David Bohnett could have retired five years ago when Yahoo Inc. paid an estimated $260 million in stock for his former company, GeoCities. Instead, Bohnett has used the proceeds for his venture capital firm and his eponymous foundation. From an office in Century City, Bohnett runs both operations simultaneously. The foundation, which is funded by a $30 million endowment, has given away $8 million to support voter registration drives, gun safety programs and gay rights. Meanwhile, Bohnett has stayed in touch with his technology roots, investing heavily in the Web portal Gay.com and storage provider Xdrive.com.
Question: Google’s initial public offering seems to have inspired new confidence in technology. Are there still doubts lingering from the crash?
Answer:
A lot of business models that people thought would come out sooner and didn’t are now just coming about. Subscription based services, all variety of e-commerce, I think it’s the continued maturation and evolution of the Web, broadband and the way people use the Internet. Google is in front and they are doing a great job, but the market opportunities are presenting themselves because of a natural development of the medium.
Q: What makes for a successful Internet-based business strategy?
A:
The future has to do with accommodating users. That’s really the key to building a successful business, watching how people use the technology and satisfying their needs based on how they want to access content and services and not the other way around. It’s a cultural thing, a philosophical thing.
Q: There seems to be an inherent conflict between the Internet, which encourages a free flow of information, and copyright holders who rightfully should be paid for their work.
A:
My concern is that if we hold on too tightly to existing business models and copyright issues, and if we don’t embrace the market opportunities the Internet provides, we’ll never get to take advantage of the opportunities the new medium provides for distributing more music and more content. It’s dangerous when you see political and legal roadblocks that limit the development of new business models.
Q: The same level of innovation that took place in the 1990s doesn’t seem to be happening today. Have we reached some kind of plateau?
A:
Innovation is happening as fast as it ever has. Sony is coming out with a device called LocationFree TV. You have a bay station where your cable and TiVo and DVD and Internet all hook up that sends information wireless to a monitor about the size of a piece of paper. Tom (Gregory, Bohnett’s significant other) and I have one at home. You hold it in your hand and you have a menu of what you want to look at. They’ve changed the delivery format to something you can hold and it makes the experience more personal. These are the areas where I think we are still continuing to evolve.
Q: Other than copyright laws, are there any other impediments to Internet innovations that concern you?
A:
A real roadblock exists in instant messaging. The fact that the government has not mandated interoperability and has allowed AOL in particular to maintain a proprietary hold over instant messaging has really hurt the evolution of new business models and new content opportunities. If you’re on AOL, you can’t send an IM to someone on Yahoo. This is where role of the government is so important. The government has the responsibility to mandate standards for the common good and the government has mandated standards for all sorts of communications media.
Q: How did you come to create GeoCities?
A:
I started GeoCities, like a lot of people at the time, with Web hosting and building Web sites for other folks. The idea was, let’s create a template, which I wrote myself, where users can create their own homepage and we’ll host it. The key was that the Web pages were organized in communities of interest.
Q: How did you come up with the name?
A:
I had flip charts with different pieces of names and I just thought the combination of Geo and Cities sounded good. Some people initially thought it was a map company. Some of the other possible names were GeoPages, CityPages, and a couple others around homepages. It just kind of ended up with GeoCities.
Q: How did Yahoo approach you?
A:
I started the company in 1994, ran it until May 1998 as CEO, then we brought in someone with a lot of experience in the publishing world, media world because our main model was selling advertising. We went public in 1998 during a time when it was a strong market and we built a strong base of advertising and e-commerce partners. I was starting to move on and do some other things and then in early 1999 there was some talk of consolidation. GeoCities had become a very valuable property to Yahoo and others because of all the traffic we were generating. It was a public company so there was an offer and a series of negotiations and the deal closed in the May 1999.
Q: What guides your gay rights work?
A:
I had a former partner who died of AIDS in 1993. He was a criminal courts judge appointed by Jerry Brown and an early gay activist. His name was Rand Schrader and he was one of the co-founders of the Gay and Lesbian Center in Hollywood. That street, where the center is located, is now called Schrader Boulevard after him. That’s what I learned from him. It’s the persistent commitment, it’s the longevity of your commitment. In some ways, I’m lucky enough to carry on a lot of the work that he had been doing.
Q: During the recent presidential election there seems to have been a push-back on issues of gay marriage and equality. Have people become less accepting of homosexuals?
A:
No, the bar always gets higher. Twenty-five years ago when I was at University of Michigan I was a volunteer at the gay student union on the gay crisis hotline. We couldn’t have dreamed about the things we would have accomplished. Gay marriage wasn’t even on the radar of possibilities. Younger (gay) people want to have families and they say, “Of course we can have kids.” Well, I never felt that way. I always felt that having a family was not an option for me. It’s the fact that the expectations of new people coming into the movement are so much higher. That has tended to bump up increasing levels of conservatism in society. Now we’re at the point where expectations are such that nothing short of full equality is acceptable. Ten to 15 years ago we just didn’t want to get kicked out of our apartments. We didn’t want to lose our jobs.
Q: What does President Bush’s re-election mean for gay rights?
A:
I think he will tend to overplay his hand. History shows that a perceived mandate is a very dangerous thing. He and his administration and those who feel they have a mandate will overreach and then the pendulum will swing the other way. Sure, it’s going to be tough but do I believe they won’t be able to help themselves to the point where people will wake up and say, “This is really mean spirited, this not what we voted for.”
Q: Yahoo is moving its entertainment division to Santa Monica to be closer to movie studios. It seems a lot of Internet-based companies are getting into entertainment.
A:
Leave Yahoo aside for a second. These days the company, be it Yahoo or otherwise, must take advantage of the fact that users are doing a number of things at once. They have the TV on in the background, the iPod turned on and are downloading music at the same time, three IM windows open and they are writing e-mail. You have somebody that is doing a number of things at the same time and the model of dedicated entertainment just doesn’t work anymore. It’s not the way people use technology and it’s not the way people live.
Q: Today Yahoo is a far different company than when it bought GeoCities.
A:
Yahoo has done an excellent job developing subscriber-based relationships with a lot of their customers through e-mail, through other premium services and Web hosting. Now with some of the music side acquisitions they have done they recognize that people do more than one thing at once. They want to be in the loop of as many of those things that people do at the same time. I think that’s the right strategy. It’s a great company and I think (Yahoo Chief Executive) Terry Semel is doing a fantastic job.
Q: West Hollywood announced it will begin broadcasting wireless broadband Internet service. Mayor James Hahn has proposed a similar initiative for L.A. Is this the start of a new municipal utility?
A:
A city provides a physical street, why not a virtual one? It makes sense that it’s something a city would do for the people who live there and the people who visit. You have to provide a way for people to get in and out of the city physically. I don’t see a difference when it comes to the Web. It’s going to shake up a lot of existing interests, but why not?
