Andale Buys Honesty to Tackle Low End

Section: 10. Internet

Online auction management service Andale Inc will today announce it is to buy rival auction community site Honesty.com Inc for an undisclosed sum, in order to get its hands on a fast-growing user base of sellers. The combined company will have about $1.7 billion worth of auctions passing through its systems per month, Andale CEO Munjal Shah claims, or about 31% of all eBay Inc auctions.

Andale targets itself at medium-sized sellers (self-employed home traders and small businesses) and is currently targeting larger resellers and vendors, while Honesty has a thriving community of low-end individual vendors, which is apparently increasing by about 11,000 users per week. Chicago-based Honesty also runs the Online Traders' Web Alliance (OTWA), a community of sellers who provide mutual support and selling advice.

Together, Shah reckons, the companies will have a user base of some 600,000 – though he won't say how many each company brings to the table, or what percentage of users are members of both sites – which is 200,000 more than AuctionWatch Inc, one of it closest rivals. By buying Honesty, which will be held as a wholly-owned subsidiary, Andale hopes to get its hands on the first rung of an upgrade path to its own commission-based services.