Ashton Kutcher

How Ashton Kutcher is pioneering a new kind of media business, bridging Hollywood, technology, and Madison Avenue. Really.

I've walked into the middle of a swine flu outbreak.

"Here, put this on!" Ashton Kutcher bounds from around the corner in his loft-style Hollywood office, wearing a paper face mask and holding another one. "You can choose whether to wear it or not, but we all are. We can't afford to get sick!" Within seconds, I am surrounded by a fast-moving herd of masked Flip-cam marauders, filming my every move. Perched on the stairs. Popping out from the office kitchen. Uh-oh. "Seriously!" says Kutcher, with a goofy grin around his mask. "Swine flu!" He points to the mask in my hand. Punked and defeated, I put it on. "Awesome," he laughs.

I've walked right into an episode of Katalyst HQ, a Web-based video serial that puts the staff of Kutcher's production company, Katalyst, through a loosely scripted, hopefully funny parody of its workday. The current 16-week "season" is sponsored by Hot Pockets, the savory pastry item whose creators want us to "eat freely," unencumbered by a knife and fork. (Truly. The brand manager told me that.) The program is a collaboration between Katalyst; Slide, a Web company founded by Max Levchin of PayPal fame; advertising titan Publicis Groupe; and Nestlé, which owns Hot Pockets. It has been a huge hit, with millions of reposts of the videos on Facebook, each one reaching an average of 65 friends.

"There is nothing really like this out there," says an obviously thrilled Mike Niethammer, Nestlé's group marketing manager. Niethammer, who reviews the script concepts, chuckles at the report of my punking. "I did throw out a Hot Pockets mention," I say. "Nice," he laughs.

The Katalyst HQ series illuminates what Kutcher's production company wants to become: not just a home for his television and movie projects but also a go-to source for brands looking to deploy what's called "influencer marketing," a squishy hybrid of entertainment content, advertising, and online conversation that finds its audience via video, animation, Twitter, blogs, texts, and mobile. "Entertainment, really, is a dying industry," says Kutcher. "We're a balanced social-media studio, with revenue streams from multiple sources" -- film, TV, and now digital. "For the brand stuff, we're not replacing ad agencies but working with everyone to provide content and the monetization strategies to succeed on the Web."

Kutcher, 31, is not exactly the image of a business visionary. He's still best known for his eight seasons as Michael Kelso, the pretty-boy lunkhead from That '70s Show, and as the executor of cringe-worthy celebrity pranks on the hit MTV show Punk'd. (Not to mention his marriage to Demi Moore.) But his future, Kutcher insists, will be all about business. He intends to become the first next-generation media mogul, using his own brand as a springboard. "Punk'd is part of who he is," says Sarah Ross, Katalyst's director of new media. "We're using his brand as a syndication system."

If this all seems far-fetched, hang in there. Mask off, Kutcher holds forth nonstop on his multiplatform plans. He talks of Web trending, content pirating, and the fact that Twitter has yet to make any money. "If we in this industry don't figure something out, we're going to go the way of the music industry and be cannibalized by the Web," says Kutcher. "It's really a war to make money."

It's not just talk. Some 3.9 million people follow Kutcher on Twitter (@aplusk), and he has nearly 3.3 million Facebook fans. Those numbers have helped attract corporate clients beyond Nestlé -- including Pepsi and Kellogg -- and supporters such as Oprah, Larry King, and former News Corp. No. 2 Peter Chernin.

Kutcher and his partner, Jason Goldberg, spent the better part of two years courting the wizards of Silicon Valley, converting them from teachers and skeptics to friends and allies. For all their pranks, Katalyst's digital division can claim one thing most other social-media businesses can't: profitability.

The episode I walked into has a Thanksgiving theme, and Kutcher tells me he plans to let loose a live turkey in the office. "Then everyone will be worried about bird flu!" he says. This from a future media titan? Still, even if Kutcher turns out to be more style than substance and Katalyst doesn't become the Next Big Thing, Kutcher's experiment points toward a new model for the evolving media business that connects Hollywood, tech, and Madison Avenue. No kidding.

