NEW YORK -- A pair of gunslinging Elvises greets visitors to the lower Broadway offices of artnet.com. The Andy Warhol silkscreen is an apt symbol for the company's chief executive, Hans Neuendorf, who has survived a blood bath in the online art world and is fighting his way to profitability.
Last December, after losing $9 million on his 18-month-old online auction site, Neuendorf abandoned all attempts to sell art online. Instead, he turned artnet.com into an information site, where dealers and others can find gallery listings, auction price histories and images of art works.
"We're trying to promote the dealers and let them do their business," says Neuendorf, whose Frankfurt-based company has lost $48 million since 1989.
The company's latest earnings report, released Monday, shows net losses of $1.9 million in the second quarter, down from $2.1 million in the first quarter. The loss is partly due to severance payments and other charges from the online art auctions.
While online companies have successfully sold prints, photographs and documents, the volume wasn't enough to support ventures such as Art.com, Onview.com and eArtGroup.com, or the antiques appraisal site Eppraisals.com. Sothebys.com last year closed one of its two Web sites, which it ran in partnership with Amazon.com.
As an information tool, however, the Internet is popular with galleries eager to display their inventories to prospective clients. Most of the major U.S. galleries have signed on with artnet.com.
Artnet.com's free online Gallery Network lets connoisseurs locate and view works on offer at 1,200 member galleries, ranging from Manhattan powerhouses to Midwestern specialists. For example, Mary Cassatt fans planning to visit New York City can find 16 prints, paintings and watercolors on sale through six Manhattan dealers. For $2 to $3 per database search, they can find out what similar works have fetched at recent auctions.
While some buyers reach dealers by way of the Internet, sales are completed through the usual channels.
"We're in Des Moines, Iowa, and we're getting calls from people all over the world," says Karolyn Sherwood, director of Steven Vail Galleries, which signed up with artnet.com two years ago.
"Making the match is the big cost" of the art business, Neuendorf says, and "that is the huge advantage of the Internet." Listing a gallery on artnet.com's Web site for a year costs about $3,000, less than the cost of a single full-page ad in many glossy art magazines. This service accounts for 70 percent of the company's revenue.
Neuendorf owned contemporary art galleries in Hamburg and Frankfurt, exhibiting works by the young Andy Warhol, Cy Twombly and David Hockney.
Slender at 63 with an elegantly shaved head, he joined artnet.com full-time in 1990, a few months after it was founded by a group of European and U.S. dealers and collectors who wanted to develop a database of auction prices paid for artworks. He became CEO in 1995 and raised $25 million on Germany's Neuer Markt index to support the database's move to the World Wide Web from its previous, less accessible format. The company's stock, which peaked at 66 euros shortly after its May 1999 initial public offering (then worth about $70), now trades at about 1.6 euros (about $1.50).
The database has 3,300 subscribers - auction houses, galleries, dealers and collectors - who use it to quickly check the value of comparable pieces.
The database "has made the pricing structure for art more rational and has changed the way one can do art history," says William Goetzmann, a Yale School of Management professor who once directed the Museum of the West.
Artnet.com has several competitors for art price information, but none offer the ability to clearly see the artworks being described.
Artprice.com, which trades on France's Nouveau Marche exchange, boasts that it contains results from 3,000 auction houses, but won't include images it doesn't have permission to use. Artfact.com, based in Kingstown, R.I., says its comprehensive information and decorative arts coverage makes it popular with antiques dealers and academics.
The London-based Art Sales Index, which put its print edition online, offers a database of 2.4 million records going back to 1950. But managing director Duncan Hislop acknowledges that the site, just now adding thumbnail images that aren't zoomable, "has a long way to go to match Artnet" in providing high-quality digital images.
"You can't 'talk' a piece of art, you have to look at it," explains Michele Heinrici, registrar at the Robert Miller Gallery in midtown Manhattan, a frequent user of artnet.com. "For us, the Internet is more of an information tool than a sales tool."
Artnet.com still has problems. Neuendorf said the company had to install extra firewalls to protect its database last week after someone took down the site for four days.
To make it through to this year, Neuendorf had to cut the company's staff from 120 to 50 and throw in another $400,000 on top of his initial $10 million investment.
And a March deal to link eBay Premier's offerings with artnet.com's database has yet to be implemented.
Still, Neuendorf says the company is bringing in more each month in sales than it is spending and expects to report actual profits by next year.
In a sign of confidence, the London hedge fund manager Crispin Odey bought about $400,000 of stock at a premium this summer. This makes artnet.com among the lucky Internet companies to find financing this year, which high profile ventures, like the home delivery services kozmo.com and Webvan.com, could not.
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