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Smack in the middle of one of those bleak, forgotten warehouse blocks on the far West Side of Manhattan, 601 W. 26th St. is a frightening space. Surly men with picket signs stand out front, protesting non-union contracting work going on inside. The ceiling of what passes for the lobby is ripped open, revealing a hallway that seems to lead to nowhere. Construction workers and painters are everywhere, their clothes covered with debris.

But up on the 13th floor, in the airy offices of Internet company Screaming Media, it's a beehive. A racially diverse and largely young group of people, dressed in standard-issue downtown threads of black and gray, huddles around flat-screen computers. Phones chirp constantly, the low bass of hip-hop music keeps pulse and everyone seems to be in motion.

Knowing observers say it's reminiscent of what used to take place in an ad agency down on lower Fifth Avenue a decade ago. These days, the kids call this kind of buzz 24/7; back then, young writers and art directors had their own name for it: "Chiat Night & Day."

Seems Jay Chiat is once again in his element. As the newly named chairman of Screaming Media, one of advertising's last great visionaries is now a new-media maven.

LEGENDARY INNOVATOR

The list of his innovations in the agency business are legend. Mr. Chiat brought account planning to the U.S. His agency, Chiat/Day, turned the Super Bowl into an annual championship bout for TV commercial supremacy with its "1984" spot for Apple Computer. His personal fascination with art, architecture and technology resulted in breathtaking accomplishments like the agency's Frank Gehry-designed headquarters in Venice, Calif., but also brought on the ill-fated "virtual office" concept.

So what's a guy like him doing at a cutting edge-company like Screaming Media?

"I think I can still contribute something," the 67-year-old Mr. Chiat says almost sheepishly. "I can provoke, and push for executional excellence."

Mr. Chiat also sees his role as to manage rampant, almost out-of-control, growth. He was the 10th person to join what was then called Interactive Connection, a company that now has grown to more than 100 employees, "and we'll soon have 200," he explains. "I think I can help in this area."

Screaming Media repackages and syndicates editorial material from a number of top media outlets, selling it to various Web sites on a targeted basis. They call themselves "aggregators" -- "It's a kind of one-stop opportunity for a small Web site to have access to very big and successful content providers," Mr. Chiat says.

GOLFING AND INVESTING

After selling Chiat/Day to Omnicom Group in 1995, Mr. Chiat spent time playing golf and investing in Internet companies. One was CyberGold, a service that paid consumers to read banner ads; Interactive Connection was another. From initially acting as an adviser, he became steadily more involved with the latter, finally moving in as interim CEO about a year ago.

Since then, Mr. Chiat has helped raise additional backing, conducted an agency search -- eventually hiring New York boutique Mad Dogs & Englishmen -- and spearheaded the search for a full-time CEO. Now that one has been found (Kevin Clark, a former Poppe Tyson executive who, like Mr. Chiat, was an investor and served on the board, took the post a month ago), Mr. Chiat has taken the title of chairman and says he intends to stick around for another year or so.

Some of Mr. Chiat's former agency colleagues think he's found a natural setting for his particular strengths.

"He's a boundless, enthusiastic guy who's constantly trying new things," says Bob Kuperman, president-CEO of the Americas for TBWA Worldwide. "This is just another. And, like most things Jay gets involved in, it'll be a success."

"Jay is restless for the new, and he's an inveterate entrepreneur," says Marty Cooke, former creative director of Chiat/Day in New York and now executive creative director at M&C Saatchi's New York office. "The status quo drives him nuts."

OPENING CONSUMERS' MINDS

"Look at what Jay has done in his career," adds Bill Hamilton, worldwide creative director for J. Walter Thompson Co. and a 10-year veteran of Chiat/Day in both its California and New York offices. "He has an innate sense of what opens consumers' minds and how to overcome their resistance."

Oddly enough, resistance to the new is what Mr. Chiat felt when he tried to get ad people interested in interactive technology and its immense potential to change society. "My own experience at Chiat/Day was, I couldn't get anybody in the agency except a small group of MIS people to see how big the Internet was," he recalls.

As for how well the agency community has responded to the sudden growth of the Web, he sounds unimpressed. "I don't think agencies recognized that it was really as big as it was, and going to get bigger."

PLAYING CATCH-UP

Now, in his opinion, they're stuck playing catch-up, but they still face problems of culture and training, particularly from the creative side.

"There's a process that you go through," he says about making ads, and working in the Web world simply isn't the same. Everything is different, from understanding your consumer to how you present the work to what the work actually is.

"You have to redefine everything that you've learned, and have become a star at doing," he adds.

Indeed, the work is at the heart of the major differences between what he's doing now and what he did during his storied agency career.

At Chiat/Day, he says, "We made the work highly visible, because, by the same token that you want to attract clients who would allow us to do great work, we didn't want to attract clients that would destroy the quality of the work." In the Internet world, "You can't really display the work here, and attract clients that way," he says.

There's also the issue of speed.

"It's a factor of 10," he says of its increased pace over even what he experienced at his own shop.

Does Mr. Chiat miss the agency business?

"No, not at all," he responds, emphatically shaking his head. "I miss the people, because they're really smart people. And I had a marvelous opportunity. But the difference between having to gain approval from a client on something you passionately believe in and being able to make the decisions yourself, and rise and fall on them, is a really big difference."

NOT EVERYONE'S BUYING

While you can't fault the desire to be master of one's own domain, not everyone buys Mr. Chiat's comments about not missing the agency game.

"I think he does," says Mr. Kuperman. "He still calls me up and yells at me." What for? "The usual stuff, the stuff he always yelled at me for." Mr. Kuperman notes that Mr. Chiat "takes great pride in the success Lee [Clow] and I are having," referring to the current TBWA Worldwide chairman and chief creative. Still, "That's how I could always tell if Jay cared about something or not -- if he stopped yelling, you were in trouble."

Has he ever wanted to distance himself from his famous quote about wanting to see how big Chiat/Day could get before it got bad? Not at all, Mr. Chiat answers.

"I think it's an incredibly solid business philosophy, if you're interested in other things besides just making money or getting big," he says. "If you don't have the concept of excellence, then why bother doing what you're doing? Do you want to build another mediocre company?"

Asked his assessment of how his old shop is doing, he jokes: "Unfortunately, they're doing much better than when I was there. I've taken that to heart and I'm really depressed about it.

"No, I think they're doing great," he continues. "I look at some of the work they've been doing lately and it's as good as work they've ever done. And I think that's great, because it proves that they haven't gotten that big yet -- to get bad. They're still capable of doing brilliant work."

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