The Flip cams have left the room. Kutcher is making the case for his business. And he can barely keep still. He begins by taking jabs at the companies that have fueled him in the social space, specifically Twitter and Facebook. And he's pretty funny about it, even if he's also sorta serious. "When I have a conversation with someone and they say, 'I'm not worried about monetization yet,' that scares the shit out of me," he says. He's poking fun at social Web companies that run up their user base without regard for how they're going to make money. "I'm part of an industry that is struggling daily. Daily. And I'm always worried about the numbers." He jumps up, turns his Cubs cap around, and tucks his legs underneath him before plopping back down. "You cannibalize this business" -- he waves at Hollywood -- "a profit-positive business that trades at a decent multiple, and you're just going to put people out of work. And these folks are counting on just figuring it out. And if they don't, we're fucked! That's not okay."

Then Kutcher does a spot-on impression of Facebook's Mark Zuckerberg: "I can sell a more-targeted individual based on the content that you want -- blah blah." He laughs at my reaction. "Fucking awesome, dude. Go do it. And make a ton of money off of that, and I'll make programming for that all day. But nobody is actually doing that."

Next rant: ad agencies. "For years, the ad business has been happy to have a completely ambiguous accounting system that they've been monetizing off," he says, referring to Nielsen ratings. "Now that the Web offers a slightly more granular dollars-and-cents audience-acquisition metric -- now they're going to get completely granular about how they're getting money?"

What the Katalyst team is planning, he says, is simple: Make entertaining stuff, give it to people where they already are, let them have some fun with it, and mix in brand messaging. And because of the viral nature of the Web, each new consumer is cheaper to win than the last one. "The algorithm is awesome," Kutcher says, sounding simultaneously sophisticated and adolescent. "Katalyst is a merger of three industries," he goes on, settling into an unexpectedly credible argument. "A piece of us is connected to ad agencies. Because we get the complex overlay of the social Web, we know how to engage an audience and how to make entertainment for the social Web. And we know how to gain and activate and retain an audience. So we create social networks for brands."

This is the way things are going, says Netscape founder Marc Andreessen. "Katalyst is way out on the leading edge in terms of thinking this stuff through," he says. Katalyst steps into the gap left by ad agencies that gave up on the Web after the dotcom bust. "Banner ads aren't going to cut it," he says. "And media companies have not been creative or aggressive about making products designed for engagement marketing. Now that's changing, giving brand advertisers a new way and reason to buy."

Garrit Schmidt, who leads the experience design and client-strategy practice for digital marketing firm Razorfish, agrees. "People are discovering that experience matters more than traditional advertising now," he notes. "Using celebrity as a personal sphere of influence is an interesting [distribution] model." Of course it's risky, Schmidt adds, because the more commercialized personalities become, the less influence they have. Kutcher acknowledges this: "I am consciously risking my career on the edge of what's too much information. Eventually, we'll open up this platform to others, just like Facebook and developers. For this to work, it has to be open."

Jason Goldberg's office is rapidly filling with toxic fumes. "Either this is a staff revolt or part of an episode of Katalyst HQ," he says, blinking and talking fast. His office floor has been covered with hundreds of Styrofoam cups, filled alternately with motor oil, red wine, vinegar, and what is rumored to be Kutcher's pee. Door closed, the stench is impressive. The evil twist: The cups are paper-clipped together, making them nearly impossible to remove efficiently and cleanly. Goldberg gingerly steps around them to take a call from his 1-year-old daughter and actress wife, Soleil Moon Frye. (I can follow her at @moonfrye, he tells me cheerfully.) "You should see what they've done to my office," he says to his wife. To me, he remarks, "You don't want to prank the prankster. I have their Social Security numbers." I smile conspiratorially, wishing I'd held on to my mask.

