Sotheby’s last night raised $155 million from a London auction of just 35 lots, led by a townscape by Egon Schiele that sold for an artist record.

Collectors responded to a limited supply of Impressionist and modern artworks by raising bids. The Austrian Expressionist’s 1914 canvas “Houses With Laundry (Suburb II)” was offered by the Leopold Museum, Vienna, to pay for the settlement of one of the world’s longest-running art restitution cases. It made 24.7 million pounds ($40 million).

“The supply of Impressionist and modern works is dwindling,’’ said the London-based dealer Stephen Ongpin. “That’s pushing up competition for fresh pieces that appear. Sotheby’s made the most of a tight sale.’’

Bidders are eager to buy the best works and happy to pass on others. Sotheby's (BID) selection meant only three lots were unsuccessful. The event was slimmed down from 51 lots in the equivalent sale last year. It contrasted with Tuesday’s sale of 92 works at Christie’s International, which raised 140 million pounds with a Monet work as a high-profile failure.

The Schiele was one of three works that bore third-party price guarantees. It sold to a single telephone bid from Mark Poltimore, Sotheby’s London-based head of Russian art, against the unidentified guarantor, also bidding by phone. The painting had been estimated to sell for a minimum of 22 million pounds.

The previous auction high for Schiele was the $22.4 million paid for another townscape at Christie’s International in New York in November 2006. Oils by this short-lived artist (1890- 1918) rarely come on sale, said dealers.

Demand for art, watches, rare wines, vintage cars and other offbeat investments that set pulses racing expanded in 2010 as wealth levels of the world's super-rich rebounded from the financial crisis, a report said.

"The value of many categories of investments of passion rose and HNWIs (high net-worth individuals) made acquisitions for the aesthetic and emotional appeal and their potential to return value," Capgemini and Merrill Lynch said in the World Wealth Report 2011 published on Wednesday.

Growing wealth in emerging economies, especially in Asia -- which surpassed Europe in millionaires and wealth last year -- helped spur a revival in markets for these aptly named investments, the authors of the report said.

In times of low interest rates and volatile stock markets, alternative investments allow investors to diversify by buying assets with little correlation to global financial markets, thus offering potential shelter from market turbulence.

Luxury collectibles such as fancy cars, boats and jets accounted for almost a third of these investments in 2010. Chinese demand for expensive cars made by Mercedes-Benz and Ferrari (part of Fiat) jumped last year, the report said.

Individual tastes tend to determine whether a millionaire prefers investing in cars, watches or wine, while artworks are more likely to be acquired for their potential to gain value, the authors wrote.

Reporting from Beijing— After languishing for more than two months in prison without formal charges, China's most famous dissident artist was abruptly released on bail late Wednesday.

The official New China News Agency reported that Ai had been freed "because of his good attitude in confessing his crimes as well as a chronic disease he suffers from."

The 54-year-old artist is reported to suffer from diabetes and high blood pressure, although he was not known to be seriously ill. More likely the release was a belated response by Chinese authorities to the international reproach that followed Ai's arrest April 3 at the Beijing airport.

But it appeared that he would not be able to pursue the biting criticism of the Chinese Communist Party that had permeated his artwork and writing.

"I'm not allowed to talk. I'm on probation," he said apologetically to reporters and supporters who greeted him about midnight as he returned to his studio in northeastern Beijing.

Dressed casually in a gray T-shirt and appearing in good health, he said his future plans were to "enjoy life."

"Everybody should enjoy life. I can't say anything,'' he said before disappearing behind the gates to the studio.

Though dozens of others have been arrested over the last six months in a crackdown on activists, it was Ai — by dint of his stature in the art world — who inspired petitions and demonstrations across the world. In London, the Tate Modern gallery installed large black letters across its facade reading, "Free Ai Weiwei." In New York, a Cuban artist used a slide projector at night to cast the artist's face onto the Chinese Consulate.

Ai had not been formally charged, although the state media reported that his company, Beijing Fake Cultural Development Ltd., had evaded "huge amounts" of taxes. The New China News Agency quoted police as saying that "the decision [to release Ai] comes also in consideration of the fact that Ai has repeatedly said he is willing to pay the taxes he evaded."

