CNBC reporter Robert Frank reports on the coming together of e-commerce giant eBay Inc (NASDAQ:EBAY) and one of the world’s largest and oldest auction houses Sothebys (NYSE:BID), to have online auctions which is seen to be one of the fastest growing segments of the art industry.
“I am calling it Sotheby’s 2.0, because it’s actually the second time that Sotheby’s has teamed up with eBay to make a big push into digital. Now, starting this fall, eBay will live stream many of the New York sales Sotheby’s for the lower value items like wine, jewelry, watches & photographs. Now both companies will fill a really important gap here. Sotheby’s gets much better online auction technology and a chance to broaden its base to some of eBay’s 36 million buyers. Now what eBay gets out of this, is of course, the cache of the Sotheby’s name as it tries to sell more high-end goods,” Frank
Adding further on the partnership between eBay Inc (NASDAQ:EBAY) and Sothebys (NYSE:BID), Frank said that the companies had come together in the past in 2000, but the partnership failed in 3 years due to lack of sales, but this time the companies are more confident as the situation i.e. market for online auctions is different according to them.
Frank said that Sothebys (NYSE:BID) online sales had showed a 36% growth last year and the company sold an Ottoman piece for 3.5 million this spring. Meanwhile, Christie’s, which is the undisputed leader in the online space, has sold a $9.6 million Edward Hopper painting online in December, 2013.
Frank also added that Sotheby’s cannot be expected to sell their multimillion-dollar pieces on eBay and instead they will stream lower value auctions online, as half of Sotheby’s sales last year went for less than $100,000 and at the same time those are also the most profitable ones.
Activist investor Daniel S. Loeb, who is on the board of Sotheby’s, is said to be behind pushing the online strategy for the company to catch up with that of Christie’s. Meanwhile, eBay Inc (NASDAQ:EBAY) is said to be getting a percentage of the sales through auctions.