THE CEREMONY TOOK place in the Masonic Auditorium in San Francisco, located on top of Nob Hill, one of the most expensive neighborhoods in the city. When we arrived, a large crowd was already milling in front of the hall. Acrobats descended from the roof on wires and executed pirouettes on the faux Greek pillars. Dot-com executives, dressed as spacemen and construction workers or ensconced in what looked like giant candy boxes, tried to drum up interest in their businesses. Protesters from the Coalition Against Dot-Com Displacement handed out leaflets, denouncing the way these same dot-coms have caused rents to skyrocket and driven poor people out of their homes.

A red carpet led up the steps and into the building. As we ascended, fake paparazzi dressed in 1940s clothing snapped photos and told us that we looked "fabulous." Inside, everything was busy, but smoothly high tech. An electronic drone rumbled through the hall. Guests jostled for attention in front of a display case offering "global editions" of "the world's most influential newspapers." A young woman in a silver dress, with pink hair sporting bangles and antenna-like attachments, posed for photographers and basked in the general admiration. We paid obeisance at the Nominee's Altar, a large retablo packed with giant candles, heaps of shells, fruits, wooden nickels, rabbit's feet, old paperback science fiction novels, and a wishing well in the center. Then we stood in line to peer into the "eye-cam." This was a small round window, like a porthole. One at a time, we looked through it, into a kind of cage lined with white fur. At the back of the cage was something that looked like a tiny toilet bowl. As I watched, my face appeared on the open upper lid. Later I learned that my image was simultaneously projected onto a giant circular video screen above the stage in the main auditorium.

All in all, the mood was one of controlled delirium. It was sensory overload, but of a sort that never overstepped the bounds of good taste. There was none of the cheerful vulgarity of Las Vegas, and none of the intensity of a rave or a good dance club. The message was "We are having fun; look how wild this all is." But also "Stay cool; don't get carried away."

The occasion for all this simulated frenzy was the ceremony for the fourth annual Webby awards. The Webbys are supposed to be the online world's equivalent of the Oscars or the Emmys. Websites are nominated, and winners awarded, in 27 categories, ranging alphabetically from Activism to Weird. These categories are a mix of the popular and the abstruse, the geeky and the aesthetic, the high-minded and the crassly commercial. There are prizes for Arts, Community, and Science, as well as for Commerce, Fashion, and Finance.

I was there as a member of the group behind PHON:E:ME, a multimedia website that was nominated in the Arts category. PHON:E:ME can be pronounced in three ways: as "phoneme," "phone me," or "phony me." It was created by the experimental writer and web artist Mark Amerika, together with several collaborators in music, graphics, and programming. It's an offbeat, cunningly organized website that comments ironically on the ongoing corporatization of the Internet, and on the way postmodern culture is increasingly a matter of marketing proprietary brand names. I had nothing to do with the actual making of the site. But I wrote an online essay analyzing it after the fact. As a result, I became something like PHON:E:ME's unofficial theorist in residence. And that led in turn to my Webby invitation.

I was thrilled to go, because tickets were hard to get. After all, what strokes your ego more than attending an event from which other people are excluded? If you weren't invited as a nominee, you had to be either a wealthy sponsor of the Webbys or a prominent personality in the online world. Once we were in the hall, we had a bit of trouble with this policy of exclusivity. It happened at the Will Call window. We were asked to provide personal identification, to prove that we were really the people behind PHON:E:ME. But somehow, driver's licenses and passports were not sufficient. What the authorities really wanted was for us to show them our PHON:E:ME business cards. We pointed out that no such cards existed, since PHON:E:ME was a work of art, and not a business. This seemed to disconcert them to no end. I guess we should have known better, given how often the idea of self-promotion is mentioned in PHON:E:ME. Fortunately, after a few more minutes of arguing, they finally relented and gave us our tickets.

The awards ceremony itself was slick and businesslike. The audience was overwhelmingly white, with a discreet sprinkling of people of color. A number of minor celebrities spiced up the proceedings. Award presenters included Sandra Bernhard, web guru John Perry Barlow, and Talk magazine editor Tina Brown. The emcee for the evening was Alan Cumming (winner of a Tony for his performance in the Broadway revival of Cabaret, and most recently seen onscreen in Eyes Wide Shut, Titus, and The Flintstones in Viva Rock Vegas). Cumming was a snazzy and self-ironizing presence. He wore a loud pinkish-red shirt under a dark suit, and his hair was bunched up, sort of like Zulu knots meet Topsy. He told jokes, sang a comic song, and generally kept the ceremony moving along at a brisk pace. Cumming (who is Scottish) cut a very San Franciscan figure, coming off as a hip 'n' funky, ambiguously bisexual answer to the Oscars' Billy Crystal.