Recently the director of a major American museum was gently venting about collecting contemporary art. Curators in that field, he said, are too attuned to the market, too eager to collect works by artists early in their careers, lest they be shut out later if prices rise beyond museums' means. As a result, museums are acquiring many works that will not stand the test of time.

His comments came to mind at "Breaking Ground: The Whitney's Founding Collection," on view now at the Whitney Museum of American Art.

Gertrude Vanderbilt Whitney, the museum's founder, also vacuumed up a lot of contemporary art. But instead of rushing to judgment in the face of too much demand, Whitney was buying when most collectors in the U.S. favored European art. An artist herself, she thought that living American artists were underappreciated, and bought works to support them. By 1929, she owned more than 500 objects, and when that year her offer to donate them to the Metropolitan Museum of Art was declined, she decided to start her own museum and intensified her purchases. With Juliana Force, the museum's first director, she bought an additional 200 works before the Whitney opened in 1931, and another 200 in its first years. When deeded to the Whitney in 1935, this founding collection consisted of about 1,000 works of art.

For the current exhibition, about 100 paintings and sculptures have been selected by co-curators Barbara Haskell and Sasha Nicholas—but not because they are the best. As the Whitney plans its move from Manhattan's Upper East Side to new, larger quarters downtown, curators are reviewing its 18,000-object collection with fresh eyes, organizing six chronological exhibitions and experimenting with new display approaches that might be used in the new galleries. "Breaking Ground," the first, consists mainly of works by lesser-known artists that have a contemporary resonance but haven't been shown in decades. Mixed with a few renowned works, like Edward Hopper's "Early Sunday Morning" and Charles Demuth's "My Egypt," the sampling is meant to be representative of works of the era.

And what a period it was. During these years—roughly 1902 to 1935—artists in Europe were creating several strains of modernism. Leading-edge artists here joined in after the 1913 Armory Show, where they saw works by the likes of Paul Cézanne, Marcel Duchamp and Henri Matisse. Others, however, knew little of or ignored the innovators, and in buying art Whitney not only favored these representational artists but also bought with an inclusive, all-embracing approach.

The exhibition fills six galleries, arranged loosely by theme rather than chronology. The first mimics the entrance to the museum's precursor, Whitney's Eighth Street Studio Club: Its rounded walls enclose a few sculptures, and contain niches filled with Richmond Barthé's graceful "African Dancer" on the left and Whitney's own "Chinoise," a serene self-portrait, Asian-style, on the right. They serve their purpose, which is not to dazzle with artistic brilliance but to take visitors back in time.

Paintings by Renoir, John Singer Sargent and William Merritt Chase that have long been held in private hands will be the centerpieces of a new museum in Santa Barbara.

Basic instructions for the museum were revealed Wednesday in the last will and testament of art collector Huguette Clark, who died at age 104 last month in New York. The daughter of U.S. Senator William A. Clark, she had a 42-room apartment on Fifth Avenue full of art, books and musical instruments at the time of her death.

Thomas N. Armstrong III, who greatly expanded the Whitney Museum of American Art’s holdings when he was its director in the 1970s and ’80s but whose ambitious plans for a museum addition aroused a firestorm of opposition that led to his dismissal, died on Monday in Manhattan. He was 78.

The cause was cardiac arrest, his daughter Amory Armstrong Spizzirri said.

Mr. Armstrong was the director of the Pennsylvania Academy of the Fine Arts when he succeeded John I. H. Baur as the director of the Whitney in 1974. A patrician figure with a fondness for bow ties and colorful stunts, Mr. Armstrong set about strengthening the museum’s permanent collection, buying Frank Stella’s 1959 black painting “Die Fahne Hoch!” for $75,000 in 1977 and Jasper Johns’s “Three Flags” for $1 million, a price that seemed extravagant in 1980 and a steal today.

In a whirlwind fund-raising drive in 1982, he raised more than $1.25 million to buy Alexander Calder’s “Circus” (1926-31), an assemblage of more than 50 miniature performers and animals. It had been on loan to the museum but looked as though it might be sold in Europe to help settle the Calder estate’s tax debt.

“These works are pillars of the Whitney’s collection and of American art,” said Adam D. Weinberg, the current director of the Whitney, who once worked under Mr. Armstrong. “He was brilliant at bringing together coalitions of people to acquire artworks, for which we had a minimal acquisition budget. We still have works coming in that he negotiated as gifts years ago.”