Goldberg comes by his pranking credentials honestly. When he and Kutcher founded Katalyst in 2000 to capitalize on Kutcher's growing '70s Show appeal, their first project was Punk'd, which lasted seven fun-filled seasons. Their pitch -- a bunch of short-form, quasi-reality-based videos -- had been kicked to the curb everywhere before MTV gave them a shot. "If I had to do itall over again, I'd take that show straight to the Web," says Goldberg. "Short form is perfect for the Web, for people who want to consume and share, but also create content."

The partners decided two years ago to get serious about understanding the Web. They took on their first investor, a New York outfit called Prime Capital, and became semi-regular Southwest Airlines commuters to the Bay Area, attending tech conferences, taking meetings, and earning the techie rite of passage: getting called out on Valleywag ("incomprehensible videos"). They debuted their first Web-only property, the gossipy animated series Blah Girls, at the annual TechCrunch 50 confab in 2008. The characters poked insidery fun at Web stalwarts like Jason Calacanis and Mark Cuban -- "the industry pit bulls," jokes Goldberg.

About a year ago, Kutcher and Goldberg persuaded Sarah Ross to join as head of digital. Ross, a Web 1.0 veteran, spent 10 years in marketing at Yahoo and has five startups under her belt. When it comes to tech, "Hollywood always misses," she says, perhaps recalling her days at Yahoo under Terry Semel. "You've got to invest the time to become part of the community, and you have to earn Web cred." While Kutcher did his best -- "Ashton would hang out and talk to engineers and bloggers who reach, like, six people," Ross notes -- she brought formidable Valley contacts: Andreessen, for one, and PayPal cofounder Levchin. "I had Max Levchin come down and speak to the group," she laughs. "The boys had no idea what he was saying, but they were riveted." Goldberg calls the event "an out-of-body experience for our crew."

The digital team's most visible success on the social Web to date is its complete and utter domination of Twitter. (Kutcher says @aplusk "is Ashton plus Katalyst. It's both." Very savvy.) Ross explains, "We decided that when we hit a certain reach and traction on Twitter with Ashton, we would test the notion of creating a social movement there." Ross consulted with Ray Chambers, a longtime friend from her Yahoo days who is also special envoy to the UN for malaria. Was there a way to use Kutcher's Twitter profile to raise awareness for the upcoming World Malaria Day? Could the effort connect people to something tangible, like a bed net to save a child?

Chambers pointed Ross to a small organization called Malaria No More, which he'd cofounded with Chernin. "When Sarah came to us, we knew it sounded cool," says Malaria No More's CEO Scott Case, a founder of Priceline.com, "but we weren't sure where it would go. We worked together to build out a framework, which we started testing in March with Ashton." It turned out to be ideal: First, it had a simple, twitterable message -- "Every 30 seconds, a kid dies of malaria. Nets save lives" -- and an affordable call to action: $10 buys a net. The goal was to drive people to Malaria No More's Web site to donate.

But the Katalyst team decided to up the ante. At that point, @aplusk had 750,000 followers on Twitter. Using Kutcher's celebrity as a lever, they unilaterally launched a race against CNN -- the next-most-popular Twitterer -- to be the first to have 1 mil-lion followers. The deadline: April 25. If Kutcher won, he promised to donate 10,000 nets and encouraged other celebrities to give too. "It would either work or I'd be out of a job," says Ross, laughing. CNN, suddenly part of the story, agreed to match Kutcher's contribution, and Anderson Cooper, Wolf Blitzer, and Larry King all gave the race airtime. Katalyst and the Malaria No More team hit the Web with videos, tweets, Facebook updates, and blog posts. "Our servers melted. We had more traffic in April than the prior 12 months combined," says Case, who consulted routinely with Chernin on strategy. "Everyone who said they'd donate did," he says, sounding very Hollywood. "Diddy, Seacrest, and Oprah -- they all were intrigued by the echo Ashton created." Final tally: nearly 90,000 nets. (Ever the closer, Case says donations can still be made at malarianomore.com.) Meanwhile, Kutcher's own strength in the social-media marketplace was assured; he has the largest Twitter following on the planet.

