They had no idea whether a start-up that produced commu-nity Web sites for ethnic groups could attract an audience. And they were de-termined to focus on Asian-American, African-American and Hispanic-American comunities, groups that until recently had been overlooked by advertisers.

   It was tough going for a while. The six survived their first year in business on savings and $250,000 raised from family and friends. "It was just a lot of hope," re-calls Mr. Sun, the outfit's 27-year-old chief executive.

   Four years later, Community Connect has raised $20 million in venture capital, hired more than 60 employees and opened offices in San Francisco, Los Angeles and New York, where it is based. It counts Hewlett-Packard Co. and General Motors Corp. among its sponsors, and It has registered about 2.1 million users combined on its AsianAvenue.com and BlackPlan-et.com sites. Earlier this month, it launched an English-language Web site christened MiGente.com, or "my people" in Spanish, for the Latino community.

   Now, after proving that ethnic minori-ties frequent the Internet, the company faces an even bigger challenge: How will it ever turn a profit? Community Web sites, from Ivilliage Inc. and Women.com Networks Inc. to theglobe.com Inc., are all scrambling for a viable business model that will keep costs down while maximizing advertising and sponsors. That's not an easy trick, particularly in today's lean-er cyber environment.

Public Squares
   Community Web sites were among the first to populate the Internet. As instant-messaging software, chat rooms and other technology became easier to use, more and more people flocked to the sites, which took on the role of a modern public square. The problem is that users have gotten used to the idea of not paying to chat, or to read news and other information tailored to their interests.

   To bring in cash, Mr. Sun at first tried to run Community Connect as the Web equivalent of a television networkÑby at-tracting users to its "programs,' or online features, and charging advertisers accord-ingly. But the company, which is closely held, didn't pull in even $100,000 in its first year. It closed a few deals that came to "a couple of thousand dollars here and there," he recalls. At that time, advertis-ers hadn't figured out how to use the Inter-net to reach consumers, he says.

   But slowly, as the sites attracted more users, the company discovered that its strength lay in what others perceived as a weaknessÑa focus on ethnic groups. Nor did it hurt that ethnic marketing was be-ginning to blossom, Mr. Sun says. "It's a growth market, and it's something people are finally starting to understand," he says. He and his sales staff took advan-tage of the interest to pitch the benefits of advertising on AsianAvenue.com and Blackplanet.com to potential clients.

After the tech meltdown last spring, when several of Its advertisers disap-peared, the company decided to put em-phasis on sponsorships from large corpo-rations. Community Connect now has about 20 sponsorships averaging more than $100,000 each that, along with banner ads, make up the bulk of its revenue, Mr. Sun says.

   Hewlett-Packard is among its biggest sponsors. The Palo Alto, Calif., computer maker says it researched the market for sites that attracted its target base, and found that Community Connect had a record of fast growth. In July, H-P signed a six-month, $200,000 contract to sponsor a section about technology on BlackPlanet.com and hold sweepstakes for free personal computers on AsianAvenue.com. Art Price, manager of multicultural mar-keting for H-P's consumer business orga-nization in North America, says the com-pany previously advertised on portals such as Yahoo! Inc., Santa Clara, Calif., and on-line retailers including Seattle's Ama-zon.com Inc. But this is the first time H-P is funding a community Web site, he says.

"We saw that most computer compa-nies are ignoring the fastest-growing markets in the U.SÑAfrican-Americans, Asian-Americans and Hispanics," Mr. Price says. Because fewer black house-holds own home PCs than Asian-Ameri-cans, Mr. Price says, the bulk of the funds go to BlackPlanet.com in an effort to increase computer use in that market. H-P pays for "advertorials," or advertising copy presented as news articles, that describe its latest line of CD-rewritable dri-ves and other products, as well as posting polls that query where BlackPlanet.com users buy computers and electronic equip-ment.

The Competition
   According to Media Metrix Inc., a New York firm that tracks traffic on the Inter-net, BlackPlanet.com had 323,000 unique visitors in August. (A unique visitor is de-fined as a single individual who visited the Web site at least once in a given month.) By comparison, BET.com, which is owned by BET Holdings Inc., the operator of Black Entertainment Television, had 229,000 unique visitors in August, and BlackVoices.com, founded by Tribune Co., had 106,000 unique visitors. Among Web sites for Asian-Americans, Asian-Avenue.com had 70,000 unique visitors in August, compared with 68,000 for Click-2Asia Inc.'s eponymous online property.

