AUCTION.COM; INTERNET GAVEL FALLS WITH A CLICK.

Byline: David Bloom Daily News Staff Writer

Going once. Going twice. Going crazy.

Whether it's a black-velvet painting of Satan or a VIP badge to Area 51, vintage clothing or spare computer parts, Mark McGwire home-run balls or a used bulldozer, chances are, someone, somewhere, is selling it on eBay, the massive online auction site, or on one of its competitors now springing up around the Internet.

Auction sites are the net's latest fad, generating a subculture of Yankee traders swapping trash and treasure in the world's largest flea market.

No less than William Gibson, the man who coined the term ``cyberspace'' in his seminal sci-fi novels of the mid-'80s, recently confessed in Wired magazine that eBay was the one place online that enthralled his notoriously anti-net mind.

Day after day, for more than a year, Gibson trolled eBay's Clocks, Timepieces: Wristwatches pages from his Vancouver home, looking for the antique wristwatch from the mists of his memory.

He never quite found that particular watch, but once there, found plenty else to hold his interest. And he's not alone.

``I just stumbled upon it,'' said Kevin Kennedy of Toluca Lake. ``I didn't know what the hell I was doing. I got on it, and man, is it addictive.''

Kennedy checks eBay every day, and has for about a year, always scouring the collectibles area for Lone Ranger memorabilia.

He estimates he's bought more than 120 items on eBay, including ``some of the holy grails'' of Lone Ranger collectibles, like 1930s-era gizmos available only to those who bought the first comic book about the Masked Man.

``I picked it up in tough bidding, and got it for $280,'' said Kennedy somewhat exultantly.

Sometimes he's not so lucky. Someone else swoops in during the final seconds of an auction, upping the bid just enough to ``snipe'' it away. There even are people who sell software to help automate the bidding process, though eBay has clamped down on that substantially in recent months.

About 1 million people visit eBay's roughly 800,000 auctions every day, scouring more than 1,000 categories for that which makes them whole, said Steve Westly, eBay's vice president of marketing and business development.

He insists, however, that eBay's success is ``something deeper than commerce,'' something more than just moving goods.

``It's kind of about shared passions,'' Westly said. ``A real key emotional part of this has been, say you've been collecting Barbies for a long time, and your wife doesn't understand it and you can't tell your co-workers, and all of a sudden you've found people in the same boat, from all over the world. It's a much deeper tie that's being formed.''

Included on eBay's site are discussion areas where like-minded lovers of Barbies, bulldozers or black velvet can congregate and commiserate over what they've found, and what they couldn't quite snag.

Given the intense interest, it's little wonder that the company, which went public offering its stock at $18 a share last fall, hit as high as $315 a share recently, making its founders wealthy people three years after the company began.

The success has spawned plenty of imitators, such as OnSale.com, Webauction.com and Yahoo!.Auctions, and specialists such as Egghead Online's Surplusauction.com that have applied the basic idea to a variety of niches.

``It's an ideal application for an open trading place like the Internet, where players can find the market-clearing price for an item,'' said Evie Black Dykema, an analyst at Forrester Research in Cambridge, Mass. ``Even Joe Consumer can become a vendor.''

Dykema said other kinds of auctions also are booming, such as those between companies, a market slice projected to balloon into a $52 billion business by 2002.

Business-to-business auctions will transform how companies buy many supplies, whether they be raw materials or office products, and how they clear their shelves of outdated and leftover goods, Dykema said.

Even venerable auction house Sotheby's just created an online auction site, at www.sothebys.com, that will specialize in higher-end antiques, art, collectibles and jewelry.

Part of the reason for the success of auction sites, which helped force Sotheby's to join in or be left behind, is that the process works well for sellers as well as buyers, Dykema said.

``There are clear benefits to all the parties,'' Dykema said. ``There's a strong economic rationale for all the parties. In some form, online auctions will be here to stay.''

One who already has seen her business transformed is Sharon Edelson. She's been selling collectibles, antiques and vintage clothing for about eight years, most of that time in antique malls and shows in and around the San Fernando Valley.

