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29 Mar 2001, Germany

Hi Dr. Ecommerce,

I have a general interest in online procurement in the public sector. Recently, I have found some interesting articles on "reverse auctions" as a procurement tool. Although having found interesting information on the tool of reverse auctions, I wonder where the term "reverse auction" comes from or where it was first used. Can you help me out?

Thanks and best regards

Ivan

Dear Ivan:

The concept of a reverse auction is, of course, very old. And I can find no record of any first reverse auction. Certainly public procurement has long been based on a sort-of-reversed auction concept.

With the advent of the Internet, the concept of reverse auctions have become widespread. In the USA, where it is possible to patent business processes, the company PriceLine patented an Internet reverse auction concept in 1998. However, this has proven very controversial as many people claim it is an obvious process and should not have been patented.

Indeed, at least two companies claim to have been doing on-line reverse auctions from before that time (see http://www.zdnet.com/intweek/print/980817/345090.html and http://www.wired.com/news/business/0,1367,17392,00.html).

Good luck,

Dr. Ecommerce

NOTE: If you know of earlier instances of the use of the term: "reverse auction", please e-mail me.