   Nonetheless, these figures pale com-pared with other community Web sites. IVillage.com had 8.7 million unique visi-tors in August, while PlanetOut.com, a Web site aimed at gays and lesbians that is owned by PlanetOut Corp., had 596,000 unique visitors. Mr. Sun says Community Connect had fewer users than those two Web sites during the same period because its core users are underrepresented in Media Metrix's sample. Media Metrix says about 55,000 individuals throughout the U.S. participate in its sample. Looking beyond the numbers, Mr. Price of H-P says he's focusing on how BlackPlanet.com and AsianAvenue.com offer something of value to their communities. "The winning formula for BlackPlanet and AsianAvenue is to get people to rally around and talk about Issues and op-portunities," he says. And the people do talk. No topic is off-limits, whether it's the legal run-ins of pro-fessional athletes like Darryl Strawberry and Mike Tyson, or New York nightclubs owned by Korean-Americans that exclude non-Korean patrons. Says Mr. Sun: "We don't hide that there are differences for these groups. This is a great platform for people to learn about each other. And there Is a lot of curiosity out there."

   Last year, hundreds of users on AsianAvenue.com protested a print ad from liquor company Skyy Spirits LLC that featured a young Asian womanÑsqueezed into a traditional Mandarin dressÑserving a vodka drink to a Caucasian woman lounging on a towel. "It's like they [Skyy] don't see that there is a problem with the way Asians are portrayed at all," one user wrote. "Suppose everyone ignores this ad and goes away quietly," pondered anoth-er. "Skyy would have no idea that the ad was seen as offensive to many. Do we con-tinue to walk away quietly?"

Skyy says that in response to a letter it received from AsianAvenue.com and com-ments from other consumers, it pulled the ad from its campaign, which had run in magazines such as Vanity Fair and Rolling Stone. "It's a true testimony of how effective the Internet can be in really getting the Asian-American voice heard," Mr. Sun says.

And last month, AsianAvenue.com posed 10 questions to the daughter of Wen Ho Lee, the Chinese-American computer scientist at the Los Alamos National Labo-ratory who was accused of passing sensi-tive nuclear-weapons data to China's gov-ernment. Within two days of the inter-view's posting, there were 40 responses from users on the Lee case and its impact on U.S. politics.

Too Much Chat?
   But Web sites cannot live on voices alone. Some critics argue that users may be too busy chatting to pay attention to banner ads or advertorials from Communi-ty Connect's sponsors. While sites such as AsianAvenue.com and BlackPlanet.com serve a purpose by hosting public forums, "they should never expect to make moneyÑever," says Ekaterina Walsh, an analyst at Forrester Research Inc., a re-search firm in Cambridge, Mass. For a Web site to be financially successful, she says, It must have a specialty, such as financial news. She argues that targeting an ethnic, gender or age group is not a specialty. Because there are so many dif-ferent ethnic groups within the Asian-American, African-American and Latino communities, Ms. Walsh says, Community Connect is lumping everything under the sun. It would be more effective to have a Web site that revolves around an activity or interest, she suggests.

   Community Connect has yet to turn a profit, and It has yet to surpass $10 million in annual revenue, Mr. Sun says. If the company wasn't launching a site for Lati-nos, it would turn a profit in the next 12 months, he says; as It is, It should book a profit within two years. He also returns to the fact that marketers are now scram-bling to reach ethnic communities. In the past, targeting ethnicity "scared people away, he says, but "people love it now."

   Community Connect's plans include branching out into electronic commerce and online recruiting. BlackPlanet.com now features a books section that lets visi-tors read reviews of works by Octavia But-ler and other African-American writers. They can also buy books through Double-Day Direct Inc.'s Black Expressions book club. In return, Community Connect re-ceives fees for placing the ads and refer-ring customers to Black Expressions. It also plans to start a fee-based classified-ad section that it hopes will eventually make up a third of its total revenue.

   In the meantime, Community Connect says it will continue to give the audience the run of the stage. "We just let members entertain each other rather than having editors and writers churn out content," Mr. Sun says. "There's no cost to that."