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Sotheby’s allies with eBay

Sothebys.com will be operated by the auction giant

Sotheby’s failing online auction site, Sothebys.com, is hoping to reinvent itself by forging a strategic alliance with the auction giant eBay Inc. Launched with a great fanfare two years ago, Sotheby’s.com, despite sales of $100 million, has been haemorrhaging money, so far costing the company in excess of $74 million.

The alliance comes at a time when Sotheby’s needs to look attractive to a potential purchaser since its former chairman, Alfred Taubman, recently convicted for commission fixing, stated he is looking for a buyer for his controlling £250 million share in the company.

The arrangement is for three years and no financial details have been disclosed. For its part, eBay has struggled to maintain a high end collectors’ market on its site eBay Premier, which has never matched the firm’s success in general collectibles. The new Sothebys.com site will be operated by eBay and will replace eBay Premier. It will be accessible from both eBay’s home page and at Sothebys.com. and replaces all existing auctions.

Technology problems dogged the launch of Sotheby’s site, and access to eBay’s site, one of the fastest and most dependable on the internet, will be a big advantage to Sothebys.com users. “This alliance with the most successful online marketplace in the world combines eBay’s powerful technology platform and global following of 42 million registered users, with Sotheby’s unmatched auction expertise and experience,” commented Bill Ruprecht of Sothebys .com.

Sothebys.com has 10,000- 15,000 objects on its site at a given time, ranging in price from a few dollars to tens of thousands; the average price is approximately £1,200 and there are some 5,000 registered associate dealers worldwide, although many are not active. The new site is expected to open early this summer and will feature the same categories of fine and decorative art, antiques, rare books, jewellery and collectibles. eBay’s live auction technology will also allow clients to bid live at a number of traditional sales held in London and New York further details of this have still to be announced

In addition to property consigned by Sotheby’s and its associate dealers, eBay Premier dealers and Butterfields Auctioneers, a subsidary of eBay, will also consign objects.

Sotheby’s originally launched its site in January 2000 in an online venture with Amazon.com, whereby Sothebys.Amazon.com would handle the collectible side of the business and Sothebys.com the more upmarket sales. However, that partnership was wound up in October 2000 when it became evident that both sites were too similar in content.

The question is, will eBay’s 42 million users be interested in the Sothebys.com trade? For the site to work Sotheby’s needs to break into a broader market. Traditional buyers of art and antiques have proved resistant to buying online, especially at the upper end apart from prints, stamps, coins books and collectibles where the objects are a known quantity. “If we reach even a small percentage of eBay’s 42 million users it would be very beneficial to our sales,” said Sotheby’s spokesman Patty Fox. “Just as in a live sale, even one additional bidder can dramatically change the outcome of an auction. Ebay’s community is comfortable transacting online and has a proven enthusiasm for online auctions”. We wait and see.