The situation is not quite so dire as some reports have suggested: the short version is simply that, in the course of its work, Zivity managed to spawn two creations—the TopFans website and "War of the Roses" MySpace application—that were seen as, well, more immediately profitable than Zivity (we can't imagine why). Rather than watch Zivity wither away as its resources were diverted to other projects within the company, the powers that be decided to split the company in two, allowing Zivity to wither away grow at its own pace all on its own.

Porn Valley has long looked to Zivity for clues to mainstreaming: after all, if Zivity was able to managed to secure venture capital, shouldn't the rest of Porn Valley (arguably a more profitable enterprise) manage to interest mainstream money? Alas, it's not that simple: Zivity got the funds because it was a not very risque not-porn site started by Silicon Valley insiders. Very risque enterprises, started by Silicon Valley outsiders (or hey, even insiders) just have too many strikes against them to attract the VCs. But hey—given the fate of Zivity, maybe that's not so bad.

· Zivity (zivity.com)
· Amicable Split for Zivity and VC Investors (dailyfinance.com)

According to insidery Valley blog Techcrunch, the site will remain in "private beta" mode until at least 2009, but has already secured $8 million in private financing. When it does eventually go public, it will pay the models and photographers who generate the most interest based on user votes ... but not with that $8 mil. That money will come from user subscription fees, since you will have to pay to look at and vote on content.

However, as we've wondered in the past with other pay-per-view ventures, with so much free content available on the web who will open their wallets for it, especially for non-hardcore work? (Zivity's motto is "tasteful" art and beauty shots). Nude photography in particular has oversaturated the web with dozens (hundreds, really) of artistic model and photo sites giving away thousands of free pictures, so it's hard to imagine an abundance of people lining up to hand over their credit card numbers. At least, not at the level that justifies an $8 million investment.

Obviously subscription models can work. They are working for many sites that actually turn a profit. But investors aren't willing to fund those companies, because they deal in hardcore porn, not art. Which is the better business investment?

On the other hand, we don't pretend to know anything about business or the details of this particular deal—we just know porn and how much we're willing to pay for it—so maybe we'll be the ones looking foolish in the end. Perhaps we should just trust in Zivity Co-Founder Cyan Banister. After all, she's not just the Chief Strategy Officer ... she's also one of the site's first nude models. (That's her up above, courtesy of old friend Merkley.)

· No Longer Under Age: Zivity Takes $7 Million In Venture Financing For Adult Content Social Network + As Promised, Zivity Founder Does The Full Monty (techcrunch.com)
· Cyan - SkyCam (Flickr)
· Zivity : Promoting Beauty 2.0 (zivity.com)

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Previously: Porn 2.0: Haven't We Been Here Before?, The New Porn.com: When Bad Things Happen To Good Domains