Wednesday, September 5, 2001
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.
The database has 3,300 subscribers ï¿½ auction houses, galleries, dealers and collectors ï¿½ 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 of them offers the ability to clearly see the artworks being described.
Artprice.com 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.
"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."