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eBay Pulls Plug on Another Auction

September 9, 1999

HOUSTON (AP) _ Internet auction house eBay pulled the plug again on an item up for bids that didn’t pass legal muster. This time, it was a 47 percent share in another Web site.

Priceman.com, a Houston-based site that provides product price comparisons, tried Wednesday to auction nearly half of its equity for at least $10 million.

``Some people have been calling to see if this is real,″ said Neal Verma, president of VermaNet, which operates Priceman.com.

It was the latest in a string of auction interruptions on eBay. The site has had to stop auctions of babies, human kidneys and even cocaine. The company has said all were believed to be hoaxes.

The Priceman.com sale was canceled after a few hours without any firm bids.

``The sale of stock raises a sufficient number of complex and problematic legal issues that we cannot permit such sales to occur on the site,″ said Holly McDermott, spokeswoman for California-based eBay.

Verma, 23, said his company was serious about the listing.

``Some people have been interested and have asked us to fax them our business plan, or executive summary,″ Verma said. ``One guy wanted to know where the $10 million would go. He wanted a detailed marketing plan.″

After going through traditional lines to secure funding for another of their Web sites, ServicesAuction.com, Verma said he wanted to see if a less conventional approach could work.

``We wanted to try something nobody had done before,″ he said.

The biggest goal of the $10 million would have been to fund marketing of Priceman.com, he said.

``You need at least $5 million to create a buzz and get your name above all the noise,″ Verma said.

The brief eBay listing might have done the trick, somewhat. Priceman.com received so much traffic after the eBay listing that it couldn’t handle it.

``Due to the sudden traffic, we are having technical problems,″ read the eBay message that greeted visitors.

Tom Baudhuin, special counsel for the Fort Worth district office of the Securities and Exchange Commission, said VermaNet may have offered its shares improperly.

``Any time you offer stock publicly, there has to be a registration.″

Verma said he believed the company followed correct policy in making the offering on eBay.

For now, the company will continue to follow up with those who showed interest, he said.

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