artnet AG — Interim / Quarterly Report 2011

Apr 29, 2011

Interim Group Management Report First Quarter 2011

Content

• 3 artnet AG Interim Group Management Report First Quarter 2011 For the Three Months Ended March 31, 2011
• 8 artnet AG Consolidated Statement of Financial Position As of March 31, 2011 and Dezember 31, 2010
• 9 artnet AG Consolidated Statement of Comprehensive Income For the Three Months Ended March 31, 2011 and 2010
• 10 artnet AG Consolidated Statements of Changes in Shareholders' Equity (USD) For the Three Months Ended March 31, 2011 and 2010 artnet AG Consolidated Statements of Changes in Shareholders' Equity (EUR) For the Three Months Ended March 31, 2011 and 2010
• 11 artnet AG Consolidated Statements of Cash Flows For the Three Months Ended March 31, 2011 and 2010
• 12 Notes to the Interim Consolidated Financial Statements For the Three Months Ended March 31, 2011
• 17 Authorities, Offices Investor Relations, Information on artnet Stock

artnet AG Interim Group Management Report For the Three Months Ended March 31, 2011

Business Development

Overview of the Business Development for the Three Months Ended March 31, 2010

During the three months ended March 31, 2011 the Company's revenue increased 10% in euro terms to EUR 3,492,000 (8% in USD terms to USD 4,771,000) from EUR 3,179,000 (USD 4,400,000) in 2010.

artnet Auctions effects transactions in real time with inventory sourced primarily from gallery members. Launched in 2008, it is the fastest growing segment with revenue increasing EUR 49% (USD 47%) to EUR 615,000 (USD 840,000) for the three months ended March 31, 2011 from EUR 413,000 (USD 572,000) in the same period of 2010.

In the three months through March 31, 2011 the artnet Auctions' buyers' and sellers' premium increased to 20% from 16% in the same period 2010.

Revenue growth is a combination of increased volume and improved average lot price as compared to the same period last year.

We believe artnet Auctions offers irresistible benefits to consignors and buyers alike, and that artnet will soon build significant share-of-market over our brick and mortar competitors.

artnet Galleries revenues were flat to the same period last year in EUR (down 1% in USD), despite fewer gallery memberships in 2011 as compared to the same period in 2010. The Group projects to offer a new plan to the gallery members in 2011, which is anticipated to increase revenue for this product in the coming year.

artnet Price Database Fine Art and Design and artnet Price Database Decorative Art revenue increased by EUR 39,000 (USD 32,000), or EUR 3% (USD 2%). In December 2010, the Group implemented a price increase to this product along with new product offerings. The changes to the pricing and new product offering are anticipated to increase revenue in 2011.

artnet Advertising increased in EUR 26% (USD 24%). The Group is fulfilling contracts signed in 2010 with national advertisers such as Bottega Veneta, Burberry, and Volkswagen.

Results of Operations, Financial Position, and Net Assets

Earnings

Income from operations decreased by EUR 207,000, (USD 285,000) to a EUR (81,000) loss (USD (111,000)) from a positive EUR 126,000 (USD 174,000) in the same period of 2010. The revenue for the period increased by EUR 313,000 (USD 371,000) primarily due to the increase in the artnet Auctions revenue. The increase in revenue was offset by additional costs incurred by the Group for product development, consulting, and payroll increases. The Group continues to work with Simon-Kucher & Partners to review pricing of its products and services.

Net profit decreased by EUR 148,000 (USD 204,000) to a loss of EUR (71,000) (USD (97,000)) in 2011 from EUR 77,000 (USD 107,000) in 2010. Other income (expense) in the amount of EUR 24,000 (USD 33,000) resulted primarily from currency exchange rate differences.

Diluted earnings per share were EUR (0.01), (USD (0.02)) compared to EUR 0.01, (USD 0.02) in the same period in 2010.

Currency Conversion

The interim consolidated financial statements on a euro-basis benefited from a 1.4% appreciation of the U.S. dollar compared to the euro, for the first quarter ended March 31, 2011 compared to the same period in 2010.

