Susan Lyne’s Digital Makeover

Susan Lyne was a pillar of the old-media establishment. In the late 1970s she served as editor of the Village Voice, which snared a Pulitzer Prize during her tenure for a story on murdered Playboy centerfold Dorothy Stratten. In the '80s, she launched Premiere magazine, pioneering a new brand of Hollywood journalism. By the mid-'90s, she had moved on to the Disney conglomerate, where she ended up in 2002 as president of ABC Entertainment. She was forced out of the troubled network two years later but not before having greenlit such hits as Desperate Housewivesand Lost. Lyne landed at Martha Stewart Living Omnimedia, running the troubled empire of domesticity while Martha served time in prison for charges related to alleged insider trading. Then, with rumors swirling that she was a top choice to head Time Inc. or Oprah's upstart cable network, Lyne abruptly changed directions. Rather than follow Tina Brown, who was launching TheDailyBeast.com, or Arianna Huffington into blogosphere, Lyne joined Gilt Groupe, a luxury e-commerce site. The site cultivates an air of exclusivity—there's currently a waiting list to become a member—and holds several online sales a day, featuring deeply discounted designer items such as a Vera Wang silk dress, which usually retails for $1,695 but was on sale at Gilt for $600. "After I left, I thought I was probably going to end up doing something more like what I had been doing," she says. "[But] I've moved on to a different platform." As her one-year anniversary approaches, Lyne sat down with NEWSWEEK's Johnnie L. Roberts in her office in Manhattan's Chelsea neighborhood, to talk about e-commerce, the battered luxury-goods market and media business she left behind. Excerpts:

Why Gilt Groupe? What's so compelling about it that you'd quit the media business?
Gilt is really next-generation e-commerce. What the e-commerce giants [Amazon, for example] really did was come in and replicate the store model online. Gilt is a very different animal. It's appointment shopping. We use the ability of the Internet to e-mail our members to get them all to come at one time and turn shopping into an event. There's a urgency involved in it that just can't exist off line. That comes in part because people know there is limited inventory and if they don't get there fast and make a decision to buy quickly then it's going to be gone. It's new every day. And there is an engagement level because you are competing against other players, right, to win whatever we're selling that day.

But don't you think the media business is going through some exciting times now, too?
The Internet is changing everything, and if I didn't understand both this new customer and understand what the Web enables that's different than what you can do on other platforms, then I'd be missing a great wave. What has really struck me over the years now is the fact that media companies have looked at the Internet as either a distraction, or in some cases a threat, but not as the giant opportunity that it is. It's challenging obviously because with the business models, the ability to monetize is not always evident. But you're never going to figure it out unless you dive in with real resources and real strategic forces and an excitement about what's possible. The best way to do that is to jump into an Internet company.

Tina Brown is doing just that at The Daily Beast with Barry Diller's backing. And there's Arianna Huffington's HuffingtonPost.com. Do you read them? Would you be pursuing something along those lines if you hadn't opted for Gilt Groupe?
I think those are both really interesting businesses. I read both. I'm on The Huffington Post a lot. Also because my daughter is there now. She's interning in the Washington office and filing six times a day. So yeah, I would absolutely be focused on such ventures if I were back in the media business.

What's the best of what they are doing? What doesn't grab you about what they are doing?
I think Tina's done something really smart with the stories you have to read today.

You mean the Cheat Sheet section?
Yes. It basically says, if you read anything, read these six or these 10 stories. If you want to be part of the conversation, read these stories. That is hugely valuable to people. We are inundated with information. I read the comments on The Huffington Post as much as I read the stories because it's that conversation. Again, that's what makes the conversation different. It's not a one-way medium, and what you do is set the table with a story, and let people go. And that is exciting. I think it has proved in an odd way one of the disses on the Internet wrong. The diss was that it was going to make people stupider because it essentially was culling things down to the lowest common denominator. But, in fact, if you read those conversations, they are informed, opinionated, and thoughtful.