Internet mogul Seth Warshavsky gets written up in Seattle Weekly.
"AS THE NEWEST millionaire computer geek from the Eastside, boyish Seth Warshavsky already has a lot to live up to. Depending on who is characterizing him, he's either a genius, a misogynist, a respected global businessman, an exploiter of children, the Bill Gates of porn, or the Larry Flynt of cyberspace. He has been sued by the Pope and Pamela Anderson Lee, caused a riled-up competitor to spit in his face, and was arrested for choking his former girlfriend during a limo ride in Las Vegas (he claims he was trying to keep her from jumping out).
"He plans to take his fast-rising adult-entertainment Internet company public in April, and last year addressed Congress on issues of sex online (he's for it). His eclectic mix of Net sites offers casino betting, psychic advice, housing loans, and sex-change operations--although, due to complications, he had to postpone last week's online surgery turning a male Florida government worker into a woman named Julie by removing his/her penis (making her one less customer for his Viagra Internet sales site)."
According to the article, Warshavsky is also planning to sell art and music over the Net in the future, and with high-speed TV-quality video, will begin around-the-world transmission of picture-perfect live sex from Seattle.
The article goes on to describe the Hearstian Warshavsky as "the latter-day business descendent of Seattle's First Avenue's historic pornographers--the Second Coming of, say, Roger Forbes."
Historically, from the 1970's through the 1990's, Forbes operated a string of Northwest porno theaters on First and Third avenues in downtown Seattle. At the time, Seattle was home to 11 porn theaters and 14 arcades showing X-rated videos in private booths. However, civic groups conspired to run Forbes out of town on a rail. By the time they came up with workable ordinances, Forbes was living the lifestyle of Robin Leech's rich and famous .
As the movie market faded, Forbes followed the trend to home video and nude dance clubs. He still sells videos, operates clubs in San Francisco's North Beach, and has a share of the national Déjà Vu nude dance chain.
"I have met Roger Forbes on occasion," says Seth Warshavsky, "but I have no sense of his history." Warshavsky, 26, wasn't even born when Forbes began blazing the trail that Warshavsky continues today.
A half-block from Forbes' old Midtown site are Warshavsky's offices which serve as global headquarters of the Internet Entertainment Group (IEG). Employing 150, IEG is estimated to have grossed around $75 million in its first three years.
Above the Pyramid Breweries alehouse in Seattle, Warshavsky has also created the modern-day version of Forbes' nudie joints: voyeuristic sex 24 hours a day, with a modern marketing advantage--home delivery on demand. Here is where women earn $20 an hour in a converted warehouse performing what began as strip dancing in 1996 and now is live sex--alone, with objects, or with each other.
About $3 million worth of push-video and state-of-the-art graphics systems is contained here. Viewing options include the Dungeon, Two-girl Shower, mano-on-mano Buddy Room, or the Couples Room ("Live couples fucking their brains out").
The product is sent by computers to telephone lines and across the Net to the World Wide Web, into millions of homes with an Internet hookup. According to Warshavsky, there are 100,000 fellow members enrolled at $25 a month to view anonymous sex at IEG's Internet sites, the most popular being Clublove.com. Warshavsky calls it "video conferencing."
Warshavsky says dues and product sales (photos, sex objects, videos) at Club Love and other sites made 1998 IEG's best year yet, with revenues topping $50 million (75 percent of it from sex sites, and 30 percent of it profit). His plan now is to take IEG's low-overhead operation public in April, offering stock investors a piece of the pie.
Warshavsky's chances depend on how underwriters and investors view the "image problem." "You can make a lot of money by selling sin, and that could be enticing to investors," says Tom Taulli, a market analyst for IPO Monitor. "IEG is creating another Playboy."
Gordon Firestone, a Los Angeles entertainment attorney, says this, "I don't think there's anything wrong with an IPO by a company like this. IEG has products that are a bit sensational--that's exactly what makes them valuable. I think the underwriters and investors will see the dollars, and won't care too much about the content."
Warshavsky hopes IEG will be valued as high as $500 million. He owns 50 percent of IEG, which, according to the secretary of state's office, is a Delaware company whose president is Warshavsky and corporate officers are two South San Francisco, California, businesspeople--Dana Pierson and Mark Cohn. Warshavsky says that Cohn, who heads up Four Star Financial, a South SF investment company, is his only partner.
"We want to utilize the public money to acquire [more] competitors and diversify our distribution--cut deals with cable companies and in-hotel-room providers," says Warshavsky. "We think the public will react well, based on [the fact that IEG is] one of the only profitable Internet companies."
Last fall, Warshavsky launched a Web site Sexquotes.com which offers the latest stock quotes and pictures of naked babes.
