SAN FRANCISCO (Reuters) – A bearish market and investors looking for safe bets may dampen the planned public debut of Penthouse Media Group Inc, publisher of the racy men’s magazine, as the company tries to win Wall Street’s support of its switch of focus from print to online.

Penthouse said earlier this month it plans to raise $250 million in a public offering and expects to file a registration statement with the U.S. Securities and Exchange Commission in the second quarter.

The Boca Raton, Florida-based company, formerly known as General Media Inc and reorganized in 2004 under current Chief Executive Marc Bell, [pictured] plans to use the IPO proceeds to pay down debt so it can focus on making money off the huge Internet audience for adult entertainment.

Bell earlier told Reuters the company has tamed its flagship, once known for its hard-core brand of porn, to appeal to a wider audience, along the lines of popular “lad” magazines such as Maxim.

Penthouse has also bought related Web businesses, including the adult social networking site Adultfriendfinder.com, as part of Bell’s efforts to refocus the company’s strategy.

“We’re not a publishing company. We’re an Internet company,” Bell said in a later interview.

But investors currently have a poor appetite for new stocks of companies with unproven technologies or revenue streams, whether it’s a biotechnology start-up or a publisher of adult entertainment, IPO Boutique analyst Scott Sweet said.

Regardless of (Penthouse’s) new concept, it’s likely to be a tough sell in this environment,” Sweet said.

“You need a speculative marketplace for individuals and institutions to want to participate in IPOs,” he said. Right now, investors are struggling to maintain profitable positions in core holdings such as Google Inc (GOOG.O: Quote, Profile, Research) or Apple Inc (AAPL.O: Quote, Profile, Research) stocks, he added.

Even these tech darlings — which withstood the initial market volatility brought on by the credit and housing market crises — have taken a beating since January as the economy teeters on the edge of recession.

This year, leery underwriters have withdrawn 26 IPOs and postponed five, according to IPO research firm IPOHome, as everyone waits for the markets to stabilize.

The only splashy debut has been Visa Inc’s (V.N: Quote, Profile, Research) record $17.9 billion IPO, which bucked the trend because investors felt safe — Visa has an established business model and global brand recognition, and credit card usage is expected to surge, especially in emerging economies.

Investors may also be seeking a return to Finance 101 when looking at IPOs, said IPO Desktop analyst Francis Gaskins.

He said investors — who tend to be more lenient about financial data during during good times — are going to be looking closely at income statements and whether Penthouse has sustainable sources of cash.

“In this climate, you can do an IPO but it has to be transparent,” Gaskins said. “People have to understand the income statement and trust management.”

It might be even tougher for Penthouse given that shares of its arch rival Playboy Enterprises Inc (PLA.N: Quote, Profile, Research), which has been publicly traded since 1971, have nose-dived from their 1999 peak of about $35.

Playboy shares are off 27 percent from their 52-week high of $12 last October, and have not traded above $20 since 2000.

Playboy, like Penthouse, has said it is focusing on building complementary Web businesses, as circulation for its men’s magazine continues to plummet.

Publishers are one of the worst-performing groups in the public markets these days. Most have been tainted by a broad exodus of readers and advertisers from print media, making them unattractive buyout targets and nearly eliminating them as a group that even thinks about offering stock to investors.

Bell, a 40-year-old financier, repeatedly insisted in the interview that Penthouse is not a publisher, but an Internet company. He said more than $300 million, or 90 percent of Penthouse’s revenue, comes from subscription-based Penthouse Web sites and other Internet businesses.

The company has more than 240 million people registered on its Web sites — many of them acquired in December through its $500 million purchase of Various Inc. “And we’re adding 5 million people a month,” Bell said.