artnet.com reports significant revenue growth

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About Us | Press Releases | November 17, 2000

Announcement in accordance with paragraph 15 of German Securities Law (WpHG)

artnet reports significant revenue growth

Nine month revenue increases by 87% over year-ago period
Infrastructure build-out nearly completed, expenditure to decline in fourth quarter
Close cost management lowers loss compared to second quarter

Frankfurt, November 17, 2000 - artnet of Frankfurt and New York reached $3.34 million in revenue for the first nine months of 2000, an increase of 87% over the year-ago period. Revenue for the third quarter totaled $1.213 million, an increase of 82% over the year-ago period and 9% over second quarter 2000.

The online gallery network made the strongest contribution to revenue with $2.274 million in the nine months, compared to $1.296 million in the 1999 period. (Third quarter 2000 $0.775 million; third quarter 1999 $0.433 million). Revenue rose from a greater number of customers and a higher yield per customer.

Total operating expenses were $14.961 million in the first nine months, compared to $9.825 million in the 1999 period. Operating expenses for the third quarter were $5.061 million, up 40% from the 1999 quarter and 7% from the second quarter. In 1999 investment in infrastructure, technology and marketing did not commence until the third quarter, hence nine-month expenditure was lower than 2000 levels. In the 2000 second and third quarters the rate of expense growth slowed reflecting the completion of projects and maturation of the infrastructure. In the fourth quarter expenditure is expected to decline.

As a result, artnet will report a decline in net loss for the first time. Net loss for the first nine months of 2000 was $12.788 million, compared to $7.498 million in the 1999 period. Net loss for the third quarter was $4.338 million, a decrease of $0.073 million over the second quarter ($4.411 million).

The company ended the period with $4.179 million in cash resources. Total cash used in operating activities in the first nine months totaled $9.774 million, compared to $4.870 million in the 1999 period (3rd quarter 2000: $3.20 million). Due to the successful investments and strong continuing revenue growth the company has sufficient liquidity to fund operations into 2001.

artnet continues to pursue a strategy of expansion in all product areas in 2000, combined with a strong management focus on results. In the fourth quarter artnet acquired Arttrade.de to expand its marketing efforts to European art fairs, and further business alliances are expected.

The full text of the nine-month is available on artnet's web site at http://www.artnet.

For further information:

Hans Neuendorf
Chief Executive Officer

Tel: 001-212-497-9700 x638
Fax: 001-212-497-9707

Dr. Bernhard Blohm
equinet Communications

Tel: 49 (0) 69-58997-300
Fax: 49 (0) 69-58997-349
--ENDS--

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