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Salesforce Industries Summit

eBay Makes $260 Million Deal to Buy High-End Auction House

By Andy Wang
Apr 26, 1999 12:00 AM PT

Online auction leader eBay (Nasdaq: EBAY) made a major move into the high-end auction market today when it announced an agreement to purchase upscale brick-and-mortar auction house Butterfield & Butterfield. The $260 million (US$) deal is expected to close in the second quarter.

eBay Makes $260 Million Deal to Buy High-End Auction House

The acquisition seems somewhat surprising, because eBay and Butterfield & Butterfield had announced a partnership to add a new premium category on eBay just 10 days ago. Now, eBay will benefit from all of Butterfield & Butterfield's resources and branch out into more expensive auctions while continuing to focus on its successful person-to-person auction services.

eBay Users Get Appraisal Services

In addition to giving eBay users access to fine art and collectibles, the deal means that eBay customers will have access to expertise offered by Butterfield & Butterfield's team of more than 50 specialists. Services provided by these specialists will include authentication and appraisal, which is a big issue when it comes to purchasing any big-ticket item online.

"We believe this will enable a whole new generation of users to safely trade unique, high-end items on eBay," said John Gallo, president of Butterfield & Butterfield.

eBay has also recently shored up its security in other significant ways. Earlier this month, eBay made a deal with Collectors Universe to give customers authentication and grading options for products including trading cards and rare coins. eBay also reached agreement with New York City's consumer protection agency on a set of anti-fraud measures.

About Butterfield & Butterfield

The deal with eBay means that Butterfield & Butterfield has decided to withdraw its proposed initial public offering. Butterfield & Butterfield was founded in San Francisco in 1865. The company has galleries in San Francisco, Los Angeles, and Chicago, and representatives throughout the United States and cities in Europe, including Paris, London, Munich and Brussels. And because it is primarily a brick-and-mortar business, the company is profitable.

Stock Impact

Shares of eBay closed at an all-time high on Friday and were up 11-7/8 to 212 in early trading today. eBay stock is getting a boost as Wall Street anticipates its latest earning report, which will be released after the market closes today.


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