The Real Price of Sex.com

By Keith Regan

Porn and the Internet were made for each other. In exchange for some much-desired privacy, users are willing to deal with fly-by-night companies and even give their credit card data to questionable vendors.

The news reports say that Sex, the domain name, is worth at least US$65 million. That's how much a federal judge awarded the rightful owner from the pockets of a cybersquatter who made an estimated $40 million in profit over a five-year stretch.

The value set raised a lot of eyebrows. After all, conventional wisdom held that the most expensive domain to date was Business.com, which sold for $7.5 million back in 1999.
Naturally, sex trumps business. But this verdict should be viewed as undeniable proof that sex on the Internet is business. Huge business. And maybe it's time to bring it out in the open.

It Sells

The battle over Sex.com is a rare glimpse into just how much money is changing hands in the underground Web economy. It is confirmation that pornography is the dominant force on the Web, even after a good five years of legitimate e-commerce growth.
How many dot-coms would love to have been able to tell shareholders that the business cleared $40 million a year? Or $8 million? Or even $1 million? Literally thousands of dot-coms would love to be in that position, from those selling automobiles to those selling zebra-print handbags.
Now, Sex.com had an advantage in that it was being run illegally, on someone else's domain name no less. Who knows how many other sites are running that way without paying taxes and without any protection of their user's private information.
But the fact remains that e-business success stories are needed in whatever form they come.

No Brown Bag

Of course, society won't have it. That's the reason online pornography was hidden below the surface to begin with.
But pornography and the Web go together as well as -- or better than -- any other product and trade channel. Porn and the Internet were made for each other. Think about it: The buyer need never show his face, and doesn't have to leave home. And in exchange for that much-desired privacy, users are willing to deal with fly-by-night companies, and even give their credit card data away to questionable vendors.
Very few people were shocked to learn that federal investigators were charging some New York-based Web pornographers with illegally billing customers millions of dollars. One official admitted that thousands of such cases probably go unreported because of the nature of the complaints.

Win-Win?

There is an immediate advantage to be had if we bring legitimacy to the underground portion of the Internet: security for the consumer. And the boost in security goes well beyond preventing potential thefts. Wouldn't having a well-patrolled Web -- in all four corners of it -- guard against child pornography better than the current system?
Bringing an underground business into the light will have to take place a little bit at a time. The rightful owner of the Sex.com domain seems to have the right idea. He says he's going to remove the hard-core photographs that have been on Sex.com and remake the site into a portal for people looking for a variety of paid adult sites.
That's a start. Given the site's profitable past, he will probably be able to afford to put truly workable age controls in place and take steps to make sure that people, especially children, aren't re-directed to adult sites unwittingly.

Lighter Side

With the ruling in the Sex.com case, a bright spotlight was aimed at the underground world of online porn. Thus, now is as good a time as any to start bringing more of the Web's darker side above board where it can be patrolled. Delicately, of course, so as to not infringe upon anyone's rights.
Once brought into the light, some of the Web's dark side can become a much-needed success story for the basic premise of e-commerce.
What do you think? Let's talk about it.