Currency conversion in the consolidated statement of comprehensive income is based on the average exchange rate for the periods ending March 31, 2011 and 2010, respectively. For the first quarter ended 2011, the average rate was 0.732 euros / U.S. dollar compared to 0.722 euros / U.S. dollar for the first quarter ended 2010. Currency conversion for the balance sheet is based on the exchange rate at the end of the period. As of March 31, 2011, the rate was 0.709 euros / U.S. dollar compared to 0.755 on December 31, 2010, thus representing a 6% decrease.

artnet is subject to exchange rate fluctuations because it invoices in euros, U.S. dollars, and British pound sterling, but conducts most of its business in the United States. The Group works to reduce its exposure to exchange rate differences by billing European customers in euros and British customers in British pound sterling and paying vendors in the same currency with these cash funds.

Financial Position

Group operating cash flow was EUR 319,000 (USD 425,000) as of March 31, 2011 as compared to EUR 236,000 (USD 333,000) as of March 31, 2010. Deferred revenue increased during the first quarter of 2011 leading to an increase in the operating cash flow for the Group as compared to first quarter 2010.

Group investing cash flow was EUR (17,000) (USD (23,000)) as of March 31, 2011 as compared to EUR (72,000) (USD (99,000))as of March 31, 2010. The prior year's investing cash flow was to a greater extent affected by investments in new products. In 2011, only hardware and software related to the network infrastructure were purchased.

The cash flow for financing activities was EUR (40,000) (USD (54,000)) as of March 31, 2011 and EUR (25,000) (USD (34,000)) as of March 31, 2010. The amounts represent payments towards finance leases which were entered into during 2008 and 2011.

In total, the cash balance increased from EUR 2,698,000 (USD 3,575,000) on December 31, 2010 to EUR 2,824,000 (USD 3,981,000) on March 31, 2011.

The cash investment policy for the Group is conservative and based on short term investments. This policy allows all cash to be liquid and available. Based on the average outstanding shares of 5,552,986, liquidity per share was EUR 0.51 (USD 0.72) on March 31, 2011 compared to EUR 0.49 (USD 0.64) on December 31, 2010.

Asset Position

The balance sheet total was EUR 7,004,000 (USD 9,874,000) on March 31, 2011 compared to EUR 7,111,000 (USD 9,424,000) on December 31, 2010, representing a decrease in EUR of 2% (an increase in USD of 5%).

Trade accounts receivable decreased EUR 26,000 (increased USD 59,000) to EUR 1,105,000 (USD 1,558,000).

Fixed assets decreased by EUR 149,000 (USD 84,000) to EUR 1,331,000 (USD 1,876,000). The decrease is the result of continuing depreciation and amortization from prior periods only partially offset by software purchases for the network infrastructure.

Total current liabilities increased by EUR 209,000 (USD 523,000) from EUR 2,700,000 (USD 3,578,000) to EUR 2,908,000 (USD 4,100,000). The primary increase was in deferred revenue and relates to sales contracts sold in the first quarter for which revenue will be earned in future periods.

Long term liabilities represent the long-term portion of finance leases.

artnet Group's consolidated equity was EUR 3,983,000 (USD 5,616,000) on March 31, 2011 compared to EUR 4,315 ,000 (USD 5,718,000) on December 31, 2010.

artnet Price Database Fine Art and Design is an intangible asset that has been developed by gathering auction information over the last twenty years. This valuable asset to the Group has not been attributed full earnings recognition on the balance sheet due to accounting rules. Balance sheet assets would be substantially increased if this recognition were allowed by law.

Employees

At March 31, 2011 there were 112 full time employees as compared with 102 in the first quarter of 2010. Additionally, the Group employed 12 part-time employees as of March 31, 2011 as compared to 14 in the previous year's quarter, and 13 sales and other consultants unchanged from the first quarter ended March 31, 2010.

General informationen and business activities

artnet AG is a holding company listed on the "Regulierter Markt" in the Prime Standard segment (regulated market segment) at the Frankfurt Stock Exchange. artnet AG's principal holding is its wholly-owned subsidiary, Artnet Worldwide Corporation, a New York corporation founded in 1989. artnet AG ("artnet" or "the Company") and Artnet Worldwide Corporation("Artnet Corp.," collectively, "the artnet Group" or "Group") operate under the trade name "artnet."