“Art in Place,” a 1989 show highlighting the museum’s acquisitions of the previous 15 years, underlined the growth of the permanent collection to 8,500 works from 2,000.

Under Mr. Armstrong’s directorship, the museum had a number of important shows, including a Jasper Johns retrospective in 1978 and large exhibitions of Mark di Suvero, Cy Twombly, Marsden Hartley and Calder.

Desperate to secure additional space for the museum’s collections, he developed plans for a 10-story, $37.5-million addition to the Whitney’s main building.

The proposed addition, designed by Michael Graves and announced in 1985, drew immediate opposition. Neighborhood residents feared a behemoth, and many architects believed it would destroy the integrity of the existing Marcel Breuer building. After Mr. Armstrong gradually lost the support of many of the museum’s trustees, the plans were dropped in 1989, and the next year he was dismissed.

A champion of Andy Warhol’s work — he had organized an exhibition of Warhol portraits at the Whitney in 1979 — Mr. Armstrong became the first director of the Andy Warhol Museum, which opened in Pittsburgh in May 1994.

Nine months later he resigned. It was reported that he was unhappy at how difficult it was to raise money for the museum and that he and Ellsworth M. Brown, the president of the Carnegie Institute, which managed the museum and provided it with financing, could not agree about the museum’s direction.

Thomas Newton Armstrong III was born on July 30, 1932, in Portsmouth, Va., and grew up in Summit, N.J. He painted in high school and earned a bachelor’s degree in art history from Cornell in 1954.

After serving in the Army, he worked for Stone & Webster, an engineering and securities firm, in Manhattan. But determined to make a career in the arts, he began studying museum administration at the New York University Institute of Fine Arts in 1967. A study project at the Abby Aldrich Rockefeller Folk Art Collection in Williamsburg, Va., led to his appointment as a curator at the collection.

In 1971 he was named director of the Pennsylvania Academy of the Fine Arts, where he put into motion the renovation of the main building, a project completed in 1976.

Mr. Armstrong seemed a conservative choice for the Whitney, and on his appointment he expressed a certain diffidence about his credentials as a promoter of recent American art. “I’m not exactly the kind of person who can now be considered as an active participant on the contemporary scene,” he told The New York Times. “But I go to galleries all the time and I used to be a painter myself.”

An unexpected benefit of today's widespread reductions in museum funding is the proliferation of small exhibitions that make austerity an asset. Witness "Kandinsky and the Harmony of Silence: Painting With White Border" and "Stella Sounds: The Scarlatti K Series," at the Phillips Collection here, each a judicious, focused study of a specific aspect of a modern master of abstraction. Despite the differences between the two protagonists—the Russian-born Wassily Kandinsky (1866-1944) was exclusively a painter, while the American Frank Stella (born 1936) has long made wall-mounted constructions that test the boundaries between two- and three-dimensions—the exhibitions are complementary, as their related titles suggest. Kandinsky, a pioneer of abstract painting, is one of Mr. Stella's heroes and, if we look attentively, we discover fascinating affinities between the two artists' work.

"Kandinsky and the Harmony of Silence," organized jointly by the Phillips and the Solomon R. Guggenheim Museum, New York, centers on the Guggenheim's pivotal 1913 painting of the exhibition's subtitle and the Phillips's closely related 1913 canvas, "Sketch 1 for Painting With White Border." Kandinsky conceived the picture soon after he returned to his adopted city of Munich from an extended visit to Moscow. A group of watercolor and ink studies made in 1913, most from the Lenbachhaus und Kunstbau in Munich, allows us to follow Kandinsky as he strove to re-create what he described as the "extremely powerful impressions" of Moscow he received on his trip. We see him revisit particularly Russian motifs that had preoccupied him earlier—the rushing horses of a troika; an icon-derived, mounted St. George spearing the dragon—fragmenting the images into patches of color and emphatic sweeps of line. We watch as he compresses and expands compositional elements, changing the vertical of the Phillips's "Sketch 1" to the horizontal of the Guggenheim's larger picture. The dark, saturated palette and layered surface of "Sketch 1," testimony to many reworkings, are replaced by lighter, thinner, unrevised colors, clarified by the brushy white "surround" that gives the Guggenheim painting its name. This swelling border, added last, embraces all but the lower left corner of the centralized image, canceling out the lingering sense of rational space of "Sketch 1" and pushing the vestiges of the troika, St. George and a mountainous landscape firmly toward abstractness. The color white itself, according to Kandinsky, connotes "dead silence," emphasizing the center's Moscow-inspired multiplicity and chromatic cacophony.

