Gary Kremen has parted ways with Sex.com after officially selling it on Jan. 12 to Boston-based Escom LLC.
While $14 million has been circulated as the selling price, several sources confirmed that amount to be incorrect. Andrew Miller, a partner in Domain Name Acquisition Group – the Boston-based Internet real estate developer and prospector that initially optioned the domain from Kremen and ultimately helped put together the deal with Escom – termed previous reports “99 percent inaccurate.”
Neither Escom representatives nor Kremen would reveal the exact number, but the sale involved a combination of cash and equity.
A source close to the negotiations suggested that a more accurate price may be found in the lawsuit filed in September 2005 by a Philadelphia-based company attempting the purchase Sex.com from Domain Name Acquisition Group. The lawsuit listed the agreed-upon sale price as $11.4 million, which is nothing to sneeze at.
“This is one of the most significant deals in Internet history,” says Hal Bringman, a spokesman for Escom.
For Kremen, the sale marks the end of a tumultuous run—one in which Sex.com was stolen from him by Stephen Michael Cohen, who made millions off the domain before a court awarded it back to Kremen in 2001. After losing a lengthy series of court battles, Cohen fled the country and lost a series of appeals that reached the U.S. Supreme Court. Through it all, Kremen vigorously pursued Cohen until the fugitive was apprehended in October 2005 in Tijuana.
These days, however, Kremen is all smiles.
“Sometimes the price is right,” Kremen says of the deal with Escom. “I’m not going to go into it, but I’m happy with what happened.”
Kremen will continue to run his business, Grant Media, and has moved his pay-per-click business from Sex.com to Sex.net. He’s also going to take some time to relax.
“I think the adult business is a challenging business. You’ve got to deal with some challenging people,” he says. “I want to calm down a little bit and hang out, but I’m still going to be in the game. I’m still looking for investments.”
While Sex.com is still running as a PPC engine, with banner spots on the homepage ranging in price from $20,000 to $30,000, the site is slated for a radical makeover.
Escom plans to turn the site into what one source termed an online version of Playboy. Bringman says that description is accurate in terms of content quality, but that the model will be much more interactive.
“Sex.com intends to be an organic, user-driven social network with a Google-like content policy regarding search results,” Bringman says. “This is the first time a domain of this propriety and notoriety has delved into the online social community market dominated by companies like MySpace.com.”
The site will offer classifieds, dating, chat, and directories of resources, among other things, according the Bringman.
