And the winner is – the internet itself

There was a certain poetic justice to the People's Voice Webby award won by the website Hot or Not last Wednesday night in San Francisco.

The awards ceremony, which bills itself as the Oscars of the internet, was extraordinarily mindful of the dot.com implosion of the past year. "It's been a painful year," said the Webbies' organiser, Tiffany Shlain. "I don't think there's anyone in this theatre who hasn't had to do a lot more with a lot less."

Hot or Not (hotornot.com) has certainly made a big impression without needing a lot of money. The devilishly simple site encourages viewers to post pictures of themselves (or their friends) to be rated on a "hotness" scale of one to 10. The idea was hatched on a boozy Tuesday night in October last year by two University of California students at Berkeley. It was built by the Friday and launched on Monday, and the next day it was written up in Salon.com. From there the popularity – and free publicity – exploded. Hot or Not now receives millions of hits a day, logging more than 1.6 billion picture votes, and has inspired a raft of copycats.

"Things move fast on the net," said the site's co-founder Jim Young, 28, holding his People's Voice award for the Fashion category. And to a large extent that's what the Webbies are all about. But, while celebrating creativity and innovation remain the focus of the awards, the pall cast by last year's sector downturn was inescapable.

"Bankruptcy never felt so good," said Steven Johnson, publisher of Plastic.com, which won in the Print and Zines category. Plastic has run out of money and is being held together by volunteers. Johnson's other site, Feed.com, also a nominee, shut down last month after six years and wide critical acclaim.

The list of past Webby nominees on the ropes or out of business is impressive. From last year alone, the defunct include the online grocer Webvan, the delivery service Kozmo, the toy retailer eToys and the gardening site Garden.com.

But the ceremony was not all doom and gloom. The theme for the evening was "gutsiness". As one guest noted: "A lot of people seemed to think that meant 'show a lot of skin'." Much like the Oscars, guests make a statement when they come to the Webbies – often, for women, it's bare as you dare, but with outfits ringed with glowing fluorescent tubes, purple wigs and shiny silver capes. The Weird category winner, Randy Constan, turned up dressed as Peter Pan in green tights, cap and leather slippers.

Constan's personal page chronicles his obsession with the fairy-tale character. He's a single 47-year-old living in Tampa, Florida, and he took advantage of his moment in the sun to make a personal plug. "No, I'm not gay," he told reporters in his thick New York accent. "But I am in search of my Tinkerbell."

Other big winners last night included the popular search engine Google in the Best Practices category, The Onion for Humor, Sputnik7 for Music and Expedia for Travel. Also, with a nod to the coming-of-age of the internet, the Webbies handed out their first lifetime achievement trophies, which went to Doug Englebart, inventor of the computer mouse, and Ray Tomlinson, whose contributions resulted in the invention of e-mail.

Two British sites collected hardware; the BBC World Service won in the Radio category and Plus magazine (plus.maths.org) won for Sciences.

Dr Robert Hunt of Cambridge University is Plus magazine's editor. He stood outside the ceremony afterwards holding his Webby (a silver spring) and beamed. Hunt – balding, baby-faced and wearing a conservative suit and a banker's blue silk tie – looked slightly out of place among the hip 3,000 invited guests, mainly twenty and thirtysomethings from Silicon Valley and San Francisco. He confessed he'd never heard of the Webbies when his site was nominated and never thought that his small operation, focusing on applied maths and run by a team of just three, would stand a chance. "I'm thrilled," he said.

Though times are tougher, there are definitely advantages to being a Webby winner. Hot or Not's Jim Young wore a tag attached to the back of his jacket that showed how he scored when his own photo was posted on his website – a measly 3.4. His partner on the night, who would give her name only as Diana, was rated on the site, too. Her score? 9.9.

A full list of winners can be found at: www.webbyawards.com