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Sex.com Is Said to Be Sold for About $12 Million to Escom

January 24, 2006|From Reuters

SAN FRANCISCO — Sex.com, long coveted as potentially one of the most lucrative sites on the Web because of its catchy name, has been sold for about $12 million in cash and stock, a source familiar with the deal said Monday.

Boston-based Escom, a group of anonymous buyers, said in a statement that it had acquired the Web address from Gary Kremen, chief executive of Grant Media. Terms of the transaction were not disclosed.

Sex.com is seen as one of the most recognizable and therefore financially most promising Web domain names, but it does not currently have much content.

The new owners said in the statement that they planned to transform Sex.com into "the market-leading adult entertainment destination," which they said would include "adult dating opportunities," sex and relationship advice, erotica, video on demand and live chat.

XBiz.com, an adult entertainment trade site, first reported the sale of Sex.com last week and said Escom had agreed to pay $14 million.

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.

The sale ranks as one of the most expensive Web domain name transfers and outpaces the $7.5 million paid for Business.com in 1999 at the peak of the dotcom boom.

Kremen -- also the founder of Match.com, the matchmaking site now owned by IAC/InterActiveCorp -- regained control of Sex.com after a legal battle dating to 1997 and subsequent struggles over management and ownership interests.

The site makes money selling banner ads pointing to pornography sites.

Kremen plans to continue as an advisor to the site.

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