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Web Site Offers Glimpse of Net's Marketplace Possibilities

May 13, 1996|DANIEL AKST

There are those who believe that the true power of the Internet won't be realized until it assumes its ultimate role as a medium that brings buyer and seller together, in the broadest possible sense.

Certainly, an information medium as vast as the Internet can't help but contribute to more efficient markets simply by how effectively it can be used to gather and disseminate information. In the relatively limited realm of computer supplies, for instance, I have used the Internet to learn of other users' experiences with certain products and to look up published reviews of these products on World Wide Web pages run by computer magazines.

Now comes an advertiser-supported Internet site called Price Watch, which offers a startling glimpse into how the Internet might more directly eliminate market inefficiencies.

Price Watch is simple. Point your Web browser to and you are confronted with a two-frame screen. In the small top portion, there is a search field. Type in the name of the computer product you are looking for, as specifically or generically as you like, and click Search.

For example, I typed in Visioneer Paperport Vx, and Price Watch returned a list of vendors carrying the product, complete with 800 numbers. Best of all, the list was in ascending order of price, ranging from $289 to $369. (Obviously, you will want to take account of shipping, vendor reliability and so forth in your purchasing decision. Bear in mind that many mail-order houses will match lower prices you find elsewhere, so if you have a favorite dealer, you can use Price Watch to find the lowest price and then take it to your favorite outlet.)

I also tried typing in "monitors 17," and sure enough, Price Watch returned a list of 17-inch monitors in price order, regardless of features or performance. Each monitor listed offered a detailed description, including, in most cases, dot pitch and screen resolution.

The lower three-quarters of the Price Watch screen contains a sort of price headline service, describing unusually good deals and a ticker of prices on what might be called computer commodities--RAM, motherboards and so forth.

Price Watch strikes me as potentially revolutionary. I'm no economist, but it seems to me that the definition of a perfect market is one in which there is heavy competition, buyers have all possible information and transaction costs are minimal. Computer products seem ideal for an outfit like Price Watch. If you are buying a shrink-wrapped product that will be supported by the manufacturer in any case and want the convenience of home delivery, why not find the lowest price? Who will be able to charge extra just because buyers don't know any better?

But why stop at computer products? Imagine a hospital that buys rubber gloves, gauze and a thousand other supplies, and imagine a service like Price Watch that goes one step further, assigning orders automatically to the lowest possible bidder among carefully screened vendors or perhaps to the supplier with the lowest overall price on a diversified total order. Suddenly, purchases that were once made retail, or even wholesale, are now made at a kind of auction.

Indeed, Michael Garces, president of San Antonio-based Price Watch Corp., says he had the commodities markets in mind when he created his system, which does try to screen out dealers who aren't established and authorized, and doesn't accept payments from dealers, at least for now. Timeliness is a big advantage of Price Watch. Garces notes that ads in computer magazines often have lead times that can stretch to weeks, whereas Price Watch posts prices instantly.

Will sellers in the future be able to compete on more than just price? Of course. Service will count; I have a favorite mail-order vendor. Their prices are quite low, but I don't mind paying a little more than rock bottom, because in my experience they are knowledgeable, honest and make returns easy. Other buyers may value face-to-face interaction or a chance to look at things in person.

There are some significant hurdles between the Internet as it stands and the goal of an effective medium for bringing together buyers and sellers. One big one is the embryonic state of secure payment systems permitting buyers to pay sellers to mutual satisfaction without fear of hacker attack. Another is a means of conducting very small transactions, so I can sell 10,000 copies of a short story or how-to article for 25 cents each.

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