Auction house Sotheby's Holdings Inc. and Amazon.com Inc. Wednesday said they are shutting their 16-month-old co-branded site, Sothebys.Amazon.com, which sells art, collectibles and antiques.
The companies will, instead, combine to create a single auction Web site, according to a joint statement. Consumers logging on to Amazon.Sothebys.com will be redirected to Sotheby's Web site, Sothebys.com.
"In operating a marketplace it is all about scale," said Craig Moffett, president of Sotheby's. By combining our two sites, we can offer our customers a much deeper selection in one venue."
In the statement, Sothebys.Amazon.com's general manager, Victoria Treyger, said the unified site will offer Amazon.com's customers a better customer experience by combining the largest selection of authentic art, antiques and collectibles.
The joining of the two sites is expected to take place within the next 30 days. Bidders will be able to access Sothebys.com either directly or from Amazon.com. Under the terms of the agreement, Amazon will receive annual cash payments for driving traffic to the Sotheby's site. Amazon will also be paid an undisclosed sum for promoting Sotheby's to its customers.
The announcement comes at a time when investors are clamoring for Amazon.com to reach profitability.
It also comes less than a week after Sotheby's and its former chief executive, Diana Brooks, pleaded guilty in federal court to fixing commission prices and fees with rival Christie's International PLC and admitting they had done so for years. The guilty pleas came after an extensive U.S. Justice Department investigation into antitrust violations.
Analysts, however, disagree about the role that Sotheby's legal problems may have played in the decision to shut down the jointly owned site.
"I think the two are totally unrelated," said James Meyer, an analyst at Janney Montgomery Scott LLC in Philadelphia. "I don't think there was enough differentiation to warrant having two sites."
While Mark Gambale, an analyst at Gomez Advisors Inc. in Lincoln, Mass., agreed that the co-branded site did little to provide consumers with a reason to go to Sothebys.Amazon.com, he also said that as far as Amazon was concerned, Sotheby's legal troubles were "the final nail in the coffin" for the relationship.
Amazon officials could not be reached for comment before deadline.