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Non-Tech : Sotheby's (BID) Auction House -- Ignore unavailable to you. Want to Upgrade?

To: Iceberg who wrote (157)	1/25/1999 8:32:00 PM
From: ct	Respond to of 236

I agree that EBAY is relevant. It is true that BID has a business other than the net but I feel that its recent uptrend can be attributable to its future on the net and EBAY will be major competition. BID will be a good company with or without the net but it will have even more business with the net. I also will be watching EBAY closely. I feel that the Clinton mess will go away but you are right that if it doesn't, the market will be hit hard. I also have a problem with all of these polls, but I don't think there will be 67 votes mainly because the Republicans do not want Gore in there. Of course, no one thought it would get by the judicial committee and it certainly would not get through the House so who knows, but I really don't think he will be ousted. I feel that the biggest problem with the market right now is that it has gone too far too fast. There has to be some correction. I am mostly on the sidelines right now. I did read an article over the weekend in Barons that the market usually has a good rally beginning at the end of the 18th trading day in January because of bonuses going in (that is Wednesday afternoon). I know the company is making my contribution on the 29th. So maybe we can get through the next week or two okay. Hopefully some of that money will go into BID.

To: Iceberg who wrote (157)	1/26/1999 9:53:00 AM
From: Geoff	Read Replies (3) \| Respond to of 236

Iceberg, I respectfully disagree with you, for several reasons: 1) BID is still not online yet, it only holds live auctions in the 3D world. Ebay is solely online, and I have never heard that they are looking to expand into the real world. This IMO gives BID a competitive advantage. 250 years of experience gives BID a strong starting point to migrate some of its offerings onto the web. Ebay had no prior business to migrate, it currently is in the business of commodity-type auctioning. 2) BID authenticates all of the goods it places for sale at an auction, Ebay does not. Ebay has not indicated that it plans to authenticate items that are auctioned on its web site. Ebay is now also under investigation from the NYC Consumer Affairs Dept for allowing some auctioners to commit fraud by claiming items are "authentic" when in fact they are fakes. I'm not going to say BID is perfect, but BID has a reputation for ensuring the authenticity and value of items it auctions off. Fraud through a Sotheby's auction is far more difficult to pull off than fraud through Ebay. This authentication process leads me to believe that the many serious collectors and dealers would prefer to stay with Sotheby's and Christie's. I am not sure whether the "exclusive" agreements will be agreed to or not, but I am sure that BID has gained a lot of trust from the serious dealers and collectors over the years. BID is a trusted name, and in the auction business, trust goes a long way when it comes to getting the best auctions. 3) BID is not taking the risk of being first. Instead, BID is able to look at its lower-tier competitors to examine how their model works, and now BID can use its resources to "build a better mouse trap". Ebay was the early adopter, but the brand recognition, if not for Ebay's stock price, would be nil. Sotheby's and Christie's have been a duopoly for as long as I can remember, and I don't think that will change overnight. 4) I look at the comparison between BID and Ebay as like the comparison between the deep discount online brokers (read Ameritrade) and the discount brokers (read Schwab). There is no way that Schwab wants to get into the pricing war, and go after the hyper-active trading market, it does not fit with their business model. However, Ameritrade DOES want to move upstream and eventually move into Schwab's niche because Ameritrade's business model is based solely on the number of accounts it can get and how many trades each account will do. E*Trade has already firmed its price and is now moving upstream, many consider it to be Schwab's most formidable opponent now. BID has no intention, IMO, of moving into Ebay's world of auctioning Palm Pilots and VCRs or vacation packages. However, it is my opinion that Ebay would love to move up the ranks to BID's world of the high margin fine arts and collectibles world. Thus, BID needed to get online to fend off its upstart competitor, just as Schwab has done. And Schwab has quite successfully migrated its business onto the web, and has achieved excellent cost reduction, while still boosting both revenue and profit despite a lower cost structure on the web. I look to BID to follow Schwab's example of leveraging its existing business to create the strongest online presence among the auction sites. That is all I've got to say for now. Ice, I agree that we need some sort of a benchmark for BID's new endeavor, however, I am not sure that Ebay is the best example to look at. I'd instead look at other companies that were in BID's position. Barnes and Noble, Schwab, Egghead, etc are some examples, but unfortunately none of them are in our industry. B&N was somewhat successful, and is now in a heated battle with Amazon. Schwab is an excellent case study of how to do it right, and Egghead moved its entire business from "brick and mortar" to online quite successfully. Unfortunately the comparisons are stretches, but I think they merit a good look. I await your response. I rather enjoy trying to figure things like this out, it allows for intelligent investment discussions. later, geoff