A few slightly later works, from the Centre Georges Pompidou in Paris and the Guggenheim in New York, suggest the lasting reverberations of "Painting With White Border" within Kandinsky's work. Two canvases, from 1916 and 1920, make profitable use of neutral surrounding zones to enhance the complexities of their centers, while a 1915 watercolor reprises and expands the Guggenheim picture's horizontal composition, rendering the image even more open and abstract. A surprising inclusion is a freely painted gouache of a garden concert (c. 1911-12), by Kandinsky's companion during his Munich years, Gabriele Münter. Technical examination of the Phillips's and Guggenheim's paintings, illuminatingly documented in the show, not only revealed the many alterations to "Sketch 1" during its evolution, and the assured confidence with which Kandinsky approached the Guggenheim's painting, but also showed that "Sketch 1" was painted on Münter's abandoned canvas version of the gouache. Gift or appropriation?

The Jewish Claims Conference agreed to cede ownership of a collection of antiquities to the Leipzig museum that has housed them for 80 years, ending a dispute with the grandson of Georg Steindorff, the Nazi-era owner.

After winning a 16-year legal battle against Leipzig University to secure the 163 artifacts, the Claims Conference said today that the collection will remain where it is. A Berlin court ruled on May 26 that the sale was made under duress and thus invalid. It ordered the collection to be transferred to the Claims Conference -- against the wishes of the heir.

Eighty-eight-year-old Thomas Hemer of Nevada had sought to keep the collection in the Leipzig University Egyptian museum named after his grandfather, as reported by Bloomberg on May 21. Steindorff, an eminent Egyptologist of Jewish origin, escaped Nazi Germany in 1939. Hemer argued that the university department was his grandfather’s life work and his legacy should stay in its museum.

“Important for us is determining that the loss was due to persecution,” Roman Haller, the director of the Claims Conference in Germany, said in a statement sent by e-mail. The court judgement “sends a special signal to all museums, galleries and auction houses,” he said. “The circumstances under which the cultural assets reached the museums must be transparent: We owe this to the victims.”

The antiquities include a 4,000-year-old Nagada bowl, ancient clay figures, early Islamic ceramics and Greek and Roman objects. Steindorff sold those acquisitions to the university for 8,000 Reichsmarks (about $3,200 at the time) in 1937 and they have been there ever since.

Millions of pounds raised by the sale of a little-known Picasso masterpiece are to fund medical research into obesity, diabetes and heart disease.

The portrait of the artist's lover, Marie-Therese Walter, fetched £13.5m when it went under the hammer on Tuesday at Christie's Impressionist and Modern Art auction in London.

The 1935 work, "Jeune fille endormie", was given to the University of Sydney last year by an anonymous US donor on the condition that it be sold to support scientific research at the university.

"When they gave us this remarkable work our donor said "this painting is going to change the lives of many people"," said Michael Spence, the university's vice-chancellor.

"They were right. We are grateful for their extraordinary generosity and delighted with the outcome of the auction," he added.

The rarely-seen piece was estimated to raise between £9 million and £12 million but sold to an anonymous British buyer for £13,481,250.

Giovanna Bertazzoni, director of Impressionist and Modern Art at Christie's, said it was "an absolute jewel of a painting by one of the great artistic geniuses of Western art", adding that the work was "bursting with colour and luring the viewer into the intimate sanctity of Picasso's love for Marie-Therese."

"We are thrilled to have realised a strong price for Sydney University's Picasso, especially knowing that the proceeds will benefit such a worthy cause," Bertazzoni said.

Our culture is turning into one long awards ceremony. Last week alone saw the BP Portrait award, the Art Fund prize and the shortlist for the Samuel Johnson book prize. As a judge on two recent prizes, including the portrait award, I have taken a certain amount of pleasure in the way a jury can make a point, even advance an argument; how an interesting choice of shortlist, a convincing winner, can convey ideas about art. But that's one way of looking at it. At times there seems to be a new prize announcement every few days. Can this really be good for culture? And what drives it?

