PlanetOut, under the direction of CEO Megan Smith, already serves up daily news, an Internet radio show called "Homophonic" and numerous discussion boards and chat rooms to its 485,000 registered members. It also runs the gay and lesbian sections of AOL (which owns a stake in PlanetOut) and several major portals including Yahoo, Netscape and Lycos. A mechanical engineer by training, Smith, 35, did a stint at MIT's Media Lab and led product development at the pioneering handheld computing firm General Magic before joining PlanetOut in 1996.

PlanetOut just announced a merger with Liberation Publications, publisher of Advocate and Out magazines. What are your plans?

We really want to be the pervasive brand in this space, and there really aren't many ways to reach gays and lesbians. There are only seven gay and lesbian publications with national distribution, and the Advocate and Out are 87 percent of that distribution. So it's a great way to reach more people, in all the places they are.

It's also a great way to augment our content offerings. We get lots more great content for our site; we're going to offer our users subscriptions to these publications, and we can then offer combined packages of print and Web advertising to our advertisers.

With our merger with Advocate and Out, we have phenomenal content -- it's our own AOL Time Warner deal, since we're merging the dominant online and print properties. We're going to run the Advocate.com Web site and add its content to the PlanetOut site. And on the portals, we're going to bring Advocate and Out with us.

Are you planning on going public? Do you think the market is ready for the first gay IPO?

It's one of the options we're considering, but we haven't made any official announcements about it. We've gotten phenomenal response from analysts, and we've satisfied venture capitalists on the same kinds of questions that you'd get if you were going public -- so the answer seems to be yes, the market is ready.

Has the corporate world been accepting?

Actually, one of the most closeted areas, the banking sector, has been amazingly open to PlanetOut. We're the first company focusing on the gay and lesbian community that has run the gantlet and gotten venture backing. I think it's because they can see we're supported by top-tier companies like AOL; AOL owns 12 percent of us. We have 200 advertisers on the site. There have been a handful of advertisers that have turned us down, but the good news is that I can count them on one hand.

What are the biggest challenges for online communities today? It seems like there was a lot of interest in communities like GeoCities and TheGlobe.com which has since petered out.

There was a lot of focus on the early communities, but they also were very general places, like IRC [Internet Relay Chat]. Since then, it seems that people have found different homes on the vertical portals.

Is there anything really different about running a gay portal as opposed to say a black portal or a women's portal or some other target demographic?

We're all basically in the same business, running a version of AOL that's vertical. You're going to want to offer your members a lot of the same basic services. The gay community does have some unique requirements, it's really hard to find domestic-partner-based auto insurance, for example, or a friendly travel agent.

We started an organization called Communities Inc., which included NetNoir, Thrive and Latino Link, among others. It was a way, when we were all starting out on AOL, to share information. We'd have a conference call every week and talk about how to build a business and figure out what was working and how to attract customers.

How do you handle privacy issues? America Online got a lot of flak for giving up the identity of that gay guy to the military, and I'd assume that keeping your users' identities secret is more critical for PlanetOut than for most other sites.

Yes, it's really important. You can lose your job and your house for being gay in this country, and overseas, in some countries, you can be subject to capital punishment. We actually broke that story about AOL, even though they're a partner of ours. We post our privacy policy up front, and some members share a lot of information with us but it's entirely optional. About 30 percent of our users let us share their name and contact info with dot-orgs like PFLAG [Parents, Family and Friends of Lesbians and Gays] and advertisers.

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