With its bold art, high ceilings and glass-walled cages, the loft-like Georgetown offices of Magnet Interactive Group look more like the Hollywood idea of a high-tech workplace than what you'd usually see at a Washington tech firm.
Hollywood agrees, in fact. Part of the 1994 Michael Douglas-Demi Moore film "Disclosure" was shot in the building on the C&O Canal.
So perhaps it's appropriate that much of Magnet's history has been high drama, too.
In Washington technology circles, the Web design firm has gained a reputation of being a difficult place to work.
Early on, Magnet, founded in 1989, focused on the interactive CD-ROM market, which turned out to be a bust. Projects got canceled, and some tough waves of layoffs ensued. Many other people quit. By the beginning of 1999, Magnet still had a high staff turnover rate: 60 percent a year.
But six months ago, the chief executive, founder and owner of Magnet, Basel Dalloul--an art collector who often dresses in all black and brings his dog to work--hired someone to turn things around.
Robert Poulin, 40, former executive vice president of Explore Inc. of Baltimore and now Magnet's chief operating officer, was asked to shape the company up for a sale or merger.
Poulin says Magnet has been talking to several companies that might want to acquire it, and it will likely have an announcement about a sale within six weeks. He won't say who he thinks will buy, but he does say it won't be a direct competitor such as New York's Razorfish, Proxicom of Reston or AppNet of Bethesda. The sale price is likely to be in the range of $50 million to $100 million, he says.
So what did he do to turn Magnet around?
He increased the average worker's age, for one. Before Poulin arrived, the average age of an employee was 27. Now it's 31.4. That's because he's hired several older, more experienced managers, including a marketing expert, a human resources guru and a chief technology officer.
"We've added some gray-hairs," says Poulin. "Those are the hardest to recruit. They have to be excited about what we're doing and young at heart."
He's also hired more workers in general, taking the staff from 120 employees in July to 200 today. About 110 of those work in Georgetown, the rest in Los Angeles. The turnover rate has dropped to 20 percent.
Poulin also formed a partnership with Andersen Consulting, in which the two companies will bid on business together, and Magnet is now building Web sites for clients from Nissan to National Lampoon. Revenue for 1999 was about $16.5 million, and the company has been profitable for the past few months, he says.
"There comes a point in time where you have to evolve the business," says Poulin.
But he admits Magnet's past is hard to erase.
In part, that's because the good and bad times of Magnet are immortalized on www.demagnetized.org, a love-hate alumni site of former Magnet employees. They list their current jobs, at places such as America Online, Disney, Hasbro Interactive and Dreamworks. And offer up their best and worst memories. A typical worst: "The dark days of large-scale layoffs, leaving those who remained demoralized."
And the best: "The 'good old days' in '95 and early '96 when everyone worked and caroused . . . in the name of the industry enigma named Magnet." The site paints a picture of young, hard-partying, creative types who occasionally did things like jump naked into the canal. Someone called it the "University of Multimedia" and thanked the executives for encouraging entrepreneurship. Another compared it to an Aaron Spelling television show, where everyone is talented, beautiful and, well, a bit self-absorbed.
Poulin says it's a constant challenge to keep the funky, fun atmosphere while managing a business. Even explaining to some of the creative workers that an acquisition would be a good thing because it would help the company expand was met with skepticism, he says, by those who disdain the corporate life.
"I've been telling people, 'It's okay to make money,' " says Poulin.
In the online-pet-store business, it's a dog-eat-dog world.
One of the largest of the pack, Petsmart.com of Pasadena, Calif., has acquired Acmepet.com of Reston for an undisclosed amount.
The two privately owned companies plan to have links to each other's Web sites and offer members joint deals, but the sites will operate independently. Acmepet.com has a particularly talkative audience, with 37 message boards and 10 chat rooms where pet owners gab about feeding, behavior and other pet topics. There's even a pet-loss support group, free animal e-mail greeting cards, and a section to help you name your pet that includes categories such as mythological monikers and names from movies and television.
Diamondback Vision Inc. of Arlington raised some money and changed its name.
The Internet video-technology company snagged $5 million in venture funding from several firms, led by Novak Biddle Venture Partners of Reston. The other investors are CMGI, ABS Ventures, the eMedia Club and Bill Draper. As part of the financing deal, the company had to reincorporate in Delaware, and it found that someone else had already registered the original name, Diamondback Systems. Either way, the name still comes from the western diamondback snake, a symbol of growth.
As of next month, Washingtonians will be able to make real-time restaurant reservations using the Internet.
Opentable.com, based in San Francisco, already takes reservations in San Francisco, Seattle, Chicago and New York.
It has signed up 200 restaurants in eight cities so far. An early look at the sites found very short lists of restaurants, but some are already betting on the concept. Earlier this week Opentable.com said it has raised $10 million in venture funding from firms on both coasts: Impact Venture Partners of New York and Benchmark Capital of Menlo Park, Calif.
Send tips and tales of the digital capital's local people, deals and events to Shannon Henry at email@example.com.
CAPTION: Robert Poulin, Magnet Interactive Group's chief operating officer, outside the company's offices on the C&O Canal in Georgetown.