Seth Warshavsky’s cell phone rings every two or three minutes. The 24-year-old Internet mogul exhibits stress beyond his years, intensely driven by the art of the deal and his goal of reaching $20 million in revenues this year. His company, Internet Entertainment Group, is surely one of the most lucrative Web publishers to date. The not-so-secret to his success: sex sells. IEG’s offerings include Penthouse’s Web site, ClubLove.com, Sexxxvision.com, FreeLiveSex.com and Psychiczone.com. Forthcoming sites are Formlawyer.com (tips for sex phone addicts on how to file for bankruptcy), an art auction site and a gambling site.
From his many sex sites, Warshavsky rakes in monthly $9.95 fees from users and pay-to-view fees of $29.95 per 15 minutes for live, streaming, steamy video. “It’s a fact that sex is a product that sells,” Warshavsky says calmly. “If you have a product that sells, you may as well take advantage of it. If I could sell toaster ovens, I’d sell toaster ovens.”
Warshavsky hardly looks the part of someone banking on the skin trade. He’s a short, freckle-faced, clean-cut Gen-Xer who recently bought a boat and likes waterskiing but says he is bored when not working. He doesn’t have a girlfriend. He started his entrepreneurial career at 13 when he ran a BBS called Dungeon Quest, an online game that charged $2 a month. At 16 he founded a clothing company called Urban Apparel. At 18 he opened a service bureau for phone sex called J&S Communications that claimed sales of $60 million by 1994. At 22 he and a partner invested $3.5 million to launch Candyland.com on the Web. The site is now called ClubLove.com after Hasbro sued him for using the name of its board game.
Internet Entertainment Group resides in a loft building in downtown Seattle’s Silicon Harbor, the district that’s also home to Amazon.com. Warshavsky is constantly traveling to Los Angeles, Las Vegas and New York. He figures now is a good time for an IPO. “Technology stocks are still doing well. The Internet is an exciting place. We’re one of the few Internet companies that’s generating a profit.”
As much as Warshavsky is bullish on the Web, he can’t wait for interactive television. He’s working on distribution deals with all the national cable providers. “When they move into interactive media distribution with high-speed cable Internet delivery,” he says, “we want to be a major force.”
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