Memo to Bill Gates: You've just wasted $26 million

The gay blogs are abuzz with the news that a capital investment firm headed by Bill Gates has rushed in to save PlanetOut, the first publicly traded LGBT media company. PlanetOut was on the verge of shutting down and the $26 million invested by Gates and Company will allow it to survive through 2008.

There was a lot of buzz about PlanetOut during the dot com boom, with optimistic talk about how the company would reach the large and lucrative Gay demographic. These days, as the company's revenue for personal ads sinks and subsidaries like "The Advocate" and their Gay cruises are tanking, they're still referring to themselves as the "go to" destination for advertisers and marketers to reach LGBT Americans.

It seems the company is still deluded with its own hype. Companies and media outlets, both big and small, that claim to have cracked the Gay demographic seem to come and go on a regular basis. I've not seen any that really "gets it".

The LGBT market is probably the most diverse on the planet - it's politically conservative, moderate, and very liberal; it's education levels are all over the map; it comes from most every profession known on the planet; it lives everywhere from big cities to small towns to isolated rural areas.

Most LGBT marketers make the mistake of trying to appeal to a fairly narrow view of what LGBT's are and are interested in, dividing the demographic into the party crowd, the suburban white picket fence relationship crowd and the political junkies. So, sites or Gay publications give LGBT's gay related political news, music and clothing that appeals to an "out proud" urban audience and lots of talk about relationships.

The sites and publications present a kind of tightly controlled LGBT community - there's not a lot of debate, there's a certain amount of apathy about the outside world and culture, and features of LGBT focuses sites are aimed at the hard sell of LGBT fashion, music, movies and the "lifestyle". There's a certain shallowness about it all - a hefty amount of downright bad writing, music and movies are foisted on LGBTs; it's material that has no distinctive qualities or interest beyond that fact that it's gay-themed. ("Brokeback Mountain" has been such a hit in the gay community simply because it's the only decently scripted, acted and directed gay-themed movie to come out in several years.)

Most LGBTs don't buy into this whole world. They might congregate in a Yahoo group around a common identity, like Bears, Leathermen or FTMs, but they're just as likely to pop up on sports forums, sites devoted to gardening, or what have you; sites that allow networking for common interests and affinities are thriving while PlanetOut is much the same as it was almost a decade ago.

I think there's potential for an enterprising start-up out there to really tap the LGBT market with a very different approach, using the social networking model as a basic structure. With my own varied interests, I keep running into people who are on several different personals or community sites from different companies or small start-ups, each focusing on a different little niche among LGBTs - there's money to be made for someone that sets up a basic structure for the LGBT demographic to express itself organically at a single site that has features that focus on its needs and interests, rather than the interests of some PlanetOut investors or marketing firms.