Michael May/Housely Carr, Carversville, Pa.

By Kelly S. Mittleman

It seems the end may just be the beginning for sothebys.amazon.com.

The idea behind the two sites was to feature higher-end material on sothebys.com, while lower-priced collectibles would be found at sothebys.amazon.com. According to dealers, having dual addresses to tap into was too confusing for customers. The new relationship will take the lower-priced collectibles and other inventory that used to appear on the joint site to sothebys.com. Amazon.com will continue to market for the auction house through a banner on its website.

Under the old business arrangement, sothebys.amazon.com shared the costs and the revenue on a percentage basis that Amazon.com would not reveal.

Amazon.com initially invested $45 million into the development and hosting of the Web site while Sotheby’s concentrated on finding inventory sources and dealers. Both businesses shared marketing costs.

The new business arrangement allows for sothebys.com to receive fixed and permanent placement on the amazon.com site; in exchange, according to amazon.com executives, “amazon.com will receive multimillion, multi-year fixed cash payments in return.” Amazon.com would make additional revenue based on sothebys.com performance.

Victoria Treyger, general manager at sothebys.amazon.com, says, “We started to hear that the distinction did not make sense because buyers were purchasing similar inventory on both sites.”

Executives at both companies have attributed the shift to the changes in the online art market, saying that at the time of sothebys.amazon.com’s launch it was not known how the competitive Internet art and auction market would evolve.

Will sothebys.com see some profits in the near future? The site’s president, Craig Moffett, says the company’s loss has gotten smaller with each quarter and they expect to see profitability in 2002.