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Industry Standard

Beanies meet Picasso as online auction goes upscale

April 16, 1999
Web posted at: 3:26 p.m. EDT (1926 GMT)

by Bernhard Warner

(IDG) -- If anyone wondered what direction the online auctioneers were headed,'s acquisition Monday of online bidding specialists and eBay's pact last month with venerable auction house Butterfield & Butterfield may come as a subtle premonition. As subtle, that is, as auctioning off a rare Van Gogh collection at the county fairgrounds.

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The online collision of the exclusive, white-glove auction-house society and the flea-market bargain hunter is imminent.

Amazon's calculated purchase of 3-year-old, the recognized leader in processing live bids via the Internet, gives Amazon the infrastructure to host live auctions of items such as art and antiques that range in the thousands of dollars. Online auctions using are the closest representation to the traditional auction format because bidders are screened based on their financial qualifications. If, for example, a bid on a particular item reaches $100,000, bidders with less money are barred from participating. has taken the auction world by storm, first by teaming with Butterfield & Butterfield in February to accept online bids for the O.J. Simpson estate, then working with others to auction off the original Batmobile and the last intact Titanic ticket (for the cruise ship, not the blockbuster film) to Internet buyers. cofounders Sky Kruse and Matt Williams said they had been shopping for a business partner for months. They wanted a partner that had a large base of consumers and understood e-commerce. Enter Amazon, which paid a reported $50 million for its Seattle neighbor.

In the auction world, the move has shocked no one.

"I think the fact that more people are doing live bidding [via the Internet] in some ways validates" the auction business, says George Noceti, senior VP of Internet auction strategies at San Francisco-based Butterfield, a 135-year-old auction house known worldwide for its vintage arms and armor auctions. Butterfield notes in a filing with the SEC that in March it entered "into a nonbinding letter of intent with eBay to create a new cobranded category of premium items to be offered on the eBay Web site."

Citing quiet period rules, Noceti declined to be any more specific about the eBay deal. Butterfield filed for an $18 million IPO earlier this year. But Noceti asserts that the auction house is extremely bullish on the prospect of incorporating live Internet bidding.

And it will be put to the test again April 29 when Butterfields and other reputable galleries and auction houses in New York, Paris, Zurich, San Francisco and Vienna conduct a simultaneous auction that includes online participants. "Art on Paper," as the auction is being called, will include more than $1.5 million worth of art to be offered by the likes of Galerie Koller in Zurich, Etude Tajan in Paris and Swann Galleries in New York. In keeping with the authenticity of the auction process, prospective bidders for the April 29 event must preregister online, providing their bank account information in order for to determine who is eligible to bid on a piece of art with a price tag of, say, $200,000.

But just because fine art galleries have shown a willingness to reach out to the cyber-bidder doesn't mean they'll want to rub elbows with vendors trafficking in Beanie Babies or baseball cards.

That's where the influence of Butterfield and comes in. Their affiliations with galleries and experience in the sale of authenticated pieces of art make them crucial to the upscale plans of eBay and Both firms are being counted on to inject a little credibility into the online auction business.

"The [online auction] market as I see it today the flea market perspective will change," says cofounder Sky Kruse. "It will become a community of not just lower priced items, but a combination of dealers who want to sell higher-end items."

Noceti agrees: "I feel that the price points [for online auction items] will start to increase as we see more consumer confidence."

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January 13, 1999

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