Rich geeks in paradise

(Fortune Magazine) -- I'm sailing on a Hobie Cat with Richard Branson along the shore of Necker Island, his private enclave about a mile from Virgin Gorda in the British Virgin Islands. The Virgin Islands aren't actually a part of Virgin Group, the conglomerate he founded, but sometimes it's easy to make that mistake.

Dead ahead is a small sandbar. Incongruously sticking up from it, out in the middle of the turquoise Caribbean Sea, are three perfect palm trees - obviously planted. "I got the idea from the Windows screen saver," says Branson in his genial way. "And that's about the extent of my use of the Internet."

Branson at home on Necker Island

Pre-lunch sailing

Lunch with Branson

Pre-dinner faux sumo wrestling

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I was on the island for a technology conference, Branson-style. Here, unlike innumerable tech conclaves I've attended, I didn't get a tote bag, a logo fleece jacket or even one of those little computer memory fobs. What I did get was a better understanding of Internet media. And three broken ribs. (Waterskiing. Oops.)

The three-day get-together was the brainchild of two New Yorkers, Jerry Murdock, a hyperconnected venture capitalist, and Mike Abbott, a money manager who is chummy with Branson. Their idea was to bring the Virgin chairman together with some of the hottest young Internet players, just to see what would happen.

The lure, apart from hanging out with Branson - billionaire impresario of media, retail, airlines and numerous other industries - was the island itself, which under his 25-year ownership has flourished as a haven for sybarites. (Branson rents it out when he's not there for $43,000 a day, complete with rooms for 26 guests and a staff of 50, including two masseuses and a world-class chef.)

In attendance were the CEOs of Active.com, an online community and information site for athletes; Break.com, a video site for young men; CollegeHumor.com, a comedy site just purchased by Barry Diller's Interactive Corp (Charts).; DeviantART.com, a community for artists; DivX, which creates software and tools for video and Global Gaming League, an online community for gamers.

Branson brought in executives from his newly formed Virgin Galactic, which is planning to put tourists into space by 2008. From big old media came Jeremy Philips, a top strategist for News Corp. (Charts)

Keeping out of the photographs I kept taking were a couple of big investors who value their privacy. We totaled about 30 people, significant others included.

The old and new moguls got along swimmingly. One day at lunch - at an immense table on the beach - Chris Sacca, Google's (Charts) head of special initiatives, was bragging to News Corp.'s Philips about Silicon Valley's egalitarian and open-minded business culture.

"Hell," said Sacca, "half our company goes to Burning Man every year!" At that, Jordan Greenhall, CEO of DivX, leaned forward and said, "Dude, how can that be true? Your company has 10,000 people!"

Like Branson, most of the twentysomething Web CEOs play as hard as they work. Everything is a competition. In addition to the inevitable tennis and wakeboarding, there was a beach Olympics, including races with a flipper on one foot.

For a sailboat race around the island, Branson decreed that the winner must also kidnap a female crew member from one of the other boats. The next day Branson's boat was behind, so he had a staff motorboat pull him first to the finish line. From that DeviantART.com CEO Angelo Sotira, 25, learned something: "The moral is do what it takes to win, within the borders of good spirits. And reason."

Branson, who doesn't have any substantial Internet businesses, listened attentively for an hour one evening while each of the tech people summarized what he thought was important now about the Internet. Summary version: To be a media company online is to be a community company, empowering the users who create content.

Late the following night, hanging around the bar as a gorgeous woman danced energetically with a pillar, I asked a pair of young hotshots what they'd learned from Branson. "Richard says that your brand is your product, so just focus on your product," said CollegeHumor.com's Josh Abramson, another 25-year-old junior mogul. "I think he also said to make sure your product isn't 'rubbish.' "

For this crowd, short online videos are the default entertainment medium. We spent considerable time clustered around PCs watching YouTube and Break.com, hoping the island's fitful satellite Net connection wouldn't quit mid-video.

Most popular of the week: a now infamous clip of a UCLA student being Tasered. Everybody also wanted to watch the Web hit MsDewey.com, because its star, Janina Gavankar, was among us (she's Sotira's girlfriend).

The climax of the three days was a spectacular dinner on the beach, with 1949-vintage wine. Before we ate, two combatants climbed into specially padded suits for a staple of Necker competition - a faux sumo match.

My whole time on Necker, I was struck by how gracious, upbeat and generous Branson was with all the interlopers on his island. He's got a knack for striking up a cheerful conversation with anyone about anything - technology, food, sports, indigenous birds.

At one point I mentioned my impressions of our host to News Corp.'s Philips, who works closely with Rupert Murdoch. "That's something I've noticed about these moguls," he replied. "They're almost always the most optimistic person in the room."

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Branson's next big bet