“In the global perspective, you’d call SonicNet niche media,” says Butterworth. “It’s just a really sweet niche.” In the future, Butterworth says, SonicNet, under the umbrella of TCI Music, will expand its revenue mix (beyond advertising) to include subscription fees and pay-per-requests at the higher-bandwidth platforms.

SonicNet got into the online music space way ahead of Rollingstone.com and MTV Online, which is one of the reasons it’s now in the position to effectively compete with such heavyweights. “They’ve got the programming expertise, the deep pockets, and the cross-media promotion,” says Mark Mooradian, a senior analyst at Jupiter Communications. “That’s what will make or break all these guys.”

THE ANGEL

‘The companies here are starving. They need capital, every one of them, and I can get them capital,” Robert Lessin said on April 2, the day after he quit his job as vice-chairman of Salomon Smith Barney to commit himself fully to Silicon Alley as its leading independent investing “angel.” Camped out in his lawyer’s office, Lessin seemed to be in slight shock. “My life was Wall Street until yesterday,” he said. Still, despite the rather dramatic career change he has just made, Lessin wasn’t converted to the Internet overnight. In the beginning of 1997, he made his first investment in a Silicon Alley start-up. “I didn’t know anything about it,” he says. “Some friends at Smith Barney recommended the deal.” Since then, Lessin has invested in about 35 companies in Silicon Alley, including CultureFinder and Medscape, with sums ranging from $100,000 to $1 million of his own money. “I don’t invest in anything that’s not Internet-related,” he says. “It’s too profound a trend to be ignored.”

If every Wall Street millionaire thought that way, Silicon Alley would now stretch from one end of Manhattan to the other. But the city’s wealthiest private investors seem to be relatively gun-shy, at least when it comes to early-stage funding. “It’s going to take some time to make that constituency feel comfortable,” says Lessin. To speed up the process a bit, he has decided to use his connections to the banking world to become an Über-consultant and -investor to young companies. “It’s amazing how little capital relative to the resources goes into this area. The West is a creator of technology, and the East is a user of that technology, and the world is shifting from the former to the latter,” says Lessin. “On the West Coast, there’s too much money chasing deals. But if you want to be a contrarian, New York is the best market in the world.”

THE CAPITALISTS

Thanks to online brokerage services like E*Trade, anyone with a little extra cash, a computer, and a modem can now buy and sell stocks with no (human) middleman, bringing the guys behind the sales desks at PaineWebber one step closer to midlife crises. But becoming an early-stage investor, or even being able to snap up some of the hot new IPO at its opening price, hasn’t quite reached the mass market -- yet.

Since last September, Wit Capital has been a co-sponsor of ten IPOs with such Wall Street giants as Lehman Brothers and Alex Brown -- ”though we haven’t cracked Morgan Stanley,” says Andy Klein, Wit Capital’s founder. For each offering, Wit posted a prospectus on its site, sent e-mail notifications to known individual investors, and took orders to buy on a first-come-first-served basis. Wit also plans to offer something it’s calling Public Venture Capital, which would consist of registered stock that would be restricted from trading for a certain amount of time. The third prong of Wit’s strategy: its Digital Stock Market, which, should it work, could be one of the strongest leveling forces in personal finance since the deregulation of broker’s fees in the seventies. Currently if you trade stock as an individual, you end up losing money on the differences in buying and selling prices (the “spread”) set by the market-makers. Large institutional traders get to match trades directly through a computerized system, thereby narrowing the spread. In the Digital Stock Market, slated to roll out this summer, buyers and sellers can meet directly online and negotiate down the spread themselves. “There’s no doubt that stocks will trade this way for small investors in the future,” says Klein. “Look at how much attention people have paid to commissions in the past year or so. The next big wave in retail consciousness is going to be the spread.”

The former chief technologist of the NYSE designed Wit’s electronic-trading system; top management includes former employees from Salomon Brothers and Merrill Lynch. And the big surprise on Wit’s list of investors? The infamous ex-head of Salomon Brothers, John Gutfreund. “The thinking is, ‘We’re all capitalists, the Internet is now a reality -- why not be on the cutting edge?’ “ Klein says of all the camaraderie.

THE AGENCY

There are Website-builders that are much cooler than Agency.com, ones that have sleek black metal office furniture and throw open-bar parties and wouldn’t dare play lite FM when they put callers on hold. But as Agency.com founders Chan Suh and Kyle Shannon know, both having started their Web life in content, cool doesn’t pay the bills. (Suh ran the Vibe Website, and Shannon founded one of the first online magazines, Urban Desires.) Not that there aren’t other Alley Website-builders -- so-called agencies -- that are making a lot of money. But with its 250 employees, $15 million in revenues, and growth of 145 percent over the past year, Agency.com is perhaps better positioned than any competitor to steamroll its way to the top. (Brand Dialogue currently leads the list at $25 million in ‘97 revenues, but the company’s growth rate is a comparatively modest 25 percent.) “They’ve got a lot of momentum, and they’re really professional,” says Bernhard Warner, who covers the industry for Adweek. “Everyone’s got gripes with even the best guys, and Agency.com has the fewest arrows pointed at it.”