News and Events May 22, 2003 admin
Industry News – Sotheby’s Logs Out of Ebay Deal
Apparently, when it comes to online auctions of fine art, jewelry and watches, there are more browsers than buyers.
Having learned that the hard way, Sotheby’s Holdings is pulling the plug on Sothebys.com, its unprofitable joint online-auction venture with Ebay.
Citing continued losses in its online division, the New York auctioneer said it would halt sales of fine art on Ebay in early May.
The end of the online venture comes just a year into a three-year partnership. “There are simply not as many people prepared to buy authenticated fine art online as we had hoped,” said Sotheby’s Chief Executive William Ruprecht. Since 1999, Sotheby’s has had losses of about $100 million on online auctions, a spokeswoman said — as much as the company had to pay in 2000 to settle the antitrust lawsuits related to the company’s guilty plea to the charge of price-fixing.
In the 1990s, more than a dozen Web sites devoted to high-end art sales debuted and then quickly collapsed as buyers proved reluctant to bid more than a few thousand dollars for art without having the opportunity to inspect it first.
Sothebys.com was one of the last ventures left standing. Ebay and Sotheby’s joined forces last June with a three-year agreement (earlier, Sotheby’s had dissolved a joint venture with Amazon), but during the past year the number of items Sotheby’s has offered for sale on eBay has dwindled from about 13,000 to about 5,200.
For Ebay, the move is the latest sign of the problems that have dogged its own efforts to enter the high-end art market. The firm acquired the Butterfields auction house in 1999 for $260 million in stock to jumpstart the effort. But Ebay sold Butterfields last year for a tiny fraction of that price to London-based Bonhams Auctioneers.
Ebay executives, who had high hopes Sotheby’s would give them more credibility in the premium collectors market, said they were disappointed the company wanted to end the relationship.
Ebay will continue operating its own art and antique categories, which generated more than $1 billion in merchant sales last year for Ebay sellers.