Bob Guccione, Penthouse founder, dies at 79

DALLAS - Bob Guccione, who founded Penthouse magazine and created an erotic corporate empire around it, only to see it crumble as his investments soured and the world of pornography turned toward video and the Internet, died yesterday. He was 79.

A statement issued by the Guccione family says he died at Plano Specialty Hospital in Plano. His wife, April Dawn Warren Guccione, had said he had battled lung cancer for several years.

Penthouse reached the pinnacle of its popularity in September 1984, when it published nude pictures of Vanessa Williams, the first black Miss America. Williams, now a singer and actress, was forced to relinquish her crown after the release of the issue, which sold nearly 6 million copies and reportedly made $14 million.

A frustrated artist who once attended a Catholic seminary, Guccione started Penthouse in 1965 in England to subsidize his art career and was the magazine's first photographer. He introduced the magazine to the American public in 1969 at the height of the feminist movement and the sexual revolution.

Penthouse quickly posed a challenge to Hugh Hefner's Playboy by offering a mix of tabloid journalism with provocative photos of nude women, dubbed Penthouse Pets.

Guccione estimated that Penthouse earned $4 billion during his reign as publisher. He was listed in the Forbes 400 ranking of wealthiest people with a net worth of about $400 million in 1982.

Guccione built a corporate empire under the General Media Inc. umbrella that included book publishing and merchandising divisions and Viva, a magazine featuring male nudes aimed at a female audience. He also created Penthouse Forum, the pocket-size magazine that played off the success of the racy letters to the editor that began, "Dear Penthouse, I never thought I'd be writing you . . . " Guccione and longtime business collaborator Kathy Keeton, who later became his third wife, also published more mainstream fare, such as Omni magazine, which focused on science and science fiction, and Longevity, a health advice magazine. Keeton died of cancer in 1997 following surgery, but Guccione continued to list her on the Penthouse masthead as president.

Guccione lost much of his personal fortune on bad investments and risky ventures.He also lost millions on a proposed Atlantic City casino.

He never received a gambling license and construction of the casino stalled.

Legal fees further eroded his fortune. Among those who sued were televangelist Jerry Falwell, a California resort, a former Miss Wyoming and a Penthouse Pet who accused Guccione of forcing her to perform sexual favors for business colleagues.

In 1985, Guccione had to pay $45 million in delinquent taxes.

The next year, U.S. Attorney General Edwin Meese's Commission on Pornography issued a report attacking the adult entertainment industry. Guccione called the report "disgraceful" and doubted it would have any impact, but newsstands and convenience stores responded by pulling Penthouse from their magazine racks.

Circulation dropped after the Meese commission report and years later took another hit with the proliferation of X-rated videos and websites. "The future has definitely migrated to electronic media," Guccione acknowledged in a 2002 New York Times interview.

In 2003, General Media Inc. filed for bankruptcy. A private-equity investor from Florida acquired Penthouse the following year in a bankruptcy sale.

Penthouse and related properties are now owned by FriendFinder Networks Inc., a Boca Raton, Fla.-based company that offers social networking and online adult entertainment, including some with the Penthouse brand.