The worlds of fine art and Internet commerce came closer this week when international auction house Sotheby's and e-commerce leader Amazon.com announced a sweeping joint venture plan and investment worth $45 million (€43.51 million).
As part of their alliance, which is exclusive on both sides for 10 years, Amazon will control a 1.7 per cent stake in Sotheby's for $35 million. It will invest a further $10 million for an option to buy an additional one million shares in the next three years.
The deal sent shares in both companies soaring. Sotheby's gained 10 per cent while Amazon snapped back from recent weakness.
"It's an excellent move for both companies," said Ms Jennifer Casalveri, an analyst at Duff & Phelps Credit Rating in New York. "They're hitting all segments of the auction market."
Under the terms, the two companies will launch a new website, sothebys.amazon.com in September. The site will primarily feature collectibles, including coins, stamps, toys and dolls, as well as sports and Hollywood memorabilia.
But it will also offer general art, antiques, books and jewellery. All items for sale on the site will come from Sotheby's directly or from its worldwide network of 2,800 dealers, who will post estimated sale prices and guarantee that the articles are genuine.
The alliance comes less than two months after online auction leader eBay paid $260 million to buy San Francisco auction house Butterfield & Butterfield, a move intended to expand eBay's reach ahead of the September launch of online auction sites by Sotheby's and Christie's.
Both Sotheby's and Amazon will also operate their own independent auction sites. In September Sotheby's is expected to launch sothebys.com, aimed at more traditional fine and decorative arts, jewellery and books.
Ms Diana Brooks, chief executive of Sotheby's, emphasised that the distinction between this site and the joint site with Amazon would be more in character than price, adding: "It always surprises people that 80 per cent of what we sell is below $5,000."
Ms Brooks said that Sotheby's remained committed to live auctions, though it was looking at ways to broadcast these over the Web to allow real-time worldwide bidding.
Amazon is a recent entrant to the auction market, having added an online auction operation to its popular book and music website in March this year.
