Can Robert Johnson bring more blacks online?

Black Entertainment Television's founder is launching a $35 million African-American portal site. Will it help mend the digital divide?

Topics: Microsoft,

So far, no black entrepreneur has joined the technology industry’s billionaire boys club. But Robert Johnson is looking for an invitation.

Johnson is the owner and chairman of Black Entertainment Television (BET), and only the second black businessman to list his company on the New York Stock Exchange. (He subsequently took the cable network private through a leveraged buy-out.) He is also a Friend-of-Bill Democratic power donor and apparently makes the A-list of technology and media titans like Bill Gates and Barry Diller, both of whose companies are backing Johnson’s latest move: a Web portal designed to draw more African-Americans to the Internet.

Johnson’s Net venture, BET.com, scheduled to launch Nov. 1, wrangled some $35 million in start-up funding from Microsoft, USA Networks, News Corp. and AT&T’s Liberty Digital. The site, a revamped version of the BET-Microsoft venture MSBET, will feature comprehensive news for the African-American community, better chat technology and a retail area catering to black consumers. (The old site was little more than a home page for BET to showcase its entertainment programs, while the new site will be a true portal, generating revenue through advertising and e-commerce.)

“The African-American online community is growing rapidly,” says an announcement on the site, “and thus there is a need for a comprehensive, relevant online product that avails existing and emerging Black and Urban users to the best the Internet has to offer.”

But wait a minute. What about NetNoir and Afronet, BlackFamilies.com and Blackvoices? A half-dozen black portals already vie for the Net’s black users — so what will Johnson’s BET.com bring to the neighborhood?

Money. With $35 million in the bank, BET.com plans to create a top-flight site, and to market the hell out of it. If BET.com succeeds in its plans, it won’t simply draw users from the sites already targeting African-Americans — it will bring a whole new black audience to the Web.



“The BET brand clearly resonates with the African-American community,” says Scott Mills, chief operating officer for BET.com. “It is recognized by over 90 percent of African-Americans.” The idea seems to be to leverage the name and promotional tie-ins with the cable network, and thereby draw more blacks online. One of Johnson’s apparent aims is to reverse the so-called “digital divide” between whites and minorities.

“The failure of any community to avail itself of the resources of the Internet will limit its ability to succeed,” Johnson told the Associated Press. “BET is bringing its media channels, content and brand resources together with those of our partners to create an online destination that will educate, enrich, empower and entertain African-Americans.”

And that is, apparently, just fine by his competitors.

“It’s great, phenomenal,” says David Ellington, co-founder and chairman of Netnoir.com. “This puts a huge spotlight on the African-American audience. [Johnson's] move has validated the market. This is the kind of respect the market needs and deserves.” Barry Cooper, founder of Blackvoices.com, agreed, saying he hopes that BET’s promotional power can help swell the number of blacks on the Internet.

Recent government research suggests that African-Americans are far less likely to be online than white Americans. “Black and Hispanic households are roughly one-third as likely to have home Internet access as households of Asian/Pacific Islander descent, and roughly two-fifths as likely as white households,” according to the U.S. Department of Commerce report.

Can Johnson and BET.com help reverse the trend?

Perhaps. The question is whether they can do so without wreaking havoc on the African-American sites that pioneered the black community space. Though they have deeper histories on the Net, none can compete with BET for name recognition or for assets that would enable them to add bells and whistles to their sites or create big marketing campaigns.

Johnson has learned well how to dominate a market, with Black Entertainment Television, which started off as a small cable company showing little more than old movies with an all-black cast for two hours per week in 1980, and became a hugely popular around-the-clock network. And it sounds as if he has similar designs on the Internet. “We are going to brand the Internet, much the way we branded cable some 16 years ago,” Johnson said in a 1997 Washington Post Magazine story.

But BET.com says it won’t muscle out the competition. “It’s not our goal, and even if it was our goal, we think it can’t be achieved,” says Mills, the COO. “Our goal is simply to be the best.”

Still, it’s hard to disregard BET’s status in the cable world. While there are many black-owned magazines, radio stations, even several black-owned movie production companies, no other black-owned cable entity has sprung up in the 20 or so years since the birth of BET. “There are serious barriers to entry in the cable industry,” says Mills. These serious barriers presumably exist for whites as they do for blacks; yet we have dozens of white-owned cable companies and only one black-owned cable network.

Could Johnson and BET.com come to dominate the African-American portal space in the same way? Already, the company has attracted the largest investment in a black-owned Internet company ever — and brags about it. “Thirty-five million dollars, which is a bunch of cash. And all cash,” says Mills. “It was a significant amount of capital to fund our start-up.” Other African-American-oriented Web portals beat the bushes for years trying to attract major venture capital money, and some have found that it has only been with the entry of BET that deep-pocketed investors took notice of their sites. Ellington says that BET’s announcement instantly tripled Netnoir’s valuation.

With money to fund both content and marketing and its connections in the cable TV industry, BET.com has the potential to lock onto a lot of advertising dollars. Could other black-oriented Web sites be squeezed out by a new mega-player?

“It will never happen.,” says Willie Atterbery, Chairman and CEO of Afronet.com. “The Internet is too big, is growing too much, for any one site to offer everything that an African-American consumer would want.”

Besides, BET is a little late to the African-American market online. Both Netnoir and Blackvoices have been on the Web for about five years; they have developed loyal followings and know a thing or two about doing business on the Internet. Cooper says, “We’ve learned about our customers, about the Internet, and what advertisers want. Our history gives us an important head start on others who are just coming into cyberspace.”

Johnson may be new to the Net, but he is well aware of its opportunities; he says that he wants to take BET.com public. “To the extent that there is an opportunity with an IPO,” says Mills, “then we would pursue that opportunity to access Internet currency and to leverage and acquire more properties.” In the meantime, none of his competitors sound too concerned.

Ellington, of Netnoir, says, “There is a big enough market out there. When BET does marketing, Netnoir is one click away. And vice versa. This validates my work over the last five years. There’s going to be a Hertz and an Avis. And they both will make a lot of money.”

Raymond Rawlinson is a writer in the District of Columbia.

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