E-Photo
Issue #1  4/25/1999
 
eBay Signs Letter Of Intent To Purchase Butterfield & Butterfield

I quote from their announcement: "Today we are pleased to announce that eBay has agreed to buy one of the great auction houses of the world, Butterfield & Butterfield. 

The San Francisco company specializes in the appraisal and sale of fine art, antiques and objects in many collecting categories, including paintings, furniture and jewelry. This new relationship means we will soon have new services to offer you. eBay users will be able to access higher end items because of Butterfield's extensive collections from around the world. And Butterfield's team of specialists will offer authentication, appraisal and marketing services to eBay members in a number of categories. When you combine these new items and services from Butterfield with the millions of items currently available, eBay users will be able to participate in the most exciting auctions to be found anywhere."

Now the analysis: EBay wanted to get a piece of the high end market and use LA-based B&B to help boost their new regional LA (and soon to come San Fran and Chicago) auction pages. But the reality is that the two organizations' cultures will clash big time. EBay is the brash fast-moving e-commerce company and B&B is a slow moving also ran among the auction houses. Ebay has little direct involvement in its various markets, preferring to offer a hands-off marketing channel, except when it comes to censorship of items. This is a VERY different role than the more traditional auction houses, in fact the exact opposite. It will interesting to see if EBay tries to put its heavy handed censorship policies in place at B&B. Recently they knocked off two Jock Sturges (one was mine) off of the EBay site, while B&B, and virtually all the major houses as well, have handled the same material in virtually every auction. And other material regularly at auction will be even more challenging for the EBay "standards".

It is doubtful that on-line auctions will completely replace the physical plants/services of the auction houses for some time to come in the "high end" of the market (see the next story below for some of the reasons).

With the Sotheby e-commerce site announced for a full July launch and flush with money from its IPO, ebay was obviously feeling the pressure to do something in this part of the market. But I'm not sure this is going to be as beneficial to them as it might be to the survival of B&B, who was obviously feeling the pinch of e-commerce and a more strategically ready competition.

B&B has always had the weakest photography auctions of any of the "major" houses, although it has done well in Western paintings, coins, wine and a few other areas. High-end material comes to market via contacts that are trusted to understand the material. That's where B&B and ebay will find that they are coming up short against the big two houses of Christies and Sotheby's.

While this will be true of all areas, I will address photography specifically. When it comes to photography, Sotheby's Denise Bethel is the only acknowledged guru of 19th century photography and that's why the recent Southworth & Hawes collection went to that house. Christies' Rick Wester, on the other hand, is the industry's top modernist expert, and gets most of that material. Swann has been noted for its quirky and Eastern European material (and, while Denise was there, it's 19th century material, which has been noticeably lagging the other material as of late). Daile Kaplan, it's photography head, has also done well with a couple of important pieces, notably the Cunningham's in the last two auctions, and the noteworthy cat and bird dag. She has attempted to move the house into the seven figures part of the market, successfully the prior two auctions, although I doubt she came close to that mark with this auction.

All three houses understand and have better access to their "high end" markets than do the EBay/B&B team. Rumors also persist that Christies' is once again on the block by its new owners, although it's e-commerce site should be ready to compete with the new Sotheby site (July launch, with "exclusive" dealers) shortly (a Fall launch is rumored). All this activity will certainly be fun to watch over the next year as it starts to shake out. Keep checking EBay's announcement pages for details.