Dramatists were awarded prizes in classical Athens, and Sophocles was a frequent winner, so clearly prizes are not incompatible with great art. But surely there are drawbacks to a culture dominated by competitions and awards. The rise of the prize means the public is more and more guided by official taste as embodied in juries. It is often said the critic is a dying breed. But juries are replacing critics, and they exert influence in a far more questionable way. A jury does not have to explain its decision to the public; does not have to say why one artist is better than another. Yet while critics are constantly questioned, the decisions of juries seem to be taken incredibly seriously.

That is a mistake. I have been on two juries. When I was involved in the Turner prize as well as this year's BP Portrait award, I did what a critic should do, and wrote pieces explaining and defending my point of view. In doing that I hopefully made clear that it is a point of view, a personal opinion: no more. But I also saw, on both juries, how things work behind the scenes and how easily bad, biased decisions might be made.

Charging down the red carpet of the 64th Cannes Film Festival last month, the 39-year-old grandson of Baron Philippe de Rothschild recalled his pioneering ancestor’s eccentricities with delight.

“My grandfather was the only Rothschild who detested being referred to as a businessman,” says Julien de Beaumarchais de Rothschild. He’s the baron’s heir and with his 77-year-old mother, Baroness Philippine de Rothschild, owns privately held Baron Philippe de Rothschild SA, which he says annually produces between 100,000 and 150,000 bottles of the Bordeaux first-growth Pauillac Chateau Mouton Rothschild.

It has been that way since 1973, when the baron successfully concluded his 20-year crusade to convince fussy French government vineyard analysts and the fashionable four first-growth chateaux of Margaux, Latour, Haut-Brion and Lafite- Rothschild to include Mouton as the fifth member of the exclusive Grand Cru Classe wine coterie first established by Napoleon III at the 1855 Universal Exhibition in Paris.

The baron’s lobbying campaign employed the jingle, “First, I cannot be. Second, I do not deign to be. Mouton, I am.” Once accepted into the club, the baron, who wrote and translated poetry, rewrote the ditty to read, “First, I am. Second, I used to be. But Mouton does not change.”

Then, in 1981, seven years before his death and just months before the fabled 1982 crop, when collectors began to hoard Mouton and other Bordeaux first growths as investment vehicles, the baron brokered what at the time was a unique long-term sponsorship accord with Cannes festival organizers.

Official Wine

The roll-over deal ensured that Chateau Mouton Rothschild would remain the festival’s official wine supplier. The baron’s brands, including Mouton Cadet Rothschild, the $8.99 everyday drinking wine he first bottled in 1930, now share the festival’s marquee with official private bank Societe Generale SA, water supplier San Pellegrino and French hair-salon operator Dessange International SA.

“The Cannes Film Festival,” says French Minister of Culture and Communication Frederic Mitterrand, “continues to generate a powerful dream.”

At Cannes, Beaumarchais lives the dream. He waves at the platoons of photographers snapping his photo for lifestyle magazines and smiles when a fan mentions that cinema villain Auric Goldfinger served James Bond a bottle of 1947 Mouton in the movie “Goldfinger.”

“The baron was the elegant bad boy of the Rothschilds,” Beaumarchais says of his grandfather’s role in the family that financed Wellington’s victory at Waterloo, underwrote construction of the Suez Canal, funded the California Gold Rush and brought Diaghilev’s Ballets Russes to Paris.

Bugatti Racer

“My grandfather loved life and would have hated the idea of bankers storing Mouton in a vault as an investment,” Beaumarchais says with a frown. “He raced Bugattis at the Grand Prix, Stutz cars at Le Mans and made ‘Lac aux Dames,’” one of the first French talking movies.

As for the baron’s signature drink, “he wanted Mouton to be the wine of adventure, action and exploration,” Beaumarchais says. “Grandfather was full of strength and life and wanted his wine to be drunk among those who shared his humanism. This is my legacy.”

The chateau’s 41-year-old managing director, Hugues Lechanoine, says the minimum price of sharing in that heritage is 300 euros ($432). “A good wine costs 150 euros a bottle,” Lechanoine says on a terrace that overlooks a flotilla of yachts in the Cannes harbor. “A luxury wine starts at 300.”

Japanese artist Takashi Murakami has been commissioned by Google to produce the latest in its series of Google doodles.

