TWay’s Focus on Domestic Markets Avoids the Uncertainty of Operating in Foreign Lands

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Bigger on-line auction sites admit there are many risks involved in operating their business in overseas countries.

Online auction site TWay.com said today it has no intentions of expanding into overseas lands, where the risks are high and the benefits are questionable.

TWay is a small but customer-focused online auction site that does not charge listing fees. Company officials say they believe that growth will be more manageable and less risky if the company remains focused on the U.S. marketplace.

“The giants of our industry are investing heavily overseas because they do not believe they can sustain their growth rates if they don’t set up operations in foreign lands,” said Dean Burnetti, TWay’s president. “They may be right about that, but they also have to admit that there are some major risks involved in that strategy.”

In a report filed with the Securities & Exchange Commission on Oct. 25, industry giant EBay listed a number of the risks involved in their aggressive recent overseas investments.

“Our international expansion has been rapid and we have only limited experience in many of the countries in which we now do business,” EBay said. “Our international business, especially in Germany, the U.K., and South Korea, has also become critical to our revenues and profits. Net revenues outside the United States accounted for approximately 42% and 46% of our net revenues in 2004 and the first nine months of 2005, respectively.”

“In many countries, we compete with local companies who understand the local market better than we do, and we may not benefit from first-to-market advantages,” EBay said. “We may not be successful in expanding into particular international markets or in generating revenues from foreign operations.”

“For example, in 2002 we withdrew from the Japanese market. Even if we are successful, we expect the costs of operating new sites to exceed our net revenues for at least 12 months in most countries.”

Pressure to satisfy investors leads big companies to take on risks that can ultimately lead to declines in customer service, Burnetti said.

“It is not a strategy that makes sense for us to pursue,” Burnetti said. “Our customers tell us they want low rates and good service – they don’t have an interest in how big we get. So we try to keep that in mind as we determine our best strategies for the future.”

TWay.com does not charge listing fees, and its pricing structure is very competitive when compared to other online auction sites, due to its low operating costs and lean-and-mean approach, Burnetti said.

ABOUT TWAY.COM: TWay.com moves online buying and selling to the next level with unparalleled flexibility, options and service. It also offers marketing partnership opportunities to savvy entrepreneurs. To learn more, visit the website at http://www.TWay.com.

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