Malaria wasn't Katalyst's only cause. Around the same time, Ross started working with Kellogg, which was looking for a way to call attention to hunger in America and to what the company was doing to help. For Ross, it was a way to bridge the gap between civic action and big brands -- to show marketers what Katalyst could do. "We provide a content solution for them," she explains. "We can then take that content and syndicate it through social environments in ways that they couldn't buy in those social environments on their own." Like those Facebook ads that no one clicks? "Exactly," she says.

Katalyst brought in Kutcher's wife, Demi Moore (whom he dubbed "Wifey McWiferson" in a recent video), to help tilt the demographics toward women, Kellogg's target. In response to the couple's tweet streams (Moore's Twitter name is @mrskutcher), users submitted short video segments on hunger, which Moore edited into a single video. She also added a bit of news from Kellogg: "We decided to donate one day's worth of production to food banks," says Kellogg VP Kris Charles, roughly $10 million worth, some 55 million servings. The video appeared on Facebook on the Kellogg Cares fan page. "We had 200,000 fans in less than a month, and the vast majority were women over 25," says Charles. "That's the audience we want to reach. And Demi was a great fit for that."

It is Katalyst's work with Pepsi on something called DEWmocracy that may best illustrate the model Kutcher & Co. is after. The first iteration of DEWmocracy was a reasonably successful promotion: a destination site with an animated film made by actor Forest Whitaker, where fans could pick the next Mountain Dew flavor. For the second iteration, Frank Cooper, chief marketing officer for beverages for Pepsi North America, says, "We talked to lots of companies with impressive track records in the digital space." But, he says, "Katalyst had new ideas about where we could find value in the social-media space and how to mobilize large groups of people." The campaign, which runs through early 2010, lets people pick not only the flavor, name, color, and label of new sodas but eventually the in-store merchandising and the ad agency, in an online bake-off. Fans can also submit their own ads. "My theory is, you have to engage the constituency and let them be the voice of the brand," says Kutcher. "I help connect people to the Mountain Dew brand so they can be creative with it."

Cooper reports that Mountain Dew's Facebook fan page grew fivefold at the launch, but says the big win is inside Pepsi. "A lot of senior managers at consumer brands feel like their role is to control the communications around a brand," he explains. They are uncomfortable with the transparency of social media because "people will say negative things about you." What makes him happiest about DEWmocracy, he says, is "the competency we're building throughout the organization in using these new tools. It's a symbol of what's possible within brand marketing at Pepsi."

Kutcher and Goldberg acknowledge that Katalyst today is still primarily a film-production studio. And not all on that end is going swimmingly. Its most recent Kutcher vehicle,Spread, earned a pathetic $250,000 in the United States, although Kutcher says, "We made $10 million overseas, so we recouped." The Beautiful Life TV series was canceled after just two episodes, and Personal Effects, a teary drama starring Kutcher and Michelle Pfeiffer, got little U.S. distribution. For 2010, Kutcher has two major features coming out, and Katalyst is producing what the partners call an "experimental film" that could easily flop. "We're taking a big risk, but we're all about learning," says Goldberg.

Learning continues with their digital business as well. Nate Zegura, a kid out of Cleveland, was recently tapped to do a regular live fantasy-football show on the Katalyst Web channel. "Sometimes I'm on the show, sometimes I'm not," says Kutcher. "We're going to open it up -- but it's still our channel, our audience."

Kutcher bursts back into Goldberg's office, bringing in a literal breath of fresh air and a squad of Flip-cam commandos. "Dude, we've got two names for you: American D-Bag or Stuntholes." He smiles and waits. We all weigh in on the merits of the two names, without being told what they'd be used for. We're evenly split, but Kutcher is leaning toward Stuntholes. "Basically, anything with an S sound before 'holes' is going to be funny," he declares, pleased with the focus group. Kutcher looks at me over the sea of Styrofoam cups: "This is going to be really, really fun. All of it."

