Sergey Skaterschikov combs through Artnet’s annual report and comes to a few stark conclusions. His first is that the company’s $700,000 loss is roughly equal to CEO Hans Neudorf’s compensation package. More important, Skaterschikov doubts Artnet’s strategy to become a significant player in the online auction business. Here’s Skate’s bullet points on annual report:

The firm’s revenues are down 5.6% compared to 2008 (in dollar terms) to approximately $17mln. To put matters in perspective, this figure is approximately three times the annual catalogue sales at Sotheby’s;

artnet has lost money at a stable rate for two years now, with net losses approximately $0.7mln for the second year in a row. Its cash position fell from $4.1mln to $3.1mln in 2009, and the firm remained unleveraged;

The company’s cash flow from operations went from a positive $0.66mln in 2008 to a negative $0.26mln in 2009;

The firm’s capital expenditures fell to $0.65mln in 2009, about one third the level of 2008;

The auction segment continued to weigh down on the company and was responsible for its losses. The auction segment losses widened from EUR1.3mln in 2008 to EUR1.8mln in 2009 and exceeded the roughly EUR1.3mln in profits made by the firm’s other business segments. The auction segment was solely responsible for artnet’s overall loss in 2009.

artnet’s 2009 Results and Strategic Proposition: Bear with Us, Losses from Online Auctions Will Eventually Bring Profits (by 2011 at the Earliest…) (Skate’s Market Notes)