in the preceding two paragraphs, the current low bid is either an amount that is one bid increment lower than the bid of the second lowest bidder in an incremental price bidding context, or the lowest bidder&#39;s bid in a fixed price bidding context.  
         [0000]     Result Notification  
         [0036]     At the end of the auction, auction server  310  retrieves the bid history for the auction from auctions database  330  and determines the seller&#39;s username through association with the final low bid. Auction server  310  uses the seller&#39;s username to retrieve the seller&#39;s email address from user database  320 . Auction server  310  further uses the buyer&#39;s usemome to retrieve the buyer&#39;s email address from user database  320 . Auction server  310  then notifies node  120  being used by seller of the auction result by sending an email message to their seller&#39;s email account, and notifies node  110  being used by buyer of the auction result by sending an email message. The email message sent to the seller includes at least a congratulatory message, the buyer&#39;s email address, and a CGI URL which the seller can call to have a Web page with final status information on the auction generated and rendered. The email message sent to the buyer includes at least a congratulatory message, the seller&#39;s email address, and a CGI URL which the buyer can call to have a Web page with final status information on the auction generated and rendered. The Web page with final status information may, for example, be an updated version of auction Web page  500  in which current low bid  570  and low bidder identity  580  are replaced with a winning bid and winning bidder identity, respectively, and in which “BID” button  595  is replaced with the buyer&#39;s and the seller&#39;s email addresses. Other bidders on the item who did not place the final low bid (e.g. Shoeless Joe) may be notified by email that they did not win the auction in a similar manner. Naturally, no congratulatory message would be included in such third party auction result notifications.  
         [0037]     It will be appreciated by those of ordinary skill in the art that the invention may be embodied in other specific forms without departing from the spirit or essential character hereof. The present invention is therefore considered in all respects to be illustrative and not restrictive. The scope of the invention is defined by the appended claims, and all changes that come within the meaning and range of equivalents thereof are intended to be embraced therein.