Artnet Corp. has two wholly-owned subsidiaries. artnet UK Ltd. provides sales and client support in the United Kingdom. artnet France sarl maintains the content for the French artnet website, www.artnet.fr, and publishes the French artnet Magazine in Paris. in addition to sales and customer service. With 1.9 million unique monthly visitors, artnet.com, artnet.de, and artnet.fr offer the world's largest market overview, enabling collectors and art professionals to better navigate the art market by providing timely information about the value of artworks, artists, their galleries, price development, exhibitions, news, and reviews.

artnet Galleries is comprised of over 2,100 of the world's most prestigious art galleries and auction houses on four continents. Members of the network are indexed by specialty and location, and represent an aggregate 176,000 works in inventory from 37,000 artists. artnet Galleries also offers design and decorative art objects from the 1st Century BC to present.

artnet Price Database Fine Art and Design is an updated archive of over 4.2 million illustrated auction records from over 500 of the world's top auction houses, bringing price transparency to a hitherto secretive market. artnet Price Database subscribers obtain up-to-the-minute, fair appraisals of works they want to buy or sell by comparing them to works sold at auction since 1985. artnet Price Database Fine Art and Design is widely subscribed by appraisers, dealers, auctioneers, financiers, and private and government institutions (including the IRS and FBI). Most importantly, it provides an illustrated "blue book" for private collectors with which to appraise the works they own, and measure opportunities at auction or in the dealer market. Dealers and auctioneers also use artnet Comps (comparable sales from artnet Price Database Fine Art and Design) to support the sale of important works of art. Of particular significance is the fact that, in an exclusive partnership with Sotheby's, artnet comparables are posted on sothebys.com for sales throughout the United States and Europe.

In the first quarter 2009, artnet launched the artnet Price Database Decorative Art, which is comprised of furniture, porcelain, silver, glass, timepieces, and other types of applied art.

A derivative of the artnet Price Database Fine Art and Design is the artnet Market Alert, which informs subscribers by email whenever an artwork by one of the selected artists'works is offered for sale in one of the artnet Galleries, at auction in one of the artnet Auction Houses, or on artnet Auctions.

In the spring of 2008, artnet launched artnet Auctions. In this signal initiative, experienced specialists are commissioned to marshal the voluminous information in the artnet Price Database to establish reserves and estimates for artworks sourced primarily from members of artnet Galleries. These works are then auctioned on the platform artnet.com/auctions.

The artnet Monographs have been compiled and published showcasing the complete works of specific artists. They are available for viewing online on the artnet website.

Subsequent Events

No reportable events of significant importance have occurred after the balance sheet date.

Risks to Future Development

artnet holds the view that the risk structure has not changed since December 31, 2010.

Outlook

The U.S. market, which drives nearly 60% of artnet revenues, is anticipated to continue to grow slowly with consumers still behaving cautiously despite a recent improvement in unemployment.

The housing market shows no clear sign of recovery, which affects the market for design and decorative objects via galleries, architects, and decorators. Overall, galleries business remains soft.

Offsetting, artnet Auctions is well positioned to reap the benefits from a strongly rebounding market. artnet Auctions offers the most significant short- and long-term growth opportunity as we continue to push for higher value lots, both from dealers and private collectors. At the same time we are reaching an expanding pool of buyers with targeted marketing initiatives. The goal for 2011 is to achieve a 30% growth in auction sales and commissions, with an eye towards improving margins.

Additionally, the Group continues to review its pricing strategy with the help of Simon Kucher & Partners, a leading firm specialized in product pricing.

Finally, the launch of artnet Market Analyst, a new product that applies differentiated statistical methods to segments of the art market, artists, and individual worksand bundles them into comparative indices, later this year is expected to further build up revenue.

We remain confident that 2011 will see a profit with improved revenue growth in each product line and that 2012 will see a continuation of this trend.