Fast Company.com

oakland

Changing demographics and rising gang violence have brought a dramatic increase in the number of homicides among Latinos in Oakland and San Francisco, even as the number of African American victims has fallen, police and community leaders say.

Oakland saw twice as many Latinos slain last year as in 2004, while San Francisco saw an increase of 50 percent during the same period. Authorities in both cities say the problem largely sneaked up on them because they were focused on the larger -- and still more prevalent -- problem of African Americans killing others of their own race.

"We know why it happened -- we let things get out of hand in the Fruitvale (district) because police were so busy in other parts of East Oakland and West Oakland," said City Council President Ignacio De La Fuente, who represents the Fruitvale neighborhood where teenagers Alberto Salvador Villarreal and Ever Ramos were killed last weekend in separate shootings.

The vast majority of homicide victims remain African American, and that's where police continue putting most of their resources. But even as Oakland and San Francisco saw the number of homicides among blacks dwindle last year, the number among Latinos climbed enough to push the overall number of homicides higher than in 2004, police said.

Of the 96 homicides in San Francisco last year, 15 victims were Latino, compared with 10 Latino victims out of 88 slayings in 2004. Oakland recorded 94 homicides last year with 25 Latino victims, compared with 12 out of 88 killings in 2004.

Authorities attribute the trend to changing demographics as Latinos move into neighborhoods once composed largely of African Americans. That, too, has brought an increase in violence among Latino gangs, which were once dominated by the Norteños but have seen other groups increasingly vie for turf, police said.

"We have seen a spike in crime in our neighborhood over the past couple of years and it has gotten progressively worse," said Lillian Lopez, an activist with Oakland Community Organizations. "I have a 15-year-old son, and I don't let him walk down the street because I'm so concerned about him being shot. It's horrible to have to live this way."

The trend shows no signs of abating. Two of the four homicides recorded in Oakland so far this year have involved Latino victims.

Some of the killings are crimes of passion, such as barroom fights that turn deadly. But what troubles police and community leaders is the rising number of slayings stemming from gang rivalries or instances where the victim was either mistaken for a gang member or an innocent bystander, police said.

"These Hispanic gangs call it checking," Oakland homicide Sgt. Brian Medeiros said. "They walk up or drive up and want to know what gang you're in. If you don't answer, they sometimes open fire. Or sometimes they don't bother to ask."

That was apparently the case with Ever Ramos, 17, who was killed last Sunday night just blocks from De La Fuente's home.

Ramos and two friends were walking to a convenience store near his home on Coolidge Avenue when someone in a white minivan opened fire. Ramos, who arrived from Honduras in 2004, was working as a day laborer and going to school part time to improve his English, his family said, and police said he had no gang ties.

"He appears to be a completely innocent victim," Medeiros said.

Still, his death may have been misguided retribution for the death of Alberto Salvador Villarreal, 15, of Berkeley, who was killed less than 24 hours earlier about a mile away on East 15th Street, police said. Villarreal was not a gang member, but friends said he had buddies among the Norteños.

Just before Villarreal was shot Saturday night, a passing car sprayed gunfire at two other nearby corners known as Norteño hangouts.

Historically, Norteños were the largest gang in Fruitvale. Police and community activists said other Hispanic gangs, such as the rival Sureños, have gained a foothold as Latino families have moved into East Oakland neighborhoods once predominantly African American.

"It's not just the Sureños, but there are Southside Locos and all kinds of smaller, splinter groups," De La Fuente said. "Police used to do a pretty good job of tracking these groups. But we dropped the ball."

The gang activity has grown fastest in a part of East Oakland roughly bounded by Hegenberger Road, Interstates 580 and 880 and the San Leandro border. The Latino population in this area doubled between 1990 and 2000, while the black population has dropped by one-third to one-half, according to U.S. Census Bureau figures.

