Playboy Plans IPO For Dot-Com Unit

Playboy Enterprises Inc. has filed documents with the
Securities and Exchange Commission to spin off its Internet business with an
initial public offering worth $50 million.

Playboy said it will use the proceeds from the offering to
enhance and expand its Web sites -- including the creation of original content -- to
pursue electronic-commerce opportunities, to increase its sales and marketing activities
and to explore potential acquisitions. did not reveal how many shares it would offer
to the public, when it would start the IPO or at what price the shares would be offered.
Those details are expected in future SEC filings.

Playboy Enterprises stock ticked up Jan. 12 to $28.13 per
share. will be headed by current Playboy Enterprises
chairman and CEO Christie Hefner.

Playboy is coming off an aggressive year during which it
purchased rival adult-entertainment pay-per-view provider Spice Networks for $100 million
in cash and stock.

According to the prospectus, includes Playboy
Cyber Club -- a subscription-based service with more than 37,000 subscribers -- as well as
CyberSpice and other adult-oriented Internet sites. The company said that for the month of
November, Playboy Web sites had more than 100,000 page views and 16 million visits. had revenue of $6.7 million for the first nine
months of fiscal-year 1999, 76 percent higher than sales in the same period in 1998. But
the unit reported losses of $7.2 million, or 29 cents per share, during the nine-month
period, up from a deficit of $4.6 million (18 cents) in 1998.

Playboy Enterprises fared much better, increasing its
earnings before interest, taxes, depreciation and amortization by nearly seven times in
the first nine months of 1999 to $31.2 million from $4.5 million in the same period in

Revenue at the company -- which includes its
cable-television channels and publishing units -- increased to $104.4 million from $75.7
million, and the company reported net income of $5.3 million compared with a loss of $2.7
million in 1998.

Managing underwriters are Credit Suisse First Boston, Bear
Stearns & Co. and Banc of America Securities LLC.