Berlin, April 29, 2011

The CEO Hans Neuendorf

artnet AG Consolidated Statement of Financial Position

As of March 31, 2011 and December 31, 2010

	03/31/2011	12/31/2010	03/31/2011	12/31/2010
	Consolidated USD	Consolidated USD	Consolidated EUR	Consolidated EUR
Current assets
Cash and cash equivalents	3,981,216	3,575,208	2,823,877	2,697,852
Accounts receivable-net	1,557,766	1,498,519	1,104,923	1,130,782
Prepaids and other current assets	654,992	601,324	464,586	453,759
Total current assets	6,193,974	5,675,051	4,393,386	4,282,393
Noncurrent assets
Property and equipment	932,182	941,838	661,197	710,711
Intangible assets	944,261	1,019,034	669,764	768,963
Security deposit	314,820	298,468	223,302	225,224
Deferred tax asset	1,489,129	1,489,129	1,056,239	1,123,697
Total noncurrent assets	3,680,392	3,748,469	2,610,502	2,828,595
Total assets	9,874,366	9,423,520	7,003,888	7,110,988
Liabilities and shareholders' equity
Current liabilities
Accounts payable	401,766	425,236	284,973	320,883
Accrued expenses and other liabilities	1,390,592	1,301,710	986,347	982,270
Current income tax liabilities	14,801	0	10,498	0
Finance lease obligation	222,288	201,197	157,669	151,823
Deferred revenue	2,070,883	1,649,360	1,468,878	1,244,607
Total current liabilities	4,100,330	3,577,503	2,908,365	2,699,583
Long term liabilities
Long term portion of finance lease	158,501	128,384	112,425	96,879
Total liabilities	4,258,831	3,705,887	3,020,790	2,796,462
Shareholders' equity
Common stock	5,941,512	5,941,512	5,631,067	5,631,067
Treasury stock	(269,241)	(269,241)	(264,425)	(264,425 )
Additional paid-in capital	51,889,554	51,833,659	50,600,752	50,559,842
Accumulated deficit	(51,827,976)	(52,030,497)	(51,514,219)	(51,667,124)
Current net profit/(loss)	(96,642)	202,521	(70,733)	152,905
Foreign currency translation	(21,672)	39,679	(399,344)	(97,739)
Total shareholders' equity	5,615,535	5,717,633	3,983,098	4,314,526
Total liabilities and shareholders' equity	9,874,366	9,423,520	7,003,888	7,110,988

artnet AG Consolidated Statement of Comprehensive Income

For the Three Months Ended March 31, 2011 and 2010

	01/01–	01/01–	01/01–	01/01–
	31/03/2011	31/03/2010	31/03/2011	31/03/2010
	Consolidated USD	Consolidated USD	Consolidated EUR	Consolidated EUR
Revenue
artnet Galleries	1,698,137	1,720,501	1,242,866	1,242,890
artnet Price Database	1,663,601	1,631,311	1,217,589	1,178,459
artnet Auctions	839,818	572,111	614,663	413,293
artnet Advertising	544,063	437,368	398,200	315,955
artnet Magazine	24,967	38,644	18,273	27,916
Total revenue	4,770,585	4,399,935	3,491,591	3,178,513
Cost of sales	1,974,493	1,921,470	1,445,132	1,388,070
Gross profit	2,796,092	2,478,465	2,046,459	1,790,443
Other operating expenses
Selling and marketing	777,030	738,224	568,708	533,293
General and administrative	1,311,245	965,814	959,700	697,704
Product development	762,785	597,305	558,282	431,493
Non-cash compensation	55,895	3,045	40,910	2,200
Total other operating expenses	2,906,954	2,304,388	2,127,600	1,664,690
Profit/(loss) from operations	(110,863)	174,077	(81,141)	125,753
Interest expense	(5,297)	(3,346)	(3,877)	(2,417)
Interest income	9,326	10,924	6,826	7,892
Other income/(expense)	33,177	(58,373)	24,282	(42,169)
Profit/(loss) prior to tax provision	(73,657)	123,282	(53,910)	89,059
Income taxes	(22,985)	(16,252)	(16,823)	(11,741)
Net profit/(loss)	(96,642)	107,030	(70,733)	77,318
Earnings per share
Net profit/(loss) per basic share	(0.02)	0.02	(0.01)	0.01
Net profit/(loss) per diluted share	(0.02)	0.02	(0.01)	0.01
Weighted average shares
Basic shares	5,552,986	5,552,986	5,552,986	5,552,986
Diluted shares	5,579,986	5,579,986	5,579,986	5,579,986

artnet AG Consolidated Statement of Changes in Shareholder's Equity (USD)