In 2002, Oakland police disbanded the unit dedicated to tracking Latino gangs to focus attention on killings in the African American community, which spiked sharply that same year, De La Fuente said. The five-officer gang unit was re-formed last fall and may get more officers this month.

"It's very important to stop the killing in other parts of the city," he said. "But because we moved those officers away, we are now seeing other problems."

In San Francisco, the issue is less about changing demographics than gang violence moving beyond the Mission District into once-peaceful areas.

San Francisco Police spokesman Sgt. Neville Gittens said Saturday that the department didn't recognize the trend until late last year because five of the 15 Latino killings came in November and December. Gittens said the department is planning to devote more officers to reduce violent crime among Latino gangs.

"We're planning some targeted enforcement in the Mission and other areas, similar to what we've been doing to stem the black gang violence in the Bayview," Gittens said. "We're trying to take some people off the street before they get involved in homicides."

Gittens said the San Francisco slayings were mostly in the Mission but have spread to other parts of the city.

"Even outside the Mission, it's mostly red- and blue-related," said Gittens, referring to the colors preferred by Sureños and Norteños. "Even if the victim is not in a gang, these things happen because someone thinks he's in a gang."

Some San Francisco police officers said Norteños centered at 22nd and Bryant streets and Sureños based at 19th and Mission streets have spread their long-standing rivalry into other areas, including the Ingleside and Excelsior neighborhoods and even Bayview-Hunters Point.

"We've seen more established gang members move from the Mission into other neighborhoods," said Supervisor Gerardo Sandoval, who represents the Ingleside, Excelsior and Ocean View areas. "The main focus of the gang is still the Mission, but we've seen members -- and leaders -- move to other parts of town.

"I don't blame the cops, but I think the city is doing next to nothing about gangs outside the Mission and the Bayview."

The rise in homicides among Oakland's Latinos has decimated Martha Palacios' family. She lost a brother, Eduardo, 38, and a husband, Sergio Rodriguez, 32, last year in separate but similar unsolved killings on International Boulevard.

"I feel like there is death all around me," she said, sobbing as she cuddled her sleeping baby to her chest. "All my family is here in Oakland. But when my girl is bigger, I've got to leave. I can't stay here. It's just hurts too much."

But perhaps nowhere is the trend better exemplified than in the case of Salvador "Lucky" Moreno, who dodged death twice and is now a suspect in a homicide.

Moreno, whom investigators said is a member of the Southside Locos gang, was wounded July 24 outside a coin laundry where his friend Andres Mendoza, 17, was killed. Then on Oct. 19, Moreno was wounded again, and pal Jose L. Umanzor, 21, was killed when someone opened fire on them at Bancroft and Seminary avenues.

Then in November, police said, Moreno fatally stabbed Oscar "Dash" Avina, 17, outside a party on 98th Avenue for motives that remain unclear.

"We'd like to get Mr. Moreno in custody before someone else gets him," Medeiros said.

word.

My boss texts me that I’m 45 minutes late, my grandfather floods my inbox with chain mail featuring jokes you have to be at least 40 to appreciate, and my mother calls to correct the spelling of my Facebook status. My life is an intricate Web and a mess of wires. This technology that keeps me connected is used by a wide age range, including Generation X, Generation Y and the one to which I personally subscribe and call fondly Generation I.

Generation I is my term for the slightly self-absorbed generation at the forefront of the social media movement. Each member has an arsenal of social media tools, Facebook being the most prevalent. Not surprisingly, a study published in September 2008 by researchers at the University of Georgia found Facebook could be used as a means of gauging narcissism. In the first analysis of its kind, researchers observed that the quantity of friends and wall posts people amassed on their profiles was indicative of how narcissistic they were in daily life.

Facebook provides a rather accurate method of ego estimation because this quantity-over-quality online attitude mimics real-life behavior in which narcissists concern themselves only with how things appear to others. I am by no means condemning every one of Facebook’s 175 million users as raging egomaniacs, but the whole concept really is a transparent spectacle of self-promotion.

