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Author: Kheldar Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 102  
Subject: former intern's comment Date: 8/17/1999 10:11 PM
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Hi fellow fools,

I just spent two months at Sotheby's as an intern prior to going back to grad. school and I like to give my two cents on the company.

Please bear in mind that I signed a confidentiality agreement and I really want my Master's instead of going to jail. Anyway, you all probably know it all already.

I was there maybe a week when the partnership with Amazon.com was finalized. It caught everyone by surprise at Sotheby's. Now bearing in mind that with or without Amazon.com, Sotheby's was heading to the online auction business anyway. You should see the Internet dept. there. All those iMacs glittering on an entire floor.

The way I understood it was that Amazon.com really didn't have enough dealers who signed up with them. Hence, they didn't really have enough items to auction off. When I say didn't have enough, I am of course comparing it to eBay. So Amazon.com was somewhat desperate and it was wise of them to partner with Sotheby's.

Sotheby's on the other hand wasn't having a great time with this internet venture. Yes, it is exciting, but just think of all the headaches involved. And I can tell you that it is an administrative nightmare. After pouring millions into the internet already, Amazon.com presented a relatively safe short cut (after all, the infrastructure is set already and the name is highly recognizable).

I feel it is good business for Sotheby's and Amazon.com, but please remember that this particular auction site and its methods are different from eBay's.
Not everyone can post their items for auction. You have to go through Sotheby's or through one of their affiliated dealers. As of my last day, the exact terms for commission rates or even the terms of contract haven't been finalized (noticed the chaos yet??).

In essence, even though Sotheby's and Amazon.com seek to establish a market for lower end items that may not make it to a live auction, they aren't exactly auctioning off common things like Beanie Babies (like on eBay). It will be very interesting how they walk this tight rope, between attracting buyers who are willing to pay let's say 300 to 700 dollars per item and alienating those who spend a lot of time on eBay looking for that 20 dollar CD.

Finally, may I point out that Sotheby's main building in Manhattan is almost done with expanding. By the time the construction is finished, pretty much it will be the undisputed auction house in the world (if it wasn't already). It will have so much more gallery space than the other auction houses combined. This is excellent business. I have no doubt Sotheby's stocks are sound investment, but I doubt that the market is kind of small. There are only a handful of auction houses around and without much fierce competition, Sotheby's may have reached its peak. I based the observation on the fact that in the computer industry, any upstart can "wow" people with their products and be competitive. The auction business is simply different.

Well, this is just a little observation I made. Please feel free to post any questions, comments, directly to me or on the board.

I am pretty much a new fool, just invested in GE's DRIP and was curious as to what people are saying about Sotheby's... then I decided to write this.

Bye.

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