Interview With Geraldine Laybourne

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G.L.: I know. He did fine. And he was a great investor. He invested in three separate rounds.

L.G.: And had AOL in there.

G.L.: [AOL executive] Bob Pittman was one of the first people to really give us support, and he contributed three websites. And we had [AOL executive] Barry Schuler on our board, who is a fabulous guy. It was an interesting beginning, because our intent was to be the first converged network. And we had this vision of using the internet and television and building it right from the beginning. And now some of our ideas seem more reasonable. At the time, they were kind of shocking to people. Investors at the time, in late '98, only wanted to invest in new-media companies. So they were very skeptical. They weren't very enthusiastic about doing a television network.

L.G.: Right. So you felt you had to have the internet piece.

G.L.: Well, I was excited about the internet. And my partners, Carsey-Werner, were excited about having a television network. So it was kind of perfect.

L.G.: What was Oprah excited about?

G.L.: She was excited about the idea that women were going to own and operate a television network. She was an investor right until the end. She was more actively involved from the very beginning. And that was when Oprah didn't have a magazine, when Oprah didn't have an empire, when Oprah only had a daily talk show. And her choices about how she's going to spend her time are exactly right. She had this empire to run. She had schools in Africa to build. So she decided to just stay on as an investor.... Everybody stayed in-no, that's not true. One company, LVMH [the French holding company for Louis Vuitton and other luxury brands], got out when we changed strategy from being an internet company to a television company.

L.G.: When did that happen?

G.L.: The end of 2001. Around that time, it was just clear that you could not make money as a content company on the internet. And we had raised a certain amount of money, and we needed to find a way to get to profitability. And so we relied on what we knew how to do-which was to create a television network that could get profitable. We were profitable by the end of 2004. And so, you know, it was very painful for me. We hired 700 people in one year, and that is too hard to do when you're a small company. And in the first set of layoffs, you can kind of figure out, we'll just get rid of the problems. Then, as you go on and you're letting go of more people-one of the toughest things for me was letting go of a high-performance team in San Francisco, the Thrive Group. The greatest people in the world. They did everything we asked and more. They achieved everything that we asked and more.

L.G.: What were they doing for you?

G.L.: They ran a site called ThriveOnline, when it was an integrated health site. And they loved the brand. They were dedicated people. They were fun to work with. They had a real team. But there was no economic model for it. Now, of course, there is. And you kind of wish, Oh man, could we have just hung in there? But I think we made the right decision.

L.G.: When you started this out, what were the broadband capabilities like? Could you watch television on the internet very easily?

G.L.: People had dialup. We did some great creative. We really did. We did a thing called The Ruth Truth. Juliana Tatlock produced that—avant-garde, wonderful stuff. Deep Creek used that silhouette animation that iPod has now made famous. But this was way before the iPod thing, and we tried. However, we could use flash animation to make it interesting-looking but not kill the speeds. So anyway, it was a very exciting time in the earlier days. And then we had to contract, and we had to be focused.

L.G.: And you had what, 200 people?

G.L.: Two hundred fifty. And we had a nice, profitable business.

L.G.: I've seen where you've said that if you had it to do all over again, No. 1, you would have done it in secret, right? You would have launched in secret-maybe a softer launch?

G.L.: Usually I say, if you get a choice to do it the way we did with Nickelodeon, where nobody knew anything about what we were doing, or the way we did it with Oxygen, do it the Nickelodeon way. But honest to God, we didn't have any choice. You know, once you get Oprah Winfrey involved in something that you're doing, you just lose control. We hardly ever granted interviews, but we were raising money. We needed publicity.

L.G.: Obviously, this was when the internet boom was happening, and people were talking about conservative valuations of the company being $1.5 billion before it even started producing anything.

G.L.: Well, look at where we are today.

L.G.: Almost a billion.

G.L.: Yeah, but look at what's happened in the world of entertainment. And look at the value of Google. And look at the value of Facebook. What is it worth—more than Ford Motor Co.?

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