Early last month Sotheby's announced that it would halt its Internet auctions that it runs through eBay as of early May, stating that they were too unprofitable. By some estimates, Sotheby's poorly run website operations cost the firm over $100 million in total losses, and not even a last-ditch alliance with web powerhouse eBay could help.
This move means an end to the bulk of Sotheby's relationship with eBay. The auction house plans to focus on promoting eBay's technology that allows online bidding on live auctions. This technology has never really had much effect on either company's business.
According to Bill Ruprecht, President and Chief Executive Officer of Sotheby's Holdings, "This action will regrettably lead to redundancies and a one-time restructuring charge in the first quarter of 2003 in the range of $2-3 million, but we anticipate that taking this step will enhance our profitability in 2003." Let's see: "redundancies." I believe that is English for "firing". And "restructuring charge" is something like additional "LOSSES". And "enhance our profitability" means something like "we won't lose quite as much as we figured," especially since Sotheby's is projected to report another loss for 2002 later this month.
Ultimately Sotheby's will do better without their poorly run Internet operation. It is a shame though, because the service could have been a moneymaker for Sotheby's had it been executed properly.