Bob Guccione, who founded Penthouse magazine in the 1960s and built a pornographic media empire that broke taboos, outraged the guardians of taste and made billions before his empire was decimated by a string of bad investments and Internet competition, died yesterday at Plano Specialty Hospital in Plano, Texas, after losing a long battle with lung cancer. He was 79.

Flamboyant Bob Guccione

Flamboyant Bob Guccione

Robert Charles Joseph Edward Sabatini Guccione was born in Brooklyn on Dec. 17, 1930, the son of Anthony and Nina Guccione. He was raised Roman Catholic in Bergenfield, N.J., and said he considered the priesthood, but decided to be an artist. In 1948 he graduated from Blair Academy, in Blairstown, N.J. At 18 he married the first of his four wives, Lilyann Becker, and had a daughter, Tonia. The marriage soon failed.

Over the next 12 years he traveled in Europe and North Africa, sketching tourists in cafes and working odd jobs. In Tangier he met Muriel Hudson, an English singer. They traveled together for several years, were married in 1955 and had four children: Bob Jr., Nina, Anthony and Nick.

In 1960 they settled in London, where he ran a dry-cleaning business, drew cartoons for a syndicate and edited a small newspaper. A mail-order business, selling back issues of men’s magazines, put him deep in debt, and his wife left him, taking the children.

With Kathy Keeton, a dancer from South Africa who was his girlfriend, his business partner and later his wife, Guccione challenged Playboy at the height of the feminist movement and the sexual revolution, introducing Penthouse in the United States in 1969.

The adult publication billed itself as “the magazine of sex, politics and protest,” and quickly challenged Playboy magazine by offering a mix of tabloid journalism and provocative photos of nude women. The centerfolds were dubbed Penthouse Pets. Its images of women, often shot by Mr. Guccione, left little to the imagination. Compared with Playboy Playmates, as the Hefner centerfold models were known, Penthouse Pets were arrayed in more provocative poses. The magazine infuriated feminists and conservatives, but others praised it for breaking taboos.

In 1984 it was the magazine that took down Miss America, publishing nude pictures of Vanessa Williams, the first black woman to hold the title. Williams, who went on to fame as 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.

One of Penthouse topselling issues featuring Vanessa Williams

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.

By the early 1980s he was one of America’s richest men, king of a $300 million publishing empire, General Media, which owned Penthouse, with a monthly circulation of 4.7 million in 16 countries, and 15 other magazines in addition to book, video and merchandising divisions.

An April 2002 New York Times article quoted Guccione as saying that Penthouse grossed $3.5 billion to $4 billion over the 30-year life of the company, with a net income of almost 500 million dollars.

Forbes listed Guccione in its Forbes 400 ranking of the wealthiest people, estimating his net worth in 1982 as $400 million. His art collections, worth $150 million, included works by Degas, Renoir, Picasso, El Greco, Dalí, Matisse and Chagall. Troves of art and antiques filled his Manhattan home, a 17,000-square-foot double town house on East 67th Street, and his country estate in Staatsburg, N.Y.

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 complications during surgery for an intestinal obstruction, aged 58, in New York City. Her death had profound effects on Guccione’s business and personal life.

Kathy Keeton...Bob Guccione's third wife

Guccione’s empire fell apart thanks to several bad investments and changes in the pornography industry, which became flooded with competition as it migrated from print to video and the Internet. His company, his world-class art collection, his huge Manhattan mansion — all of it, sold off.

Probably his best-known business failure was a $17.5 million investment in the 1979 production of  film “Caligula.” Malcolm McDowell was cast as the decadent emperor of the title, and the supporting cast included Helen Mirren, John Gielgud and Peter O’Toole. Distributors shunned the film. However, it eventually became General Media’s most popular DVD.

Guccione also lost $160 million on the proposed Atlantic City Boardwalk Hotel and 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.

Penthouse’s downtrend accelerated in the 1990s as Internet pornography grew increasingly available. Guccione responded with more explicit sexual content that drove advertisers and vendors away, limiting many sales to pornographic bookstores.

In 2003, General Media (the publishing company for Penthouse) declared bankruptcy, and Guccione himself resigned as chairman of the board and CEO of Penthouse International, Inc.

In 2004, a private-equity investor from Florida acquired Penthouse 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.

Guccione eventually went back to painting, and his works were shown at venues including the Butler Institute of American Art in Ohio and the Nassau County Museum of Art in New York.

Married four times, Guccione is survived by his fourth wife April Dawn Warren Guccione, as well as daughter Tonia from his first marriage and daughter Nina and three sons Bob Jr, Anthony and Nick from his marriage to his second wife Muriel Hudson. He did not have any children with April and his third wife Kathy Keeton.