This story was written by Keith Dawson for the Industry Standard's Media Grok email newsletter. It is archived here for informational purposes only because The Standard's site is no more. This material is Copyright 1999-2001 by Standard Media.

MEDIA GROK
Of Fraud and Sex.com

Nov 29 2000 12:00 AM PST

A judge takes one of the most valuable names on the Web away from its purported owner, and the media get red in the face.


OK, boys and girls, try to contain your snickers while we tell the tale of the domain name sex.com. A judge took the name away from its ostensible owner and awarded it to a challenger. Some of the outlets covering the story gave in to the inevitable double-entendres. Reuters' headline alluded to the Internet's "sex.com change," and the lead called the legal battle a "hot-blooded struggle." InternetNews.com's otherwise sober coverage was topped with a curiously highbrow reference to "prurient jurisprudence."

Sex.com is one of the more lucrative properties on the Web. InternetNews cited "some industry experts" as estimating its worth at $250 million. Reuters went with a guesstimate by "lawyers" of $100 million, and added that court documents indicate that the site's former owner, Stephen Cohen, who had been running the site since 1995, took home $17 million in salary and holds stock options worth $100 million.

In the court case, filed in 1998, Gary Kremen accused Stephen Cohen of stealing the domain name that he, Kremen, had first registered in 1994. Cohen, who all the stories noted has done prison time for fraud, allegedly forged a letter that persuaded Network Solutions (dossier) to transfer the name to him in 1995. Cohen then built sex.com into a destination that attracts 25 million visitors a day, according to Reuters. All the reporters noted that the judge had ordered Cohen to pay $25 million into a court-controlled fund until damages (if any) are determined, because the court feared that Cohen was hiding his assets offshore.

Coverage from the AP and Bloomberg was brief and matter-of-fact. InternetNews's Clint Boulton and Reuters's Andrew Quinn both delved into the legal ramifications of the case. Quinn wrote that the judge's order "marked an important step in resolving the issues of Internet claim-jumping and the real value of cyber real estate." But Boulton noted that the same judge had ruled in August that domain names are not tangible property. Still, Boulton conceded, the judge's ruling "indicates that domain-name rights are protected to some degree."

InternetNews provided some good context on the principals of the court fight, noting that Kremen founded the successful dating site Match.com.

Internet Undergoes a 'Sex.com' Change (Reuters)
ZDNet

Sex.com: A Chapter of Prurient Jurisprudence Closes
InternetNews

Judge Returns Porn Site to Owner (AP)
New York Times
(Registration required)

Judge Returns Sex.com Domain to Owner (Bloomberg)
USA Today


Correction:
A previous version of this story incorrectly suggested that Gary Kremen and Stephen Cohen were one-time roommates. In April 2001, a judge ordered Cohen to pay $65 million to Kremen ($40 million in lost profits and $25 million in punitive damages). There is an outstanding arrest warrant for Cohen.