Enjoy unlimited access: just £1 for 12 weeks

Subscribe now

The announcement follows eBay’s recent expansion into the UK with the launch of uk.ebay.com and will be seen as a significant step in the company’s attempts to move into higher value markets.

Meg Whitman, president and CEO of the San José-based company, said that the transaction “will combine eBay’s technology and large community of users with Butterfield’s expertise in premium markets and extensive relationships with dealers, auction houses and individuals throughout North America, Europe and Asia.”

Butterfield & Butterfield president John Gallo commented that the eBay deal “will enable a whole new generation of users to safely trade unique, high-end items on eBay”.

Founded in 1995, eBay is recognised as the world’s leading person-to-person online trading community and is seen by many Internet analysts as a test-bed for the future of e-commerce.

However, despite returning record revenues of $34m for the first quarter of 1999 – a 469 per cent increase over the $6m reported for the same period in the last fiscal year – the company continues to be criticised over the security of its online transactions.

Last week it was reported that a boy of 13 had placed spurious bids to the value of £1.75m on eBay, while another website claims to have found a loophole in eBay’s password registering mechanism.

Meanwhile a US federal agency and the New York City department of Consumer Affairs were also reported to be investigating alleged illegality in some eBay transactions.

EBay maintains, however, that the deal with Butterfields will mean improved quality control, enabling it to “enter the field of mid-tier auctions”. In addition, experts in the field were quoted last week as saying that even the bad publicity could play into eBay’s hands as it raised their profile even higher and would lead to more people logging on to their website out of curiosity.