Angelique is an Internet entrepreneur. She taught herself programming, runs her own site, and is concerned with how best to invest her earnings. And as part of her business plan, right now this 28-year-old French Canadian is nude and being paddled by a woman dressed in black leather. We are in a hotel-suite-turned-photo-studio at the Internet Adult 2000 convention in Miami.

Angelique is making a trade -- modeling services for photos -- with one of her competitors. She is also at the forefront in using Internet methods and technologies that will, if past trends continue, become mainstream over the next few years.

The fact is that porn often does it first. The issues and innovations of the adult-oriented Internet appear in the mainstream world 18 months later. Banners, selling clicks, hot-link referred revenue sharing -- all originated in the adult entertainment industry on the Internet. Today, Angelique's modest but very profitable site (www.angeliquexxx.com) takes full advantage of the current adult Internet industry's techniques: outsourcing, recurring billing, streaming video, and cross-links to competitors.


How can pornographers form an Internet vanguard?


Look into this new world and you find, not the decrepit, loud, excessively bejeweled, dirty-movie hucksters of stereotype, but a culture of mostly young, computer-savvy, albeit libidinous, entrepreneurs.


This world is new because little here is more than three years old. Libidinous because those who populate this culture seem to have no puritan upbringing to overcome; frolicking nude in front of others, public bisexuality, and inventive sex acts all seem to come naturally.


They inhabit a parallel Web universe with its own suppliers, its own portals, and an astonishing number of bootstrapped entrepreneurs -- even adult Internet industry veterans are amazed by the number of people, mostly couples, who have created a cottage industry business by shucking their clothes and performing sex acts on a Web cam.


But the Web-cam acts are just the top level of the industry. It's the unseen infrastructure -- business and technological -- that other Net businesses can and should learn from. UPSIDE found eight key areas from which mainstream Internet firms can learn from the online adult entertainment industry.


Cooperate and Profit
Angelique's site, like almost all adult sites, features dozens of links to other sites that are, by any measure, her competitors. The most startling business technique of the adult Net entrepreneurs is that they profit by sending customers to competitors.


At the Miami convention, I witnessed Web masters of two sizable adult sites tell each other about their sites over drinks at a bar. One suggested they should be directing traffic to each other. They went off to look at each other's sites. Back at the bar, they shook on a deal to trade links, to direct their customers to the other's Web pages. I later asked one of them what good he thought that deal would do for his business. "I figure it will make me about $50,000," he replied.


Would Ford put a Chrysler button on its Web page? Would Wal-Mart send you to Sears? They might, if Ford profited from the Chrysler sale, if Wal-Mart got a piece of the action from Sears. That is business as usual for adult-content Internet operators, and they think it will work its way into the mainstream. It isn't there yet: Even Amazon.com, a pioneer in syndicated selling on the Internet, pays referral fees for sales from incoming links, but a spokesman is adamant that it will not refer its customers to competitors.


To adult-site Web masters, however, these arrangements only make sense. If one site doesn't have what potential customers want, why leave them at a dead end?


Craig Tant, CEO of CCBill, one of the billing companies that tracks these referrals, argues, "What sense does it make to have someone search your site and get an answer, 'Sorry, no such item found'? You know you are going to lose them, so why not send them to someone with whom you have an agreement?" Amazon.com may not be ready to send people to Barnes and Noble, but the adult-content Internet folks think they should, and eventually will.


These deals, or partnership programs, can take several forms, depending on the product. The old payment-per-click system, so easy to abuse, is fading away. More common are agreements to cross-post buttons between sites and give the referring partner a flat dollar amount, or a percentage of the sale, or the first month's subscription revenue. Often there is no money directly involved, as some cross-link deals aim solely to increase traffic: Send the customer to Sears if you know Sears will recommend customers to you.


This cooperation is not just a financial technique of adult Web masters; it is part of the culture. Perhaps because they feel isolated from the mainstream, there is a moralistic sense of community here: Cheat or mistreat your models, neglect to pay your bills, put images of children on your site, or sell images that aren't yours, and other Web masters will often pull your links from their pages. It's a high-tech shunning. In the adult content Net, isolation is death.