The Black Internet Gold Rush That Wiped Away $75 Million in 18 Months
It wasn’t just Pets.com and eToys — 20 years ago, a slew of hip-hop and ‘urban’ sites became early casualties of the first dot-com bubble
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At the very end, Adam Kidron needed a multimillion-dollar loan just to pay severance to the people he was laying off. Some of his employees at Urban Box Office, the company he had co-founded, had to be taught how to apply for unemployment. They were kids, really; many had never had a real job. “I was a twentysomething high school graduate from the Bronx,” says Steven Samuel. “UBO paid me six figures. It was about our worth, not our formal education.” Kidron even made sure all the content creators retained the rights to anything they did at UBO. But riddled with tech issues and mismanagement, UBO couldn’t realize its egalitarian dream.
It wasn’t alone. Between 1999 and 2001, with the greater dot-com era just beginning to spiral, hip-hop and “urban” websites and startups proliferated, flush with investment cash. Hip-hop impresario Russell Simmons, riding high in his Phat Farm/Baby Phat fashion heyday, staked his digital claim with media company RS1, later named 360HipHop. (“The site will utilize a multi-media approach to deliver content, providing the user with the latest in hip-hop trends and information, as well as connect users, and hip-hop celebrities/personalities, in a virtual hip-hop nation,” wrote one breathless article in 2000. “Especially interesting will be interactive sites devoted to ‘Puffy’s Gun Collection’ and ‘Snoop Dogg’s Greatest Spliffs.’”) Sony Music Entertainment and Universal Music Group both invested.
The finance world even got in on the founding. Investment banker Charles “Chas” Walker and his business partner Peter Griffith launched “netcaster” Hookt, later partnering with Sean “Puffy” Combs in hopes of leveraging the Bad Boy/Sean John impresario’s supernova profile. HBO launched Volume, a site that leaned heavily into video content and that many expected to spin into an MTV competitor.
And one by one, they all unceremoniously shuttered.
Just as with the larger dot-com bubble, the causes of death were many. Gross mismanagement. Bloated salaries. Unchecked spending. Buggy site design that ignored the fact that most users were accessing the internet by dial-up modem.
By now, the boom and bust is 20 years in the rearview. Media has had multiple other reckonings since then, from the recession that killed dozens of magazines in 2008 and 2009 to the recent closures and layoffs happening across digital journalism. And most of the major players involved in those early years have recovered and moved on to high-profile media careers. But the lessons, the facepalms, and the “WTF?!” moments remain fresh. When something sounds too good to be true? It probably is.
I. THE GENESIS
Starting in the mid-90s, a bull market turned into a frenzy of opportunity: any idea with a dot-com suffix attached could get millions in a single round of funding, and then more rounds when that was spent — even when you had nothing to show for it. Sites and startups flocking to the still-young internet attracted trillions of dollars in investments. And hip-hop wanted in.
Adam Kidron (co-founder, Urban Box Office): I was supposed to have dinner with Clarence Avant one night — who was a legend, of course — but when I showed up to the penthouse, there was only one person there. He said, “it’s just me and you. I’m George Jackson.” I knew he had done Krush Groove and New Jack City. We ended up taking a walk, and we realized we had so many similar interests and outlook on life. From the outside, we couldn’t look any more different. But inside, we were the same. From that first day, we were inseparable.
Ntianu Eastmond (executive producer, UBO): There was a crew of us, Black women, who had all gone to The New School; one by one, many of us ended up interning at VIBE. Some of us moved out of journalism, but some stayed. One writer, Charlotte Smith, ended up at UBO and told me about it.
Adam Kidron: George and I did a few projects together. But then he got the job at Motown. (Jackson was appointed president and CEO of Motown Records in 1998) I said to him, “George, I’m sick of working for other people. Let’s go do something for ourselves.” George said, “Well how are we supposed to do that?” I said, “we’re going to have to raise some money.” We went out, raised a bit of money and got an office inside of a garage at Chelsea Piers. I sit down on the first day and notice a sticker on the wall. It said, “If you can read this sticker, it means you’re going to get lead poisoning.”
“The way UBO was hiring people was like building a boat as people get on.”
Ntianu Eastmond: I interviewed with both George and Adam, which was so weird. They were actual grown-ups. I have never, before or since, walked into an environment where you interview with an actual grown-up.
Steven Samuel (co-founder, SOHH): The way UBO was hiring people was like building a boat as people get on.
Karu F. Daniels (entertainment news producer, Volume): I’m in my early twenties. I’ve already written for The Source and VIBE and other places. I got a signing bonus, doubled my salary, and had my own office. It was very cute. We had to work, of course. But yeah, it was cute.
