10 to Watch: Megan J. Smith

Megan J. Smith still looks like the college athlete she was more than 10 years ago. At 35, she has the tall grace of a swimmer, blue eyes and shoulder-length, sandy-brown hair. But as CEO of PlanetOut, Smith has graduated from swim meets to business lunches and from engineering classes to human rights.

Heading up a portal aimed at gays and lesbians is more than a job for Smith. "I think I personalize PlanetOut a little bit," she says.

She came out herself when she was 28. Smith says her mother "jumped into the closet once I had come out," but adds that her parents are now supportive, as are the parents of her partner, Wall Street Journal tech writer Kara Swisher.

Smith has moxie, connections and plenty of experience with computer and Internet companies. She started working with PlanetOut as an adviser in 1996, after spending time at Apple Computer in Tokyo and at General Magic. She was named the site's CEO in 1997.

While General Magic's handheld devices were ahead of their time, Smith says PlanetOut's timing is right on. The site has 360,000 registered members and adds about 1,000 more each day. More than 200 companies advertise on the site.

In what Smith calls the largest ad buy in gay media, NextCard will pay the site $11 million to distribute a cobranded Visa card.

But PlanetOut now faces tough competition. Web sites like Gay.com, the Gaywire News Network and the Gay Financial Network are racing to provide content to the lucrative market. By hosting chat areas and furnishing news on gay issues, the sites are targeting the estimated 16 million gay people in the U.S., 6.8 million of whom are online.

Smith was among the angel investors who put $3 million into PlanetOut in 1995.

The company has also received backing from America Online, which took part in PlanetOut's $16.4 million second round of funding last year.

Despite its marketing and fundraising successes, PlanetOut remains unprofitable. "Like most Internet companies, we are making money but we're not nearly profitable," Smith says, adding that the portal probably won't show a profit for another two years.

In the meantime, PlanetOut could go public or be acquired. "I think the next step for PlanetOut is to find some strategic media partner," Smith notes, citing the alliances that have been forged between iVillage and NBC, and between ThirdAge Media and CBS. "PlanetOut will either become a public company or ... become a part of one of the bigger portals."

Like other athletes, Smith likes to take risks and isn't easily scared by rivals. In one of her more celebrated accomplishments, she and some fellow MIT students built a solar-powered car and raced it in Australia.

Smith sees the Internet and sites like PlanetOut as catalysts for social change: "The Internet allows a company like PlanetOut to be included with the bankers, with the VCs - to be included in the party."

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