For the Three Months Ended March 31, 2011 and 2010

	Common stock					Foreign
	Shares issued	Amount	Additional paid-in capital	Treasury stock	Acumulated deficit	currency translation	Total
Balance—December 31, 2009	5,631,067	5,941,512	51,695,464	(269,241)	(52,030,497)	(84,498)	5,252,740
Total comprehensive income/(loss)					107,030	16,524	123,554
Non-cash compensation			3,045				3,045
Balance—March 31, 2010	5,631,067	5,941,512	51,698,509	(269,241)	(51,923,467)	(67,974)	5,379,339
Balance—December 31, 2010	5,631,067	5,941,512	51,833,659	(269,241)	(51,827,976)	39,679	5,717,633
Total comprehensive income/(loss)					(96,642)	(61,351)	(157,993)
Non-cash compensation			55,895				55,895
Balance—March 31, 2011	5,631,067	5,941,512	51,889,554	(269,241)	(51,924,618)	(21,672)	5,615,535

artnet AG Consolidated Statement of Changes in Shareholder's Equity (EUR)

For the Three Months Ended March 31, 2011 and 2010

	Common stock					Foreign
	Shares issued	Amount	Additional paid-in capital	Treasury stock	Acumulated deficit	currency translation	Total
Balance—December 31, 2009	5,631,067	5,631,067	50,455,505	(264,425)	(51,667,124)	(490,186)	3,664,837
Total comprehensive income/(loss)					77,318	254,108	331,426
Non-cash compensation			2,200				2,200
Balance—March 31, 2010	5,631,067	5,631,067	50,457,705	(264,425)	(51,589,806)	(236,078)	3,998,463
Balance—December 31, 2010	5,631,067	5,631,067	50,559,842	(264,425)	(51,514,219)	(97,739)	4,314,526
Total comprehensive income/(loss)					(70,733)	(301,605)	(372,338)
Non-cash compensation			40,910				40,910
Balance—March 31, 2011	5,631,067	5,631,067	50,600,752	(264,425)	(51,584,952)	(399,344)	3,983,098

artnet AG Consolidated Statement of Cash Flows

For the Three Months Ended March 31, 2011 and 2010

	01/01– 03/31/2011	01/01– 03/31/2010	01/01– 03/31/2011	01/01– 03/31/2010
	Consolidated USD	Consolidated USD	Consolidated EUR	Consolidated EUR
Cash flows from operating activities
Net profit/(loss)	(96,642)	107,030	(70,733)	77,318
Adjustments to reconcile net profit to net cash provided by/(used in) operating activities
Depreciation and amortization	212,224	270,347	155,327	195,298
Provision for doubtful accounts	29,572	25,103	21,644	18,134
Non-cash compensation	55,895	3,045	40,910	2,200
Other non-cash transactions	(118,656)	63,868	(69,066)	19,692
Changes in operating assets and liabilities
Accounts receivable	(88,819)	(43,864)	(65,007)	(31,687)
Prepaid and other current assets	(53,668)	(79,104)	(39,280)	(57,145)
Security deposits	(16,352)	2,458	(11,968)	1,776
Accounts payable	(23,470)	(30,830)	(17,178)	(22,272)
Accrued expenses and tax liabilities	103,683	(147,483)	75,551	(88,400)
Deferred revenue	421,523	162,256	298,986	120,604
Total adjustments	521,932	225,796	389,919	158,200
Net cash provided by/(used in) operating activities	425,290	332,826	319,185	235,518
Cash flows from investing activities
Purchase of property and equipment	(22,591)	(10,564)	(16,534)	(7,631)
Purchase and development of intangible assets	0	(88,445)	0	(63,893)
Net cash used in investing activities	(22,591)	(99,009)	(16,534)	(71,524)
Cash flows from financing activities
Repayment of financial lease	(53,996)	(34,353)	(39,520)	(24,817)
Net cash used in financing activities	(53,996)	(34,353)	(39,520)	(24,817)
Effects of exchange rate changes on cash	57,305	(47,344)	(137,106)	117,088
Net increase/(decrease) in cash and cash equivalents	406,008	152,120	126,025	256,265
Cash–beginning	3,575,208	3,140,219	2,697,852	2,190,931
Cash–ending	3,981,216	3,292,339	2,823,877	2,447,196

Notes to the Interim Consolidated Financial Statements For the Three Months Ended March 31, 2011

Corporate Information

artnet AG (hereinafter referred to as "artnet AG" or "the Company") is a publicly traded corporation headquartered in Berlin, Germany. The address of its registered office is Oranienstraße 164, 10969 Berlin. artnet AG was incorporated under the laws of Germany in 1998.

artnet AG holds 100% of the shares in Artnet Worldwide Corporation ("Artnet Corp."), which is located in New York, USA, Artnet Corp. holds 100% of the shares in artnet UK Ltd. and artnet France sarl. artnet AG and Artnet Corp. together with Artnet Corp.'s wholly owned subsidiaries are referred to as "the Group" or "the artnet Group".