But for the past eight months, the Studio City resident has run virtually her entire business through eBay, auctioning off everything from Erte bronze statues to fan magazines for the Monkees.

``It's much easier for the dealer; there's much less overhead; I have a lot more free time,'' said Edelson, ticking off the advantages. ``It's totally a different pace. In addition, I can do it at my own leisure. I can hop on the computer at 1 in the morning and start an auction if I want.''

Edelson cautions that the process is a little more challenging for dealers than sellers, though both have to register to participate in deals on eBay or Yahoo!.Auctions.

To begin with, eBay charges 25 cents to $2 to auction an item off, then charges 1 percent to 5 percent of the sale price as commission.

``The commission is so nominal it's great,'' said Edelson. ``An (antique) mall will charge you anywhere from $150 for a small showcase to $350 or even more (for rent), as well as a 13 percent commission on total sales. It's very tough to make money. I don't know how some of the dealers do it.''

That part of the process is simple: America Online, Web sites such as GeoCities and Fortune City and most Internet service providers all offer free Web storage space.

But you also have to master FTP, the file-transfer protocol used to move those pictures to a storage site, then link them to your sale site, Edelson said.

Edelson further simplifies her picture-taking process by using a Sony Mavica MD-7 digital camera, which takes Internet-ready photos in JPEG format and saves them to floppy disks for quick transfer to her computer.

On Monday, eBay said it also would begin showing 1-by-1-inch thumbnails of those photos in the browsing area, to make its pages look more like a catalog, said spokeswoman Jennifer Chu. She also acknowledged that the company is trying to figure out other ways to ease the picture storage and posting process.

The scariest part of the whole experience is that it requires some significant trust in total strangers, generally living far away, sometimes even on other continents. EBay explicitly tells users ``caveat emptor,'' because a small percentage of dealers or buyers are frauds.

Growing criticism of the company's hands-off attitude led it recently to beef up the protections it offers, including free insurance, with a $25 deductible, for any deal up to $200, said Westly. That will cover more than half of all the site's transactions.

But if you're the guy dealing in the used bulldozer, or the full-length sable coat, Westly said you'll still probably want to use an escrow service, which oversees the transfer of money and product for a small fee. EBay links people to one such service, and others are popping up on the net.

You also can check someone's reputation in eBay's Safe Harbor area, where a discussion area allows you to post reviews of buyers and sellers and check their reputations.

That word-of-mouth approach can be of little help when dealing with an unknown newcomer or a dedicated fraud who changes his eBay ``handle'' to avoid being thrown off the site.

But even there, the company has been tightening up online identifications, even allowing you to spend $5 through the Equifax credit bureau to provide identity verification, Westly said.

Dykema said the recent anti-fraud moves were ``steps in the right direction. It's a classic security issue, which is magnified because you can't brand consumers. It's a slippery issue.''

Just this week, the New York Post reported that the New York City Department of Consumer Affairs was investigating eBay over a user's complaint about buying fraudulent collectible baseball cards through one of its auctions.

The department declined comment on the investigation.

EBay's Chu said, ``They are looking at how eBay works. But they're also investigating people using eBay. Fraud happens in a tiny percentage of the sales we conduct. When people do have a problem, we advise them to talk to law enforcement. We work closely with them when these things come up. We want to help catch the bad guys.''

All that said, Kennedy and Edelson said this postmodern bazaar is no thieves' market.

``It is an honor thing, but I've never had a bad experience,'' Kennedy said.

``I personally have had minimal problems, maybe 1 percent,'' Edelson said.

Other than that, Edelson said, the worst thing about being an eBay seller was ``standing in line in the post office during the holidays.''

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5 Photos

Photo: (1--Cover--Color) On the cover: Sharon Edelson sells collectibles, antiques and vintage clothing through eBay, auctioning off everything from Erte bronze statues to fan magazines for the Monkees.

(2--5) Whether it's a black-velvet painting of Satan, a VIP badge to Area 51, a Texaco toy truck bank or a chrome-plated ``Star Wars'' Pez dispenser, it's likely on the Internet auction block.