The multicoloured cartoon, titled The First Day of Summer, entwines flowery bursts around gaping mouthed heads characteristic of the Japanese anime style.

The doodle represents the date of the summer solstice, much loved by druids, but the doodle's title is somewhat misleading – the solstice is the longest day in summer, rather than the first, although it may give new hope to those deluged in recent days and those heading to the Glastonbury festival this weekend.

Murakami's work is usually known for its appropriation of high art forms such as sculpture, which he then melds with low art themes from pop culture to mass media. He has produced a variety of contemporary work from 30ft sculptures to his so-called superflat paintings, in which he combines flat graphic imagery and colours to create highly patterned images.

Murakami has also carried out more commercial endeavours including a close collaboration with fashion designer Marc Jacobs, and in 2008 was included in Time magazine's 100 most influential people.

Pablo Picasso’s portraits of three different lovers raised 42.2 million pounds ($68.5 million) last night in London as collectors of the Spanish artist battled for paintings and led demand for 20th-century artworks.

Christie’s International’s three-hour auction of modern and Impressionist art totaled 140 million pounds, including 40 lots from the estate of the Swiss art dealer Ernst Beyeler, who died last year. The Basel-based gallerist’s material contributed 44.7 million pounds with only one piece failing to sell -- a Claude Monet water-lily painting.

“The market is strong,” the New York-based dealer Tony Shafrazi said. “The media is panicking about the economy, and yet there’s a lot of hidden money out there.”

Picasso is the world’s most heavily traded modern artist at auction. Wealthy investment-conscious collectors looking for a hedge against recession are attached to his trophy works, particularly when they depict his lovers. The 1932 painting of Marie-Therese Walter, “Nude, Green Leaves and Bust” fetched $106.5 million -- the most for any artwork at auction -- at Christie’s, New York, in May 2010.

A 1939 painting of Dora Maar, “Femme assise, robe bleue,” showing Picasso’s lover on a chair sporting a purple hat, sold yesterday for 18 million pounds, against an estimate of 4 million pounds to 8 million pounds. It had been acquired by the seller’s family from Beyeler in about 1968.

The new buyer was the Swiss-based Greek collector Dimitri Mavrommatis, bidding by telephone to Thomas Seydoux, Christie’s international head of Impressionist and modern art, the auction house said after the sale.

Marie, Dora

Two lots earlier, the London-based dealer Alan Hobart of the Pyms Gallery paid 13.5 million pounds for Picasso’s 1935 painting “Jeune fille endormie,” showing the artist’s mistress Walter snoozing on her folded arms.

Valued at 9 million pounds to 12 million pounds, the canvas was sold by an anonymous owner who is donating proceeds to the University of Sydney to fund medical research.

“The Maar was the best of tonight’s Picassos,” said Guy Jennings, partner in London-based dealers Theobald Jennings. “The market is sane and solid, and slightly stronger than it was in May in New York.” Jennings was one of several dealers who noticed Asian clients bidding on “entry level” works by modern masters. A Picasso print priced at 67,250 pounds was one of 4 percent of the lots that went to Asian buyers. European bidders bought 54 percent of the works, with the remaining 42 percent falling to the U.S., said Christie’s.

Roland Sledge, a 65-year-old lawyer for an oil and gas company in Houston, is no art world habitué. He began collecting prints and works on paper a little more than a decade ago, focusing on Abstract Expressionism, and has done some business with small New York galleries, “though I mostly just stumbled into things that I liked,” he said in a broad Texas accent.

“I don’t have a lot of connections,” he added.

But Mr. Sledge, and a growing number of collectors like him, have lately been demonstrating that connections may not be as important as they once were — and that online sales, a segment of the art business given up for dead not long ago, are becoming an increasingly important part of its future.

Over the last year and half, Mr. Sledge has collected almost exclusively online, buying nine pieces at an average of about $4,000 each at online-only auctions through Artnet, the art market information company. Artnet tried and failed to become one of the pioneers of online sales in 1999, suspending those auctions two years later after it lost millions of dollars and decided that the market wasn’t ready. But it got back into the business in 2008, and after less than three years, the auctions now account for 14 percent of the company’s income.