Facebook permits any narcissist with Internet access to assemble an army of pseudo friends, employ the help of a thesaurus in writing contemplative wall posts and upload only photos in which the subject’s nose looks almost proportionate. By controlling every aspect of one’s profile, a user can create a compelling identity similar to the one that person implements in reality, but better.

When I created my own Facebook profile, I justified it by saying it was a means of staying informed about the lives of my friends as we chased our dreams and the miles between us multiplied. Then I discovered the “info” section. Later, as I was doing the final spell check on my alphabetical lists of interests, favorite music and must-reads, it was pretty useless denying, even to myself, that Facebook is designed more as an outlet to showcase every detail of one’s life than to stay in touch with friends.

It’s this kind of blatant egocentricity, popular among members of Generation I, that has enabled Facebook to flourish. In preparation for writing this article, I spent an evening appraising my friends’ Facebooks. After a few hours of procrastination barely disguised as research, I concluded egotism isn’t just for the egotist anymore. Mark Leary, a psychologist at Duke University, told ABC News that social media such as Facebook promote narcissistic behavior, even in an unpretentious person. It seems everyone has an inner narcissist who is responsible for the Facebook status.

The status is uncontested as my favorite component of Facebook. Not only does it bestow upon users the far-too-rare opportunity to speak in third person; it allows them to habitually update their friends on the most inane details of their lives. For example, “Rachel Gaynes is writing her editorial,” or “Rachel Gaynes is making a marshmallow sandwich,” or “Rachel Gaynes is hung over and still writing her editorial.”

This isn’t, however, merely the work of the inner narcissist. The Facebook status is the result of a significant shift in thinking within Generation I. The concept of being social has adapted, now requiring that a person be eternally connected and no longer differentiate between personal and public information. Young people have accepted that sharing private information about themselves is simply a part of having friends. The advice your mother provided long ago finally makes sense: Sharing is caring.

Facebook is the embodiment of an online world in which users share secrets as if they were shaking hands. It is a strain of narcissm, but it’s far more evolved than that. We are witnessing the initiation of a modern custom of absolute exposure, a side effect of the information age. I can only imagine the ways in which this candor will continue to grow.

RACHEL GAYNES

Columbia Daily Tribune

the heiress

As the fashion-obsessed daughter of Bernard Arnault, chairman of the luxury-goods company LVMH Moet Hennessy Louis Vuitton, Delphine Arnault has long had a front-row seat at LVMH fashion shows. But last fall her father decided that the time had come for her to have a front-row seat in his LVMH business dealings too. Delphine, 28, was appointed to the board of LVMH, becoming the only woman alongside 15 men.

Delphine has undergone a quiet fashion apprenticeship over the past three years. After graduating from the London School of Economics, she worked for two years at McKinsey in Paris before joining LVMH in 2000. She learned the business with John Galliano, working on product development and marketing for his label and then switching to Dior. Now Delphine heads Dior's women's shoe division, one of the company's fastest-growing sectors. "She's got a very good sense of product, a very good eye," says Sidney Toledano, chief executive of Dior Couture, who says Delphine is treated the same as anyone else at the company. "Her father insists on that."

The Dior job takes Delphine out on the road frequently, checking in with Dior factories, ensuring that retailers are giving suitable prominence to her merchandise and trying to gauge the public's reaction to new products. People at the company who know her say she can be shy on first contact but that she's a careful observer who appears to have inherited her father's determination to get the job done.

Bringing a young and inexperienced family member onto the board of a public company can be touchy in the U.S., but in France it is common practice, and company insiders say Arnault had no qualms about it. Through a complex holding structure, the family owns 65% of the voting rights and 48% of the capital of LVMH. With Delphine, the family has three of the 16 board seats; Bernard Arnault's father Jean, 83, is the third. If Delphine can prove herself, she could be well placed to succeed her father one day. But Dad's only 54 and shows no sign of relinquishing power to anyone. --By Peter Gumbel FOR TIME MAGAZINE