Sex + Dotcom = $13,000,000 Sold Offshore
How much are the rights to three letters with dot com behind them? The answer is $13,000,000 if those letters are sex.com.
After coming to the table with its minimum $1 million dollars in earnest money, Clover Holdings, based on the Caribbean island of St. Vincent, won the high bid. Wednesday, an attorney filed a motion in a California bankruptcy court requesting the name be transferred and that “time was of the essence.”
Getting rich quick registering domain names is not as easy as it sounds. The story of sex.com and it’s original owner are a good example of why.
Sex.com started out as the property of Gary Kremen who knew generic .com names would be worth a lot of money one day. At the time, the names were free.
Kremen was convinced classifieds would be big so he started registering names based upon popular ad sections. There was autos.com, housing.com and of course, sex.com. While these names were free to Kremen, he finally bought a name he thought would be a real winner, match.com, which netted him $50,000.
In 1994, Kremen registered the name sex.com with Network Solutions. They had been granted the exclusive right to register domain names ending in .com, .net and .org by the National Science Foundation (NSF) in 1992, thus creating a market.
In 1995, Kremen found out Stephen Michael Cohen, just out of prison from a 48 month spell for fraud, had stolen the sex.com name which Kremen had registered for free. A representative, likely no longer in the employee of Network Solutions, was finally convinced to make the transfer based only upon a fax.
The fax purportedly came from one of Kremen’s companies, on-line classifieds. Cohen said Kremen had been dismissed and the name was abandoned, therefore, Cohen was free to take it. The unverified transfer later set Network Solutions and its successor company, Verisign, up for a hefty lawsuit.
Stephen Michael Cohen
Cohen put sex.com to work making up to $750,000 a month from affiliate ads and click-throughs. Cohen transferred it between various companies to keep Kremen, who was suing, off guard. By the time Kremen prevailed in his lawsuit in November of 2000, Cohen had reportedly generated over $100 million in revenues. Network Solutions was ordered by the court to return the name to Kremen.Continued on the next page