Chuck Creekmur (news assistant, Volume): I had just recently launched AllHipHop and we were still grinding, going to everything. I was at a press day for Queen Latifah and I met this guy Karu Daniels. A few weeks after the event, he told me he was starting at this new place called Volume. It was backed by HBO. There wasn’t a lot of money but there was a space for me if I was interested.
Serena Kim (associate editor, 360HipHop): I was working at Notorious, which was Puffy’s magazine, and interviewing to be an associate editor at The Source. I go on a million interviews over there, and then [editor-in-chief] Selwyn leaves.
Selwyn Seyfu Hinds (editor-in-chief, 360HipHop): Leaving The Source [after months of tension with Source owner Dave Mays and his friend Ray “Benzino” Scott] was like a breakup. You pack your stuff over time. Wait for the right moment. So, there was an argument one day. I may or may not have thrown a chair at a wall. And at that point, I knew I was going to have to go. But I wasn’t going to just walk out and leave my staff. So for the next few months, I took meetings and thought about my next step.
Chuck Creekmur: Earlier in AllHipHop’s history, there was some talk of Russell Simmons and Lyor Cohen and Kevin Liles wanting to acquire a substantial piece of the site. It was a deal we quickly turned down. They didn’t respect us enough, compared to these other sites that were being funded. I just don’t think we were the cool kids like some of these sites with bigger names. But we had hit a sweet spot from a revenue and staffing point of view. So we held on.
Larry Hester, aka The Blackspot (editor-in-chief, Hookt): I was at XXL when the investors started coming around, talking about creating sites, about people retiring at 23 and having all these stock options. So yeah, we all wanted to get in on that. Investors were just throwing money around.
Selwyn Seyfu Hinds: Pretty much all the sites had come to me to talk about running their editorial teams. That’s not boastful. It’s just where I was in my career, running The Source, and the relationships I had. It makes sense.
Datwon Thomas (executive editor, Hookt): XXL was a dream job. I was so happy to be there. I was a kid who dropped out of college, got an internship at VIBE, and got hired at XXL — but XXL wasn’t paying anything. My name was starting to ring bells, but that wasn’t going to get me out of my grandmother’s apartment in Brooklyn.
Blackspot: I’ve always had a love for the digital space, going back to Vibe Online in the mid-90s. That was my specialty. But I wasn’t savvy enough on the back end to start my own thing. It was also expensive to start these things up. There was no Wordpress — this is straight-up HTML, and you have to design everything from scratch.
“Like, sometimes I would look up from my desk and around the space and just think, I can’t believe this. This is the team I work for? This is the ’27 Yankees!”
Selwyn Seyfu Hinds: I’m close to deciding to go with Russell’s site. He has an event at his apartment for Hillary Clinton. All the bigwigs are there. At the end of the event, I’m about to leave, and I see Puff of all people. He says, “I’ll drive you home, I need to talk to you.” So we hop in the — I think it was a Navigator — and he pitches me on not going to 360HipHop. He wants me to run a site he’d just invested in called hookt.com. I turned him down nicely. But now I’m realizing how competitive this space is going to be. Puff is trying to poach me away from Russell — in Russell’s house? I didn’t even start yet! [laughs]
Datwon Thomas: Reggie from Iced Media told us that these guys running a new hip-hop website were looking to staff up. It was [Hookt co-founders] Peter Griffith and Chas Walker. I’d worked with Black twice already, so the idea of working with him again was appealing.
Jon Caramanica (assistant editor, 360HipHop): I was literally working with all my journalism heroes. I’m now working with Selwyn Seyfu Hinds, who ran The Source. I’m working with Sheena Lester, who ran XXL. There’s kris ex, Serena Kim, Jazzbo, Jeff Chang. Like, sometimes I would look up from my desk and around the space and just think, I can’t believe this. This is the team I work for? This is the ’27 Yankees!
Paul Estevez (Marketing Director, UBO): I had started out at [clothing brand] Willie Esco. But I had a falling out with one of the backers over a handshake deal. I’m thinking on my next move, and my best friend Tony Martinez and his business partner are starting up latinflavor.com. It sounds interesting. But I’m like, where’s the funding? They say, “it’s under UBO.” This is 1999.
Adam Kidron: We wanted to build a platform that was really diverse and really multiracial and multicultural and we wanted to do it by respecting the creators. And we wanted to find a way of making it financially viable because we didn’t want to be vulnerable to the ever-changing mood of venture capitalists.
