Sex.com, a domain that’s been passed around a bit in its checkered history, was sold to an anonymous group of business partners for a reported $12-14 million in cash and stock, making it one of the highest selling domains in history.
After having the site hijacked by a notorious conman and nearly a decade-worth of launching lawsuits against him and VeriSign, Gary Kremen, chief executive officer of Grant Media LLC and former owner of Sex.com, may have been glad to be rid of it.
Boston-based Escom, LLC did not release the financial terms of the deal when the company announced its acquisition of the domain. But adult industry website Xbiz.com reported a price of $14 million, an amount modified by Reuters to $12 million and stock. Kremen, also the owner of Match.com, will continue to act as an advisor to the company while managing Grant Media’s existing business.
“Escom will maximize the user experience in a fundamentally different way than we had been doing at Grant Media,” said Gary Kremen. “I am excited to see how the revolutionary new business plan evolves.”
It is unclear what the “revolutionary” new business plan involves, but Escom says it plans to offer “compelling, next-generation web interaction” centered around adult dating opportunities, adult products and services, adult entertainment, sex and relationship advice, video-on-demand, and video chat. Until now, the site has been used primarily for advertising.
The deal is believed to be the largest in history, topping Business.com ($7.5-8m), Beer.com ($7m), and AsSeenOnTv.com ($5.1m).
Sex.com’s history is rife with controversy after being hijacked in October 1995 by convicted felon and lifelong con-artist Stephen Michael Cohen. The method Cohen used to get control Network Solutions, Inc. (now VeriSign) is unclear.
During a six-year legal fight between Kremen and the domain registrar, VeriSign claimed Cohen forged a letter from Grant Media saying Kremen had been let go and the domain had been transferred to himself. This happened shortly after Cohen was released from a 4-year prison sentence for posing as a bankruptcy lawyer and forging deeds and cashier’s checks in order to swindle an elderly woman’s creditors out of $200,000.
In a press release from Grant Media after the close of the lawsuit in April 2004, however, claims that Cohen “simply picked up the phone, asked for and was granted the Sex.com domain name immediately.” Grant Media says that either way, Network Solutions made no attempt verify Cohen’s relationship with the company. The courts decided against VeriSign, officially recognizing domain names as property and that domain registrars are responsible for the governance of those domain names.
Cohen fled to Mexico in 2003 to avoid paying a court-ordered settlement of $65 million in restitution to Kremen. Mexican authorities caught up with Cohen, arrested and extradited him to face criminal charges in the US in October of 2005.
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