The Group's business is to provide art collectors, galleries, publishers, auction houses and art enthusiasts a website where individuals can research artists, view art related news and find artworks that are currently available at art galleries around the world. Additionally, the Group launched artnet Auctions in 2008 which is a web based trading platform for modern and contemporary fine art, prints and photographs by renowned artists.

The consolidated financial statements were authorized for issuance by the CEO on April 29, 2011.

Basis of Presentation

These unaudited interim financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) and its interpretations adopted by the International Accounting Standards Board (IASB) for interim financial information effective within the EU. In particular, they correspond to the "Interim Financial Reporting" guidelines of IAS 34. They also comply with the German accounting Standard (DRS) No. 16 on interim reporting as well as with §§ 37x, 37w of the Securities Trading Act. These financial statements do not include all of the information and footnotes required by IFRS for complete financial statements for year-end reporting purposes.

The following new or revised standards and interpretations became mandatory in the fiscal year 2011:

	Standards (IFRS) or interpretations (IFRIC)	Compulsory application Adoption by EU in the EU	Commission
IAS 24*	Related party disclosures	1/1/2011	7/19/2010
IAS 32*	Classification of rights issues	1/2/2010	12/23/2009
IFRS 1*	Hyperinflation	1/7/2011	—
IFRS 7*	Improved disclosures on financial instruments	1/1/2011	—
IFRS 1*/ IFRS 7	Limited exemption from comparative IFRS 7 Disclosure for first-time-adopters	1/7/2010	6/24/2010
IFRS 8*/ IAS 24	Operating segments	1/1/2011	7/19/2010
IFRIC 14	Prepayments of a minimum funding requirement	1/1/2011	7 /20/2010
IFRIC 19	Extinguishing financial liabilities with equity	1/7/2010	7/23/2010
	Various improvements to IFRS	1/1/2011	—

*Amendments

The Group does not anticipate that the application of these standards will have a significant impact on the presentation of the interim consolidated financial statements in 2011.

The same accounting and valuation methods have been applied to this interim report as to the most recent annual financial statements. There has been no application of new or revised standards applicable to the interim reports to date. A detailed description of the accounting policies is published in the notes to the annual consolidated financial statements 2010.

The Management of the Company is convinced that the consolidated interim financial statements include all adjustments of a normal and recurring nature considered necessary for a fair presentation of results for the interim period. Results of the periods ended March 31, 2011 are not necessarily indicative for future results.

The interim financial statements as of March 31, 2011 and the interim management report have not been audited in accordance with § 317 of the German Commercial Code or reviewed by an auditor.

The consolidated financial statements have been prepared on a historical cost basis. The balance sheet date is March 31, 2011.

Reporting Period

The consolidated financial statements were prepared for the reporting period January 1 through March 31, 2011. The financial year for all Group companies coincides with the calendar year.

Foreign Currency Translation and Transactions

Amounts mentioned in the interim consolidated financial statements and notes to the interim consolidated financial statements are stated in euro (EUR), unless otherwise noted. The reporting currency is euro.

The currency of the primary economic environment in which the artnet Group operates is U.S. dollar (USD), which is the functional currency of the operating subsidiary Artnet Corp. Transactions in currencies other than U.S. dollar are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets, and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Gains and losses from foreign currency transactions are recognized as other income/(expense).

On consolidation, the assets and liabilities of the Group's operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the period. The accumulated gains and losses resulting from translation are recorded as a separate component of the group equity.

