eBay, Sotheby's in joint bid to boost art
The online auction site and the world's oldest fine arts auctioneer say they will team to bring more expensive art to eBay and more people to Sotheby's.
Under the deal, the two companies will unveil a new Sothebys.com site within eBay this summer, featuring the same high-end art, antiques, jewelry and rare books that Sotheby's now sells in auction houses around the world.
Sotheby's spokeswoman Patty Fox declined to discuss the financial arrangements in connection with the three-year deal. She also declined to say whether either company had taken an ownership stake in the other company. Financial terms of the deal were also not disclosed in eBay's news release Thursday.
An eBay representative could not immediately be reached for comment.
Sotheby's has operated its own online auction site at Sothebys.com for two years, but said the new alliance with eBay will connect it with a much larger audience through eBay's 42 million registered users around the world.
The new Sothebys.com Web site will also incorporate eBay's Live Auctions technology to enable real-time online bidding for many of its offline auctions in New York and London. The change will mean that anyone, anywhere in the world, could conceivably participate in the Sotheby's auctions, as long as they have an Internet connection.
Sothebys.com Chairman David Redden said eBay's technology should also help more art dealers post items on its Web site.
"Sothebys.com is essentially a network of expert dealers around the world who post property on the site," he said. "eBay's process for uploading information from sellers is extremely important."
For eBay, which offers everything from clothing to cars to used computer equipment on its site, the alliance will give it an opportunity to expand its offerings of high-end art. The company made a big push into this area in 1999 when it acquired Butterfield & Butterfield, another big offline auction house and a competitor of Sotheby's.
While that purchase helped eBay move into the premiere art arena, it did not bring it dominance over Sothebys.com, which in the past two years has sold about $100 million of merchandise, including a first printing of the U.S. Declaration of Independence, which was sold last year for $8.1 million.
The partnership with eBay represents a course change for Sotheby's. The online auction house signed a 10-year partnership agreement with eBay rival Amazon.com in 1999. The two companies opened a co-branded site that fall, but closed it one year later and restructured their agreement. Although Amazon has continued to promote the auction house's Sothebys.com site from Amazon's auction site, Amazon has largely scaled back its online auction effort.
Sotheby's partnership with Amazon will come to a close prior to the launch of its new site with eBay, Fox said. Sotheby's and Amazon reevaluated their agreement and mutually decided to terminate it early, Fox said. Last year, Amazon wrote down $41 million in investments, including its stake in Sotheby's.
The closure of their joint site "signaled the beginning of our winding down of our relationship with Amazon.com," Fox said. "Our relationship with Amazon will indeed be complete prior to launching our new venture."
Like Sotheby's, eBay's high-end auction efforts have also undergone an evolution. Following its acquisition of Butterfield & Butterfield, later renamed Butterfields, the company launched Great Collections. But Butterfields struggled at first to fill orders placed on the site and to attract bidders. eBay tried to reenergize the site by introducing a buyer's fee to attract sellers and later by relaunching the site as eBay Premier.
Earlier this month, eBay cut its Butterfields staff. As part of the agreement with Sotheby's, eBay will replace eBay Premier with the new Sotheby's site, Fox said.
Sotheby's stressed, however, that the deal did not signal a move away from its traditional way of selling in showrooms with auction blocks and gavels, which is still far and away its main business.
"We are absolutely and totally committed to our live-auction business," Redden said. "We have sales rooms around the world filled with auctioneers and auctions. The Internet is a way for people to access information about the live auctions. It's like the telephone. You can only go so long without using it."
News.com's Troy Wolverton contributed to this report.
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