The porn business doesn’t have to worry about alienating chains such as Wal-Mart and Blockbuster when they switch to a new format, another reason they’ve been able to go where the majors fear to tread. That made it easy to venture into an all-new area of distribution: the Internet. Ironically, the adult film business managed to use the Web and embrace DVDs at the same time and make both avenues work to its advantage. Even during the dial-up era in the mid-1990s, Internet porn sites were much more advanced than the e-commerce sites for major brick-and-mortar businesses, paving the trail for Webcams and streaming media.

In fact, many early porn sites with MPEG, QuickTime and WMV video files boasted quality and quicker loading times than the popular mainstream video sites of today such as YouTube. When it came to compressing audio and video files, downloading and file-sharing, the adult entertainment business was years ahead of legitimate media sites. In addition to perfecting many cutting-edge Web technologies, porn sites also devised new ways of attracting visitors and keeping them entertained with free services and user-friendly designs.

Brian Shuster is CEO of Utherverse, an adult social networking company. Shuster got his start in the adult entertainment business during the mid-1990s and says the porn sites of that era helped shape how the Web looks today.

"One of my first businesses was an online adult entertainment site," he said. "It was one of the first to feature the whole concept of a membership subscription with proper monthly billing, and we had affiliate programs, networking and the whole model that people still use today."

Schuster launched a new venture recently with Redlightcenter.com, which is sort of like an adult MMO. Patterned after the Red Light district of Amsterdam, Redlightcenter.com features dance clubs, strip clubs and other environments for people to explore with their personalized (and anatomically customizable) avatars. But that’s not all; Redlightcenter.com also acts like a social networking site and online dating service, as subscribers can meet other users, exchange profiles, and - of course - have virtual sex. "It’s a sort of ’best of Web 2.0’ that mixes the social networking aspect of the Internet with an immersive 3D virtual world," he said. "Our platform is much more advanced. If you compare it to others like Second Life, well, then there’s no comparison at all."

Redlightcenter.com combines the virtual world of MMOs with social networking, online dating services and virtual sex.