Currency exchange rates significant to the artnet Group are the translation of U.S. dollar to euro and of U.S. dollar to British pound sterling (GBP). The following exchanges rates have been used for the currency translation in the periods presented:

		USD to EUR	USD to GBP
	03/31/2011	12/31/2010	03/31/2011	12/31/2010
Current rate year end	.709	.755	.624	.647
Average rate for the year	.732	. 755	.625	.648

Basis of Consolidation and Consolidated Companies

The consolidated financial statements include the legal parent company, artnet AG, its wholly owned subsidiary Artnet Corp. as well as the subsidiaries of this company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

On February 23, 1999 artnet AG entered into a transaction with Artnet Corp., which was treated as a recapitalization of Artnet Corp., with Artnet Corp. as the acquirer of artnet AG (reverse acquisition). The Company accounted for the business combination of artnet AG and Artnet Corp. as a reverse acquisition in accordance with IFRS 3. On November 1, 2007, Artnet Corp. established artnet UK Ltd., which is a wholly owned subsidiary and acts as a sales agent for Artnet Corp. in the United Kingdom. On July 3rd, 2008, Artnet Corp. established artnet France sarl, which is a wholly owned subsidiary of Artnet Corp. Artnet France sarl acts as a sales agent for Artnet Corp. in France.

All significant inter-company transactions, balances, income, and expenses are eliminated.

Share Capital

Conditional Capital-Share Based Payments

The Shareholders' Meeting on July 15, 2009 conditionally increased the capital stock by EUR 560,000 through the issue of up to 560,000 new no-par value bearer shares, which can be issued as stock options to members of the Company's Board of Directors and members of the management of affiliated entities as well as to employees of artnet AG or its affiliated entities (Conditional Capital 2009/I).

The entry of the amendments of the articles of incorporation in the Company's commercial register, as required for the effectiveness of these resolutions by the Shareholders' Meeting, took place on February 2, 2010.

Authorized Capital

The Shareholders' Meeting of artnet AG on July 15, 2009 authorized the Board of Directors, with the approval of the Supervisory Board, to increase the capital stock by up to EUR 2,800,000 before July 14, 2014 through the issue of 2,800,000 new nopar value bearer shares in exchange for cash contributions or contributions in kind (Authorized Capital 2009/I). In 2011 and 2010 no common shares were issued under the Authorized Capital 2009/I.

The entry of the amendments of the articles of incorporation in the Company's commercial register, as required for the effectiveness of these resolutions by the Shareholders' Meeting, took place on February 2, 2010.

Treasury shares

As of March 31, 2011 and 2010 artnet AG held 78,081 of its own shares, representing 1.4% of common stock.

Income Taxes

Income tax expense is recognized in the interim period based on the best estimate of the weighted average annual income tax rate expected for the full financial year. Due to its tax loss carryforward, Artnet Corp. only has to pay the alternative minimum corporation tax.

The Group reviews the carrying amount of its deferred tax asset once per year and will be reviewing the deferred tax asset in the fourth quarter of 2011 based on the most recent budget for the fiscal years 2012–2014.

Segment Reporting

The Group reports on the operating segments in the same way it reports operating segment information to the management and Supervisory Board. During the first quarter of 2011, the Group decided to report artnet Magazine as a reportable segment. Previously the French, German, and United States Magazines were considered primarily a marketing tool supporting the Group's business activities. artnet Magazine direct expenses are now presented in "Cost of Sales".

The new allocation method has been used for both 2010 and 2011 for comparative purposes.

Impact of the reclassification for 2010 is EUR 249,000 (USD 345,000).

The five Group's reportable segments are as follows:

• • The artnet Galleries segment provides services to galleries by posting the galleries' available works of art online.
• • The artnet Price Database segment includes the artnet Price Database Fine Art and Design and the artnet Price Database Decorative Art sales including the imageless search as well as sales generated from the artnet Market Alert, the artnet Market Data Reports and the artnet Monographs.
• • The artnet Auctions segment provides an online platform to buy and sell artworks.
• • The artnet Advertising segment produces banner and advertising on the website.
• • The artnet Magazine segment currently generates advertising revenue but will be developed into a full-fledged business.

Segment performance is evaluated based on profit or loss before taxes. Not directly attributable expenses are allocated to the reportable segments primarily based on the headcount and revenue for each reportable segment.

A measure of total assets or liabilities for each reportable segment is not provided to the management. Therefore, total assets or liabilities are not disclosed for each reportable segment.

