IQ Interactive Special Report: SHOCK TROOPS/THE media

Megan Smith plans to take PlanetOut out of the closet and into an IPO. When you think about the picture of a business or cultural revolutionary, the image of Megan Smith may not readily come to mind. After all, Smith--with her petite, athletic build and low-key demeanor--comes across more like your kid sister's college roommate or the brainiac technologist in a Sci-Fi flick than a rabble-rousing iconoclast. However, it would be foolish to let Smith's disarming cool lead you to believe that she doesn't have revolution on her mind. As the CEO of San Francisco-based PlanetOut, a multi-platform entertainment and lifestyle media company aimed at serving the oft-ignored, frequently misunderstood and sometimes reviled gay and lesbian market, Smith is on a mission to bring together people of all sexual proclivities--be they gay, straight or somewhere in between--and show marketers the strength of the group's enormous purchasing power. "It's not that it's a wealthier group," says Smith. "It's just that there are less children--not no children, but less children--so there's more disposable income and more time to spend that money." Educating advertisers to the attractiveness of this demo can be difficult at times, admits Smith, since many traditional companies may fear conservative backlash and have shied away from reaching out to the community. But Smith believes that this is an obstacle that can be overcome. "One of the biggest challenges for PlanetOut is to communicate to advertisers what this market is about," says Smith, who adds that "the gay and lesbian market can be elusive sometimes because of issues around the closet." Forcing users out of the closet, though, is not on PlanetOut's agenda. Instead, creating an online community that is safe, fun and populated with "people like us and people who like us" is paramount to the company's vision of inclusiveness. Since it was founded in 1995 by company chairman Tom Rielly, Planet Out has built a registered base of more than 500,000 users, of which Smith claims 5 percent identify themselves as "straight." Additionally, addressing the needs of otherwise disenfranchised gay and lesbian teens and people who live in areas that may not have the openly gay communities of major metropolitan areas is especially important. According to Smith, the Web has given gay and lesbian people from across the country and, in fact, around the world, the opportunity to connect with each other faster and in ways that no other medium has before. "The Internet changed everything for the gay community because it was the first time that you could really reach people and they could reach back," says Smith. Indeed, many in the dot-com biz agree with Smith and hope to help facilitate fulfilling her vision. The privately held Planet Out boasts angel investment from new media luminaries such as MIT Media Lab's Nicholas Negroponte, RealNetwork's Rob Glaser, E*Trade's Kathy Levinson and Excite's Joe Kraus. Last January, Salomon Smith Barney selected Planet Out as one of six privately held companies to present at the investment firm's annual conference, an honor for any startup. "PlanetOut is the first company in [the gay and lesbian] market to have venture capital funding," adds Smith. In recent months, a series of acquisitions by PlanetOut--including the 35-year-old publishing house Liberation Publishing, which owns The Advocate, what Smith calls "A gay Newsweek meets Entertainment Weekly"--along with deals to create a PlanetOut branded TV program, has sparked industry speculation of a PlanetOut IPO. But is the country ready for an out and proud dot-com going public? "The answer for the bankers is yes," says Smith. "We haven't heard anything from them except for, 'It's a business, let's go.' " For the Buffalo, N.Y.-native, the idea of taking her company public isn't too much of a leap of faith. Smith has always been entrepreneurial. "I was the kid who sold 450 boxes of light bulbs in grade school when everyone else sold 20 because I enlisted the fifth graders to sell for me." Smith recently had the chance to meet Queen Noor of Jordan because her majesty "wanted to meet with a bunch of women in technology." "And I thought, 'Right, I'm really going to talk to Queen Noor about gay issues.' " Still, Smith can't help letting her revolutionary attitude slip out from time to time. "It's fun to do my job," she says. "People ask, 'What do you do?' And I say, 'I run a company that reaches users with $450 billion in buying power in the U.S. alone,' and they are like, 'Oh!' "--Kipp Chen

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IQ Interactive Special Report: SHOCK TROOPS/THE media - This Way Out

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