Sex.com sells
Domain name sells for $13 million to Clover Holdings after owner Escom declared bankruptcy and put the domain on the auction block.
Sex.com sells--for $13 million, that is.
Placed on the auction block in July, the potentially valuable domain name has been scooped up by Clover Holdings from Escom for a cool $13 million. Escom put Sex.com up for sale after declaring bankruptcy earlier this year.
Though it swooped in with the winning bid, Clover can't officially claim ownership until the sale is approved by the bankruptcy court overseeing Escom. This is expected to happen on Wednesday. Not much is known about Sex.com's new owner. BBC News describes it as an obscure company registered on the Caribbean island of St. Vincent.
Escom bought the Sex.com domain name in 2006 for an estimated $14 million.
The tale of Sex.com could fill a book. In fact, two books have been written about its checkered past. The site was first registered in 1994 by its original owner, Gary Kremen, the founder of Match.com. Kremen lost the domain the following year after Stephen Cohen, who had just been released from prison for impersonating a bankruptcy lawyer, wrote a letter to Network Solutions and told the domain registrar it to transfer the name to him.
Without checking the legitimacy of the letter, Network Solutions transferred Sex.com to Cohen, who apparently collected around $40 million from the site over the next few years. Kremen sued Network Solutions and Cohen. A lower court ruled against him, finding that domain names were not subject to the same laws as tangible assets. Kremen did finally win a $65 million judgment against Cohen, but Cohen moved his money overseas before hightailing it out of the country.
In 2003, an appeals court ruled that Kremen did have a right to the domain name. The court also found Network Solutions--now owned by VeriSign--liable for giving away the domain name without verifying the rightful owner. Settled in 2004, the suit established a precedent requiring that domain name registrars be held accountable for the domains they manage.
Wanting to exit the online adult business, Kremen eventually sold Sex.com to Escom. The domain was initially supposed to be up for auction this past March, but creditors of Escom forced the company to declare bankruptcy. In May, the creditors reached a settlement with Escom, which allowed Sex.com to go on the auction block.
Anyone eager to read more about Sex.com's bumpy history can check out two books: "The Sex.Com Chronicles" by Charles Carreon and "Sex.com: One Domain, Two Men, Twelve Years and the Brutal Battle for the Jewel in the Internet's Crown" by Kieren McCarthy.