There were several musical production numbers during the ceremony, but fortunately nothing on the elephantine scale of the Oscars. The round video screen, continually crackling with clever animations and comic montages, was really the center of attention. The winners' names were also flashed onscreen, avoiding anything as old-fashioned as the Oscars' ritual opening of the envelopes. The Webby award statuette itself eschews the human shape of the Oscar and Emmy statues. Instead, it has the form of a giant helix, inscribed with the ones and zeroes of digital code rather than the base pairs of biological DNA.

But the main way that the Webby ceremony distinguishes itself from the Oscars is in its strict requirement that all acceptance speeches be limited to five words or less. The threat for violating this rule was a spanking from the Mistress of Ceremonies. This led to a lot of lame, if mercifully short thank-yous. The hackers who run the search engine Google, winner for best Technical Achievement, came up to the stage on roller skates, all wearing matching sports jerseys, just like the prepster boys they most likely really are. But there were also a number of creative speeches that rose to the challenge of brevity. The Onion, winner for best Humor website, had the funniest speech: "They said I could only...." Paul Smith was awarded the Webby for best Fashion website; a female model came on stage and accepted the statue with the words: "I am not Paul Smith." When Merriam Webster Word Central won for best educational site, a woman came up in an old-fashioned dress and granny glasses. She looked like a parody of an elementary school librarian, and her speech consisted of five slowly recited multisyllabic words.

In contrast to both the prevailing mood of corporate self-congratulation and to these examples of nerd humor, two of the award winners were openly confrontational. Alas, PHON:E:ME didn't win in the Arts category. We were beaten out by Web Stalker, a piece of subversive software made by the art collective I/O/D. Web Stalker is best described as a deconstructed browser that tears websites apart instead of rendering them in the conventional way. The Web Stalker acceptance speech was the most memorable sentence of the evening: "Technical innovation equals class war." This statement means, I think, that technology is never neutral. We always need to ask who benefits from a given technological advance, and at whose expense. Then there was Ad Busters, winner in the Activism category. The Ad Busters website, like the magazine of which it is an offshoot, is devoted to "culture jamming." It critiques corporations and the media, produces anti-corporate spoof ads, and generally interferes with "business as usual." Their acceptance speech sarcastically alluded to the hopes and dreams of much of the audience: "Three letters: IPO."

The post-ceremony party, sponsored and paid for by Intel, was fabulous. Huntington Park, across the street from the Masonic Auditorium, was covered with gigantic tents, forming a maze of rooms, passageways, and cul-de-sacs. Inside, there were free drinks and food. In one room, DJ Spooky and Scanner blasted out their mutant sounds. In another, a bank of terminals stood ready for those who couldn't bear to spend another minute without checking their e-mail. Camera crews roved around, interviewing award winners. Rich patrons in tuxes and evening dresses and dot-com business people in smart suits rubbed shoulders with techies, party girls, and alternative types of all genders. Unquestionably, business mingled with pleasure. The Cocky Bastard, winner in the Personal category, recounts on his website that, as he stood at the party holding his award statuette, venture capitalists kept walking up to him and asking him what his company did. They were confused to learn that his only business was himself.

The whole Webby awards ceremony brought home to me, as never before, the way aesthetics and business are intertwined. Eight years ago, when I first started spending a lot of my time online, I really felt like I was a pioneer. The Internet seemed like a radical new space, where nearly anything was possible. By four years ago, when the web crossed over to mass acceptance in America, I was blasé about the whole thing. Nothing seemed fresh; I had already been there, done that. Three years ago, when the first Webbys were given out, the ceremony took place in a small nightclub and almost went unnoticed. This year, the ceremony was well publicized and had all sorts of corporate sponsorship ("Are you ready?"). I guess I could be an old-fart elitist about it all, and bemoan the fact that my private pleasures have now been adopted by the masses. But my deeper concern is really the opposite. What worries me is not that the Internet is no longer hip. I'm upset, rather, that the online world is so fucking hip; that the path from avant-garde experimentation to commercial exploitation is so short, so easy, and so painless. All the signifiers of coolness and funkitude were in plain sight at the Webbys: everything from spiky, unnaturally colored hair to scant, but strategically placed people of color. And all these signifiers did was to enable, and smooth the way for, the great mission of corporatization. It isn't just that the dot-com yuppies outnumbered the artists and bohos at the ceremony. It's that these groups were indistinguishable from one another, both in their dress and in their shared conviction that dressing cool somehow makes them different. Of course, I'm as guilty of these facile assumptions as anyone else. And of course, I should have known better, since the whole point of PHON:E:ME is that you can't really avoid cashing in and selling out.