After a dismal 2009, there is hope for the art auction segment. There was reason for optimism at in the past quarter, as the major houses started to move impressive pieces again, and momentum continued through the beginning of this year. Now, we're getting ready to move into the busy months of May and June. Unlike last year, auctioneers, collectors and dealers seem to be ready to play.

May 2008 was essentially the last hurrah of an art market rally that had lasted several years and created incredible amounts of paper canvas and bronze wealth. It was at this point that Sotheby's (BID) sold a fairly late triptych by artist Francis Bacon for an incredible $86 million to Russian billionaire Roman Abramovich, a transaction that has become the poster child for the excesses of the art market.

The art market spent a year and a half circling the drain. Signs of life at the end of 2009, however, have become a reality, with recent auctions at Sotheby's (BID) and Christie's (CRUPF) exceeding expectations and showing triple-digit growth from comparable auctions last year.

Overall, art prices last year were off around 50%, with the contemporary art sector suffering even more severe declines of up to 70%. With prices this low and a recovery taking shape, it's time for investors to get in, and it looks like we'll see an art rally this year.

Craig Newmark testified on Thursday that he regretted getting into bed with auction site eBay (EBAY) almost as soon as his head hit the pillow. The founder of Craigslist, the online classified site that has decimated large chunks of the newspaper industry, sold 28% of his company to eBay in August 2004. Within months, he recounted, eBay began to pull back on its promises, causing him to regret the decision.

During the negotiations more than five years ago, Meg Whitman, who was the CEO at the time, told Newmark that eBay would be happy to sit back as a minority shareholder for several years and use Craigslist as its exclusive venue for classified ads. Yet, shortly after the deal closed, eBay pushed for a bigger piece of the company and acquired an online classified company outside the United States. Both Whitman and company founder Pierre Omidyar testified that eBay was clear about its intentions.

The lawsuit, filed by eBay against Craigslist, involves the size of the former's minority stake in the privately held, relatively low-tech and highly popular classified site. eBay claims that Newmark diluted its share to 24% through a "self-dealing" scheme to issue more equity.

What do you get for the person who has everything? Well, maybe you buy him a piece of history. The U.S. Marshals Service has done all the hard work, and now you can take advantage of it... maybe even at discount prices! Possessions seized from Ponzi schemer Bernie Madoff are set to go under the gavel in New York City on Saturday, so bring your checkbook and your appetite for luxury. The money will be used to compensate the victims of Madoff's crimes.

Sotheby's (NYSE: BID) had a great night this week, tripling the performance of competitor Christie's (OTC: CRUPF). But, it didn't come soon enough to help the company's third quarter results.

The auction house suffered from the art market slump that was exacerbated by the global financial crisis, posting a net loss of $57.8 million (89 cents a share). This is worse than the $47 million loss (73 cents a share) it delivered a year earlier. Three analysts that Bloomberg surveyed expected a loss of 29 cents a share. Revenue was off 41% to $44.9 million for the quarter.

An embittered Sotheby's (NYSE: BID) has turned in its first quarterly profit in a year, showing signs that the worst of the art market slump may be over. The company, which has seen contemporary art auction prices fall 76.2% from May 2008 to today, reported a decline of 87% in earnings for the second quarter, but company CFO William Sheridan says that the worst of this market is behind us. Sell-through rates are up, with more inventory moving likely to help with sagging revenues.

But commission revenue seems to be headed in the wrong direction. For Q2, Sotheby's reported commission revenues at 21.3%, up from 41% year-over-year. Unfortunately, this isn't the measure you want to go up. Lower-priced pieces tend to have higher commission rates, meaning that the auction house's Q2 performance was dragged down by less desirable inventory.

Famed online auction platform eBay (NASDAQ: EBAY), whose Internet colleagues include Amazon (NASDAQ: AMZN), Google (NASDAQ: GOOG), and Yahoo! (NASDAQ: YHOO), will be reporting earnings for the third quarter on Wednesday after the market closes up shop. What should shareholders expect from the company?

Well, according to data posted by Trey Thoelcke, shareholders shouldn't expect much. While the top line is expected to rise by double digits (around 13%) to $2.1 billion, nothing is really cooking in terms of the bottom line. The call is for $0.41 per share. eBay booked $0.41 per share in the year earlier period. As you can see, that's a 0% growth rate, and that's never good (well, unless you're a financial company, in which case that's actually great). However, there is one silver lining to the earnings story for shareholders. If you take a look at past earnings data, you'll notice that eBay has a snazzy reputation for beating estimates issued by analysts. So, I'd be willing to bet we'll see an easy beat this week.

As to whether or not this particular stock will rally upon such news, that's difficult to say. If Monday's rallying sentiment makes another visit on Wednesday, then I'd say eBay could be an interesting earnings trade, mostly because it isn't far from its 52-week low. Unfortunately, I think any rally that we get in the market right now is not to be trusted. It just can't be. Profit-taking is always going to be waiting to sap the power out of any rally, simply because we know the economy isn't going to be great for many months to come. So, even though I like the technical set-up to some degree vis a vis eBay's earnings-beating history, I personally wouldn't be buying. For me to trust any rally, I'd need to see some confirmations and additional up days.

Do you like auctions? Personally, I don't. Sure, the stock market is essentially an auction, but it's an auction without a lot of noise (at least on my end). Anyway, this brings me to a BusinessWeek piece on eBay (NASDAQ: EBAY) and its evolution. It looks like auctions are no more fit to survive than the dinosaurs were. Research overwhelmingly shows that users of the most famous online auction destination in the world would rather pay a fixed price for an item than haggle over it like a frantic trader at a busy bazaar.

Now, as one commenter made clear in the article, this changes the essential gene structure of eBay's DNA. But is mutation necessarily bad in this case? Not to my way of thinking. To be honest, I haven't done any eBaying directly; I usually use a friend to acquire an item for me if I'm looking for something. Not only am I too lazy to open an account, but I dread having to play the auction game. Why put up with such nuisance? When I want to buy something, I don't want to compete and see values change. Think about it: when you go to Wal-Mart (NYSE: WMT), do you want to barter over a bar of soap?

Okay, so we're not talking about bars of soap. We're talking about items that, to be fair, do lend themselves to the auction motif. Comic books, autographed photos, rare recordings, and so forth, are definitely fair game for the electronic gavel. Still, it's annoying. Wouldn't you rather know that a rare copy of The Texas Chainsaw Massacre for the Atari 2600 is $200, take it or leave it, and that you didn't need to get down in the pits to start bidding for it?