Vaunted auction house Sotheby's Holdings Inc. is discontinuing online auctions from its namesake site, which failed to turn a profit, but will continue accepting online bids for items through eBay Inc.
Although the company said Tuesday that it will cease providing online auctions from the Sothebys.com site in May, the site will remain up to promote its live events.
Sothebys.com was created last year as part of an alliance between the offline auction house and eBay, whose technology powered the site.
After May, art and antique collectors hoping to bid on Sotheby's items online will have to go through eBay's Live Auction Technology, which allows users to follow the offline auctions and bid online, in real time.
Additionally, New York-based Sotheby's said it will continue to contribute items to eBay's arts, antiques and collectibles categories. According to eBay, these categories generated more than US$1 billion in sales last year.
Due to the discontinuation of its own online auctions, Sotheby's said that it would take a one-time restructuring charge in the first-quarter of this year of between US$2 million and US$3 million. However, the company said that it still believes in the Internet's strength as an auction marketplace.
This is no doubt also the view of San Jose, California, eBay which has built a thriving auction business on the Web.