Pssst ... Wanna see some skin?

As the saying goes, sex sells. And here in none-too-prudish Germany, entrepreneurs have been quick to make a Deutsche mark off of the fleshy side of life. There's hardly a train station or downtown shopping district where you can't find a clean, well-lighted "sex shop," selling whatever racy goods the heart desires.

It all goes back to Beate Rotermund -- the former Beate Uhse -- who died last month at age 82. A mild-mannered housewife in Flensburg, she broke taboos back in the 1950s, founding a successful mail-order catalogue for sex aids that grew into the famous chain of Beate Uhse erotic shops.

"A human being has two basic needs," Uhse was fond of saying. "Eating and drinking -- and sex, love, and the erotic."

She could have written a textbook for the Internet advertising sector.

It turns out that in these troubled times for online publishers, there's a tried-and-true source of advertising revenue: You guessed it.

While online ad sales as a whole are collapsing, pornographic Web sites have pumped up their ad campaigns in Germany, from 119 in the first quarter of 2001 to 689 in the second quarter, according to Internet research firm Digitale Hanse GmbH. At standard rates, that translates to ad revenue of some 12 million euros (US$11 million), up from just under 4 million euros -- though much of the advertising is paid for using cross-promotional deals rather than cash.

"It could be that the prices have dropped to the level where it's affordable for the smaller erotic content advertisers," said Arnd Klinkhart, Digitale Hanse's head of marketing and communication. "They're still within this closed circle, erotic ads on erotic sites, with very few exceptions. But we think it might lead to the placement of erotic ads on more well-known sites."

That's a lesson that isn't lost on mainstream Web content providers like T-Online International AG, the Internet subsidiary of Deutsche Telekom AG.

"You can make money with erotica," T-Online chief Thomas Holtrop told the Financial Times Deutschland last month. "It's a lucrative possibility which we are very closely analyzing for ourselves."

As well they should. It turns out Germans are among the most voracious consumers of online porn. More than 5.3 million of them visited an X-rated site in June, far more than any other European nationality, according to research company NetValue Deutschland GmbH. Germans also spend longer surfing for smut, an average of 59 minutes a month. (Their nearest competitors, the Norwegians, last for only 55 minutes).

"It's hard to say why that is," said NetValue spokeswoman Nicole Pichler. "Maybe it's because there's more of it on offer here, and it's more in the media."

But even in let-it-all-hang-out Germany there are mechanisms to protect children from hard-core material, and they've driven innovations that could help mainstream content providers make sexier profits off the Web.

In one such scheme, promoted by X-rated video producer Multi-Media-Verlag GmbH, adults visiting porn shops can buy a CD-ROM that contains an access key to a restricted Web site. They head home, pop in the disc, and get down to business. A similar system could be a revenue source for, say, news sites, Klinkhart argued, which could sell access-code CDs at newsstands.

If this all sounds too sordid for the upstanding content provider, take heart: the sleaze model has helped propel other types of new media into profitability. Years ago in Germany, says Klinkhart, porn helped seal the success of the VHS video format over competing Betamax, thanks to the ready availability of skin flicks on VHS.

So let's not be too surprised if more mainstream Web publishers starting putting on the virtual red light. It is, as one wag put it, the world's oldest business model.

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Rick Perera

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