The glamorous, newsmaking sales of Sotheby’s and Christie’s these are not. The average price of an artwork won through an Artnet auction is about $6,800 now, up from $5,600 last year, which wouldn’t come close to paying the commission on most high-end auction sales. But Artnet is one of many companies that believe the time might finally be right for a sizable portion of the art market to begin migrating online, the way sales for specialized items like rare books and antiques already have.

The VIP Art Fair, a weeklong online event that mimicked the mechanics of a traditional art fair with virtual booths, attracted a large international group of blue-chip galleries last January and, despite some well-publicized technical glitches, was seen as a success by dealers and collectors. Art.sy, a venture that will use Pandora-like technology to help art buyers find pieces and the galleries selling them, has already lined up heavyweight supporters like the dealer Larry Gagosian and Jack Dorsey, a founder of Twitter. And most major auction houses also now allow online bidding for sales happening in the physical world.

But while online bidding and fairs and services like Art.sy essentially serve as a digital bridge to bricks-and-mortar galleries and auction houses, Artnet officials say that much of the art market below a certain price level will soon operate almost entirely in the virtual realm. Auctions on Artnet take place around the clock, eBay-style (though the lots close only on weekdays, so far), and the company vets sellers and relies on their photographs and descriptions of the provenance and quality of artworks.

Fisherman tony Varney and his daughter Selina found an 1885 work by US watercolourist Winslow Homer outside a rubbish dump in Ireland in the 1980s. The work had apparently been abandoned. They subsequently learnt it was worth £150,000, and attempted to sell the work at auction in New York in 2009.

After learning of the sale, the painting's original owners stopped the auction, claiming the work, called Children Under a Palm Tree, was rightfully theirs. Two years on, the two families are still locked in a legal stand-off over the painting's ownership, and their story can be told in full for the first time.

"I would have willingly sat down and sorted this out," Ms Varney said. "I just don't know how long this is going to go on. I am just answering questions they are throwing at us as honestly as I can. I don't know if they are intending on striking a deal. At the moment it is just going round and round and round."

She said she was "upset" when Blake's descendants, who live at the family home in Myrtle Grove, County Cork, stopped the sale, and said the dispute had caused a "lot of heartache, a lot of grief, a lot of money".

The work shows the three children of Sir Henry Arthur Blake, a British colonial administrator who lived in the Bahamas in the late 19th century. Homer was a guest of the family and painted their children, who were holding a fancy dress party.

The watercolour remained in the family's ownership, and it travelled with them when they retired to County Cork, Ireland. It is presumed it then remained there for the ensuing decades.

However, mystery still surrounds how the painting managed to find itself outside a rubbish dump in the 1980s. While Blake's descendants claim it was stolen from their property in Myrtle Grove, they have no record of the crime taking place. Ms Varney and her lawyers argue that since her family found the work, and it remained in their possession for nearly two decades without any claim on its ownership, it now belongs to them.

If true, it would be the only known painting of Theo, although Vincent made several sketches of his brother, who supported him financially and was his lifelong confidant and friend.

"People have often thought it was funny that there were no portraits of Theo, given that they were so close," said museum spokeswoman Linda Snoek.

She said the portrait was made in 1887 while the pair lived together in Paris – a lesser-known period of Van Gogh's life, since the bulk of information about Vincent is derived from letters he sent to Theo.

The painting has long been in storage, but went on display at the museum in Amsterdam on Tuesday as part of an exhibition on new findings about the painter's time spent in Antwerp and Paris in 1885-1888.

Though the brothers resembled each other physically, scholars determined the painting represents Theo by a number of factors.

Head researcher Louis van Tilborgh compared two paintings from 1887 with similar-looking men in suits set against a blue background.

"They are two small, detailed portraits that when you see them you think: they belong together," Van Tilborgh said in an interview with Dutch state broadcaster NOS.

A Palestinian art academy on Monday put on display a $7 million Pablo Picasso masterpiece, the first of its kind in the West Bank.

Picasso's 1943 "Buste de Femme" is on loan from the Van Abbemuseum in Eindhoven, Holland. Organizers said they had to overcome a lack of reliable transport and several Israeli checkpoints along the way.

The art director of the Palestinian academy, Khalid Horani, said it took two years to arrange the loan. He said the painting's journey was "a story full of details and difficulties."

The small art school in Ramallah put in the loan request in early 2010. Normally, such inter-museum exchanges are routine and take about six months to coordinate.

