What’s in a name? For Amazon, Inc. (Nasdaq: AMZN), the Sotheby’s Holdings, Inc. (NYSE: BID) name brought a 7 percent rise in its stock price less than one hour after Wednesday’s opening bell in New York. For Sotheby’s, Amazon delivered a 10 percent boost. Such is the business of the Internet sales world today: Alliances are everything.
Amazon agreed to invest $45 million (US$) in the famous international auction house, and the two will launch a joint auction site — sothebys.amazon.com — specializing in art, antiques and collectibles. Ironically, the move is a bid by Amazon to continue expanding its enterprise beyond online book sales, while Sotheby’s also got its start more than 250 years ago as a bookseller.
While Amazon will host the new site as part of its growing auctions page, all property will be offered by Sotheby’s and a “select network of dealers and other art world professionals,” and the authenticity and condition of each item will be guaranteed. The site will also conduct auctions in conjunction with live auctions from Sotheby’s auction house in New York.
Both Keep Their Own Operations
The start of the new Amazon/Sotheby’s site, slated for later this year, will not preempt www.sothebys.com, which has launched as an information site with plans to start online trading this fall.
The current site features auction catalogs, a schedule of upcoming auctions and information on how to place absentee bids. That site plans to sell in online auctions traditional fine and decorative art, jewelry and books. Amazon’s and Sotheby’s sites will both provide links to the new joint site.
Amazon agreed to buy one million shares of Sotheby’s Class “A” Common Stock at $35.44 per share, the June l4, l999 closing price. Based on the climb Sotheby’s started Wednesday as a result of the announcement, Amazon may be getting the shares at a bargain. At press time Wednesday morning, Sotheby’s stock was in the $38 range and Amazon’s in the $105 range, with both still climbing in heavy trading. Amazon also agreed to buy $l0 million in stock purchase warrants good for the purchase of an additional one million shares within three years at $100 per share.
About the Players
Amazon has attracted more than 10 million customers to its site, which offers books, music, videos and 20 different categories of auctions. Amazon also operates LiveBid.com, the sole provider of live-event auctions on the Internet.
Sotheby, founded in 1744 in London, now has 107 offices in 41 countries. The company sells nearly 200,000 lots a year in more than 80 collecting categories.