Sotheby’s Stock Soars on News of Online Auction Venture

Renowned auction house Sotheby’s Holdings Inc. said Tuesday it is launching an Internet auction business, joining the flurry of companies rushing to capitalize on electronic commerce and triggering a 29% jump in its share price.

Shares of Sotheby’s, founded in 1744, soared $9.38 to close at $41.50 on the New York Stock Exchange.

“We expect the site to be up and running by early summer,” Sotheby’s Chief Executive and President Dede Brooks said. “Our target will be new as well as existing customers.”

One analyst said a big question is whether Sotheby’s can succeed without damaging its upscale brand name or hurting its core business.

Brooks said Sothebys.com, which will offer a platform for auctioning art, antiques, jewelry and collectibles, would complement its core business, not detract from it.

“Our hope is that as a result of a growing client base, there will be a crossover between the core auction and Internet businesses as [clients] see how much fun it is to partake in [auctions],” Brooks said in a phone interview.

Sotheby’s named Susan Solomon, former president and chief executive of Sony Worldwide Networks, as CEO of Sothebys.com.

The company said in a statement that it would make an initial investment of more than $25 million for personnel, marketing and capital costs for the Internet venture during the next 12 months, acknowledging the venture will hurt earnings. However, Brooks declined to put a figure on the impact.

Hoping to attract millions of new customers, Sotheby’s said it will auction part of the extensive baseball memorabilia of collector Barry Halper this summer on the Internet and part via a live auction at its Manhattan office.