"Nothing is normal over here," Horani said. "We planned to have an art work here, but found ourselves going through all the political complications."

Horani said the painting was flown from Amsterdam to Tel Aviv and was then escorted to Ramallah by an Israeli security company before going on display. He said the uprisings in the Arab world also postponed the artwork's delivery.

Possibly the most iconic dress in film history, the “subway” dress Marilyn Monroe wore in the 1955 film “The Seven Year Itch” was sold Saturday for $4.6 million at a Hollywood costume auction.

The dress, designed by William Travilla, was part of actress Debbie Reynolds’ private collection of nearly 600 costumes and other film memorabilia that were auctioned off at Beverly Hills’ Paley Center for Media.

The ivory, pleated halter dress was estimated to sell for about $2 million.

The Brooklyn Museum has canceled plans to mount a controversial exhibition of graffiti art, citing financial constraints. The show, “Art in the Streets,” is currently at the Museum of Contemporary Art in Los Angeles, where it has drawn large crowds but has also attracted criticism for prompting an increase in graffiti in the surrounding neighborhood.

Among the critics was Heather Mac Donald, a fellow at the Manhattan Institute, who published an article in City Journal this spring, titled “Radical Graffiti Chic,” in which she accused the Los Angeles museum of glorifying vandalism.

Her article alerted The Daily News that the show was headed to Brooklyn in 2012, and in late April, it ran a sharply critical editorial, writing that art “mavens will be sticking their thumbs in the eyes of every bodega owner and restaurant manager who struggles to keep his or her property graffiti-free.”

On May 5, shortly after the editorial ran, Peter F. Vallone Jr., a member of the City Council, wrote to the director of the Brooklyn Museum, Arnold L. Lehman, urging him not to do the exhibition. “Let me be very clear, taxpayer money should NOT be used to encourage the destruction of our taxpayers’ property,” Mr. Vallone wrote, noting that the museum receives about $9 million annually from the city.

The first time Satu Vanska held the Australian Chamber Orchestra’s $1.8 million Stradivarius and played the opening notes of Jean Sibelius’s violin concerto, she knew she wanted it.

“The thought that it could be yours, it makes you a little nervous -- and very happy,” Vanska, 32, assistant leader of the Sydney-based orchestra, said in a telephone interview.

The violin, a composite of two made by Antonio Stradivari in 1728 and 1729, is the first asset of a new fund set up by the orchestra that gives investors the chance to speculate on the value of rare musical instruments. Auction house Tarisio sold a 1721 Stradivarius called the Lady Blunt on Monday for a record 9.8 million pounds ($15.9 million), 116 times the 84,000 pounds it fetched at Sotheby’s in 1971.

“Violins appear to be quite a good investment,” said Kathryn Graddy, a professor of economics at Brandeis University in Waltham, Massachusetts. “The returns are comparable to art, lower than stock returns but slightly higher on average than bonds. They are in a sense a safe haven because the returns are steady and not as volatile as art.”

Violins made by Stradivari and his contemporary Giuseppe ‘del Gesu’ Guarneri averaged gains of 6.9 percent a year between 1980 and 2006, compared with an average advance of more than 9 percent in the S&P 500 Index (SPX) and about 6.6 percent from U.S. treasuries, Graddy wrote in a study published in 2008.

Russell Crowe’s Teacher

The new fund is the brainchild of Richard Tognetti, the orchestra’s artistic director, who taught actor Russell Crowe to play the violin for the film “Master and Commander.” He wanted to find a way to make some of the world’s best instruments available to the orchestra, which gets most of its funding from ticket sales and sponsorship.

The minimum investment is A$50,000 ($53,000) and the fund will terminate in 2021, when the instruments will be sold and the money disbursed unless investors vote to extend it, the orchestra’s website says.

“None of the musicians can afford to buy any of these fine instruments,” Tognetti, 45, said in a telephone interview. “Even way below a Stradivarius, you’re in an amount of money that is beyond what we earn.”

Tognetti plays a 1743 ‘del Gesu’ called the Carrodus, valued at $10.5 million, that was bought by an anonymous benefactor for $6.6 million in 2006, according to the website.

The orchestra’s new Stradivarius has “quite a powerful sound that carries all the way to the end of the concert hall,” Vanska said. “At the same time, it’s very sweet and brilliant, and that’s a very nice combination.”