Internet Porn King Planning Stock Offer -- Company's Ipo Pitch: It Actually Turns A Profit

Leave it to the online porn king to have the nerve to court Wall Street at a time like this.

Seattle-based Internet Entertainment Group (IEG) is planning to sell stock to the public sometime in the first six months of 1999, said President Seth Warshavsky in an interview yesterday.

IEG may sound innocuous enough; it's better known by its identities on the World Wide Web - Club Love, Flirtual Reality and Centerfold Strip Club.

The Seattle Internet porn empire, nurtured by Warshavsky, 25, is bucking the trend of companies scared off by Wall Street's recent dips and dives and staying on track with a plan to let the public in on a piece of the action.

One reason for IEG's confidence is that it bucks the trend in other ways. The Internet company, unlike many online content sites, is making a profit. The company expects a profit of about $15 million this year on sales of $50 million, Warshavsky said. IEG employs 150 people, mostly in its Seattle office.

Warshavsky declined to disclose the names of the investment-banking companies he's talking with about a public offering. But he said he hopes to raise from $25 million to $50 million.

In the past few years, Wall Street has seemed to have a wild lust for Internet stocks, pushing up the price for publicly traded companies that were losing millions. But that obsession has cooled lately, and Internet companies have been watching their stocks jump and dip from day to day.

It's tough to predict how the market would react to the IPO, said Don Gher, chief investment officer with Coldstream Capital Management. Gher, who emphasized that he was not familiar with the company, said the climate has changed dramatically.

It used to be that "all you had to do was put down `com' at the end of something and it sold," he said. "The market is psychologically driven and psychologically we had a big change."

This summer, IEG launched a Web site that combines its core competency - pictures of nude women - with delivering stock quotes. Sexquotes.com has attracted a higher-than-expected number of visitors, said Derek Newman, IEG's general counsel.