	EUR
Period ended March 31, 2011	artnet Galleries	artnet Price Database	artnet Auctions	artnet Advertising	artnet Magazine	Total
Revenue	1,242,866	1,217,589	614,663	398,200	18,273	3,491,591
Profit/(Loss) prior to tax provision	50,230	194,350	(85,602)	12,036	(224,925)	(53,910)
Period ended March 31, 2010	artnet Galleries	artnet Price Database	artnet Auctions	artnet Advertising	artnet Magazine	Total
Revenue	1,242,890	1,178,459	413,293	315,955	27,916	3,178,513
Profit/(Loss) prior to tax provision	73,103	360,581	(168,331)	69,741	(246,034)	89,059

Earnings per share

Basic earnings per share are calculated by dividing net income by the weightedaverage number of common shares outstanding during the year.

Diluted earnings per share are calculated in the same manner as basic earnings per share with the exception that the average number of shares outstanding increases by adding the potential number of shares from stock option conversions.

The calculation of earnings per share is based on the following data:

	Period ended 03/31/2011	Period ended 03/31/2010
	EUR	EUR
Numerator (Earnings):
Net profit/(loss) for the three months
retained for equity shareholders	(70,733)	77,318
Denominator (Number of shares):
Weighted average number of ordinary shares used tocalculate basic earnings per share (issued
and fully paid ordinary shares)	5,552,986	5,552,986
Effect of potential shares: Stock options	27,000	0
Weighted average number of ordinary shares
used to calculate dilutive earnings per share	5,579,986	5,552,986

The weighted average exercise price (EUR 4.85) is less than the average share price in 2011 (EUR 5.28). In consequence, there are 27,000 diluted shares.

Employees

At March 31, 2011 there were 112 full time employees as compared with 102 in the first quarter of 2010. Additionally, the Group employed 12 part-time employees as of March 31, 2011 as compared to 14 in the previous year's quarter, and 13 sales and other consultants unchanged from the first quarter ended March 31, 2010.

Accounting Estimates and Assumptions

The preparation of the consolidated financial statements in accordance with IFRS necessitates estimates and assumptions that influence assets and liabilities, income and expenses as well as information in the notes to the financial statements. Actual results and developments may differ from those estimates and assumptions. Estimates made by management that have a significant effect on the interim consolidated financial statements include the recognition of deferred tax assets and of development costs, the measurement of provisions and accruals, the useful lives of non-current assets and the assessment of bad debt provisions on accounts receivables.

Notifications in Accordance with § 21 of the Securities Trading Act None.

Report on Post-Balance Sheet Events

No reportable events of significant importance have occurred after the balance sheet date.

Berlin, April 29, 2011

The CEO Hans Neuendorf

artnet AG

Supervisory Board John Hushon, Chairman Dr. Christian Dohm, Deputy Chairman Hannes von Goesseln Board of Management Hans Neuendorf, CEO

Artnet Worldwide Corporation

Hans Neuendorf, CEO B. William Fine, President

artnet France sarl

Hans Neuendorf, Gérant Gina Kehayoff, Directrice Générale

Addresses

artnet AG Oranienstrasse 164 10969 Berlin Germany info@ artnet.de Tel. + 49 (0)30 20 91 78 0 Fax + 49 (0)30 20 91 78 29

Artnet Worldwide Corp. 61 Broadway, 23rd Floor New York, NY 10006 USA info@ artnet.com Tel. + 1-212-497-9700 Fax + 1-212-497-9707

artnet France sarl 5, rue du Chevalier de Saint George 75008 Paris France info@ artnet.fr Tel. + 33 (0)1 42 86 67 10 Fax + 33 (0)1 42 86 10 16

artnet UK Ltd. Morrell House 98 Curtain Road London EC2A 3AF United Kingdom info@ artnet.co.uk Tel. + 44 (0)20 7729 0824 Fax + 44 (0)20 7033 9077

Investor Relations

You can find information for investors and the annual financial statements at www.artnet.de/ir. If you have further queries, please send an e-mail to ir@artnet.com or send your inquiry by mail to one of our offices.

Information on artnet stock

The common stock of artnet AG is traded on the Prime Standard of the Frankfurt Stock Exchange under the symbol AYD. You can find ad-hoc disclosures on relevant company developments at http://www.artnet.com/about/pressreleases. asp?A=14.

German Securities Code Number (WKN) 690950

ISIN DE0006909500

artnet AG

Oranienstrasse 164 10969 Berlin Germany ph +49 (0)30 20 9178-0 fx +49 (0)30 20 91 78-29 info @ artnet.de