Sotheby's Seeks Online Auction Aid From EBay

Internet auction site EBay has agreed to collaborate with the venerable yet troubled U.K. auction house Sotheby's Holdings in an attempt to put more expensive art offerings on EBay while driving more customers to Sotheby's Web site, the companies announced on Thursday.

In a case of a new-economy company coming to the aid of an ailing old-school player--Sotheby's is the world's oldest auctioneer, in business for 226 years--EBay will introduce Sothebys.com online auctions over its Internet marketplace sometime between June and August, the companies say in a joint statement.

Sotheby's will integrate EBay's live auction technology on a site that will be built and hosted by EBay. Sothebys.com will exist within EBay as opposed to operating as a separate entity, though it will be marketed by both companies as Sothebys.com, the companies say.

Financial terms of the deal were not disclosed.

Sign of the Times

Despite difficult economic times for most Internet-based companies, especially in the post dot-com boom, EBay has continually posted profits and reported robust online user numbers.

Earlier this month, EBay reported strong fourth-quarter results and forecast that it would hit its target earnings for the first two quarters of 2002. The company says it had consolidated net revenue of $219.4 million for the quarter ended December 31, a 64 percent increase over the $134 million the company racked up in the year-earlier quarter.

Conversely, Sotheby's reported a loss of $8.3 million in the first half of 2001. Even more devastating for the company and its reputation was the conviction in New York last month of its former chair Alfred Taubman on charges of conspiring to fix commission fees on the sale of artworks with rival auction house Christie's.

Different Approaches

Sotheby's Web site has been unable to turn itself into a moneymaker for its parent company since being launched two years ago. However, it has held some high-profile online actions of fine art and historical artifacts, including the sale of a rare copy of the U.S. Declaration of Independence for $8.1 million in June 2000, and a rediscovered 19th-century portrait by Frederic Lord Leighton for $550,750, the companies say.

EBay is better known for its online auctions of Beanie Baby stuffed toys and, more recently, office paraphernalia from failed commodities exchange Enron. Founded in September 1995, EBay boasts 42.4 million registered users, according to its Web site.

In an earlier effort to crack the fine arts market, EBay bought San Francisco-based Butterfields Auctioneers in 1999. As part of the deal with Sotheby's, selected so-called "Butterfields auctioneers" and "EBay premier dealers" will become sellers of arts, antiques, and collectibles on the new Sothebys.com site, the companies say.