Sex.com Sold For $14M

[denny007]

I would buy sex.com for 14M, throw additional 50M into development and advertisement and sell it after couple of years for 580M

 

[Shaggy]

Seeing what Gary Kremen has gone through in the last few years with the name being stolen. I think he was happy to get rid of it for that price. Yes its a steal, but he was happy to end it.

 

[Beachie]

I just asked myself, ignoring revenue for a moment, would I pay $14m for the most recognised site on the internet? The one site that a large portion of net-newies type in when they first get on the internet. The answer is an obvious YES! And I'm sure it would be for the likes of Vertical Axis, Name Admin, etc. So why did it sell so cheap? There's more to this deal than meets the eye.

 

[YL-TRADER]

Maybe they would give me some of that money for RexToy.com !!

 

[Domagon]

$15 million had been the number floating around for quite awhile ... I thought for sure it would go for somewhat more like around $25 million minimum.

However, it came down to demand, or more aptly the lack of for the domain ... sex.com is a great domain for sure, but it was never truly developed to the extent it should have been - and as others have already said, timing makes a big difference ...

7 years ago when on-line adult was all the rage and the economy was steaming ahead, sex.com could have easily sold for around $25 to $50 million without question.

The hijacking episode really cost him big ... not only from lost business over the years, but he wasn't able to get top-dollar for the domain.

Ron

...So why did it sell so cheap? There's more to this deal than meets the eye.

Possibly ... but more likely, it's simply a matter of few buyers having that amount of money to spend...

I'm running into that problem with one of my domains (cannabis.com) that I'm selling ... many folks agree it's definitely a high-6 / low-7 figure domain, but most don't have enough money to buy it even though they'd like to.

The pool of domain name buyers above $250K or so is relatively small, and becomes ever smaller beyond that...

However, over time, as the domain business matures, the pool of high-budget buyers will grow and move upward - it used to be only a few people had 6-figure bugets, now many do ...

The buyer of sex.com, assuming no outstanding legal issues and that they do a revamp of the website, should be able to sell the domain for a nice profit in a year or two.

Ron

 

[Mr. Deleted]

Man why was I not online back in 1990? lol

But really , that is a low price, even though I agree it was probably just cause he could not find the right buyer to take it for the "right price".

 

[sevent]

What do you think this means, for The Register:

Kremen sold Sex.com to Escom for $14m on Wednesday but retains the technology he has built behind it since November 2000, plus a trademark for the name Sex.com.

What would he do with the trademark without the domain? And I agree with others that his "technology", if by that you mean what he build at sex.com, is basically a worthless mess in and of itself.

More interesting stuff:

It is also believed that Kremen has not sold the entire domain but only a majority holding in it, retaining a minority stake for himself.

http://www.theregister.co.uk/2006/01/20/sex_com_fight_continues/

 

[RatherGood]

http://www.theregister.co.uk/2006/01/20/sex_com_fight_continues/

"Kremen told us now he has sold Sex.com that he will spent his time on the "100 different investments" he has. He recently bought 5,000 adult domain names and intends to use the advanced pay-per-click technology invented at Sex.com to make money from data traffic."



This is unbelievable. Why would someone who failed to monetize the best adult domain on the internet with "Advanced PPC" be any better at monetizing 5000 lesser adult domains?

 

[financialtraffic]

In my opinion Kremen is a very smart person who has done more and been involved in more things that I can imagine.

However, at the same time it sure seems he has less to show for his work than anyone else I can think of when you consider things relatively.

For example:

.....Kremen didn't make a lot of money from Match.com. Even though the company was sold and resold for $50 million, Kremen, according to the San Jose Mercury News, only got $50,000 and a lifetime membership. You can still find his profile - "thefounder" - on the site.

article link

 

[britishbulldog]

I dont get it,he sells the domain and keeps the tm so he can get the domain back for nothing,in fact damn clever ! and people fret on here about tm issues LOL

 

[JMJ]

Sounds more like a lease of the name itself to me.

 

[Domagon]

I can't make heads or tails of this, but I'm with others here thinking that he sold a portion of it and is retaining the TM, etc as security? ... don't know.

On an aside, the new owner of the domain, if they extensively develop and promote it over time, they could likely assert common law TM rights ... and likely file a TM registration; challenge the other one. I'm assuming the deal, if it's a stake, is structured in such a way to prevent such a scenerio, but who knows ... all too confusing.

In a nutshell, it appears the seller of sex.com may get more than $14 million out of the deal over time.

Ron

 

[financialtraffic]

$12 million in cash and stock appears to be closer to the correct figure.

http://www.msnbc.msn.com/id/11003872/

 

[DaddyHalbucks]

I can't make heads or tails of this, but I'm with others here thinking that he sold a portion of it and is retaining the TM, etc as security? ... don't know.

On an aside, the new owner of the domain, if they extensively develop and promote it over time, they could likely assert common law TM rights ... and likely file a TM registration; challenge the other one. I'm assuming the deal, if it's a stake, is structured in such a way to prevent such a scenerio, but who knows ... all too confusing.

In a nutshell, it appears the seller of sex.com may get more than $14 million out of the deal over time.

Ron

No one is going to pay $12M or $14M and then be subject to a TM lawsuit.

Without the TM or a license to the TM, the title to the domain could be jeopardized.

If the TM was not included in the domain sale, there must be some licensing agreement.

I would be surprised if the TM were not included in the sale, especially for a deal of this size.

My guess is that there is just some sort of consulting/ management contract with Gary Kremen's company, perhaps for software.

 

[Mr. Deleted]

Filing Date March 12, 1998
Owner (APPLICANT) Kremen, Gary INDIVIDUAL UNITED STATES 843 Montgomery Street, Suite 300 San Francisco CALIFORNIA 94133

Published for Opposition December 2, 1997
(APPLICANT) Cohen, Stephen Michael INDIVIDUAL UNITED STATES P.O. Box 18744 Anaheim CALIFORNIA 928178744

So Cohan had a TM for Sex.com before Kremen did? It does not show Escom as having a TM, but they may be working on that.

 

[Beachie]

But the source said the value of the deal was closer to $12 million and involved cash and stock, as well as requirements that the business meet certain performance targets.

Kremen plans to continue as an adviser to the site.

So does Kremen still have a stake in Sex.com? Are the performance targets his or Escom's?

http://edition.cnn.com/2006/TECH/internet/01/24/sex.com.sale.reut/index.html

 

[financialtraffic]

He has a small minority stake. Most likely of no real significance compared to the figure at which he sold the domain.

Although if suddenly the business grows into a $500 million gorilla, then his minority stake would probably be double what he sold the domain for.

Smart business people usually try to leave their toe even in a door they are closing as they know they might want to step back inside if the time is right...

 

[Beachie]

He has a small minority stake. Most likely of no real significance compared to the figure at which he sold the domain.

Do you know that for a fact?

Looks like Escom have the right idea for developing it.

 

[financialtraffic]

"It is also believed that Kremen has not sold the entire domain but only a majority holding in it, retaining a minority stake for himself.

Kremen refuses to discuss any details of the deal but exclusively told The Register he had been "made an offer I couldn't refuse". Asked how he could sell his baby, which he spent millions of dollars and years in court to gain ownership of, he told us simply: "Babies grow up." "

http://www.theregister.co.uk/2006/01/20/sex_com_fight_continues/