Net News

Sex.com Sold for $12Million

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 last month.

A group of anonymous buyers, Boston-based Escom LLC, said in a statement it had acquired the Web address Sex.com from Gary Kremen, chief executive of Grant Media LLC and the founder of Match.com. 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 does not currently have much content.

The new owners said in the statement that they plan 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.

A source said the value of the deal was closer to $12 million than the reported $14 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 ever and outpaces the $7.5 million paid for business.com in 1999 at the peak of the dotcom boom.

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

Worldwide digital music sales surged threefold to $1.1 billion in 2005, the industry trade body said, as consumers flocked to buy music for their computers, iPods and mobile phones.

Revenues are split roughly 60-40 between online music services such as Apple's iTunes Music Store and mobile phone revenues such as “ringtunes” that contain excerpts of songs, the International Federation of the Phonographic Industry said.

Digital music now makes up about 6% of the industry's total sales, up from virtually nil 2 years ago. However, overall revenues are still in decline, falling from $13.4 billion to $13.2 billion in the first half of the year.

The music industry, whose sales have plunged since the advent of file-sharing networks such as KaZaA, saw the tide begin to turn in 2005 with a series of courtroom victories in the United States, Australia and other countries.

In 2006, industry watchers predict that many file-sharing networks will attempt to become legitimate by installing filtering software that screens out copyrighted music.

Students are demanding that the operator behind the now-defunct i2hub online file-sharing network pay to settle copyright infringement claims against them by the recording industry.

Founded by Wayne Chang in 2003 while he was a student at the University of Massachusetts-Amherst, the i2hub network linked students and others over the super-fast Internet2 network.

In a recent letter to Chang, attorneys with the Student Legal Services Office claimed i2hub placed ads on campus to deceive UMass students into believing the software was approved by the university.

It is one of several reasons that the student-funded legal group says led its clients to believe they were authorized to use the software to trade copyrighted music and other files.

At least 42 students have been named as defendants in John Doe lawsuits filed by the recording industry. The industry trade group has offered to settle each case for $3,750, lawyers for the students said last month.

“Had the students known that they were exposing themselves to copyright infringement liability by using the i2hub service, they likely would not have used the service,”' the legal group wrote.

Chang shut down i2hub in November after receiving a cease-and-desist letter from the recording industry. He said his software required computer users to check an “end user license agreement,” or EULA, that included warnings about potential liability from using it to swap copyrighted content. The agreements are standard disclaimers found in most software programs.

“If this case goes to court and wins in their favor, it basically invalidates all the EULAs in the world,” Chang said. “It doesn't make any sense. We spelled it out for them.”'

In the letter, the legal group offers to settle the matter with Chang before going to court if he pays $157,500, the total amount the recording industry wants to settle with all 42 students.

Chang's attorney, Charles Baker, says his client is not liable and threatened a countersuit if the matter goes to court.

Sex.com Sold for $12Million

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 last month.

A group of anonymous buyers, Boston-based Escom LLC, said in a statement it had acquired the Web address Sex.com from Gary Kremen, chief executive of Grant Media LLC and the founder of Match.com. 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 does not currently have much content.

The new owners said in the statement that they plan 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.

A source said the value of the deal was closer to $12 million than the reported $14 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 ever and outpaces the $7.5 million paid for business.com in 1999 at the peak of the dotcom boom.

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

Worldwide digital music sales surged threefold to $1.1 billion in 2005, the industry trade body said, as consumers flocked to buy music for their computers, iPods and mobile phones.

Revenues are split roughly 60-40 between online music services such as Apple's iTunes Music Store and mobile phone revenues such as “ringtunes” that contain excerpts of songs, the International Federation of the Phonographic Industry said.

Digital music now makes up about 6% of the industry's total sales, up from virtually nil 2 years ago. However, overall revenues are still in decline, falling from $13.4 billion to $13.2 billion in the first half of the year.

The music industry, whose sales have plunged since the advent of file-sharing networks such as KaZaA, saw the tide begin to turn in 2005 with a series of courtroom victories in the United States, Australia and other countries.

In 2006, industry watchers predict that many file-sharing networks will attempt to become legitimate by installing filtering software that screens out copyrighted music.

Students are demanding that the operator behind the now-defunct i2hub online file-sharing network pay to settle copyright infringement claims against them by the recording industry.

Founded by Wayne Chang in 2003 while he was a student at the University of Massachusetts-Amherst, the i2hub network linked students and others over the super-fast Internet2 network.

In a recent letter to Chang, attorneys with the Student Legal Services Office claimed i2hub placed ads on campus to deceive UMass students into believing the software was approved by the university.

It is one of several reasons that the student-funded legal group says led its clients to believe they were authorized to use the software to trade copyrighted music and other files.

At least 42 students have been named as defendants in John Doe lawsuits filed by the recording industry. The industry trade group has offered to settle each case for $3,750, lawyers for the students said last month.

“Had the students known that they were exposing themselves to copyright infringement liability by using the i2hub service, they likely would not have used the service,”' the legal group wrote.

Chang shut down i2hub in November after receiving a cease-and-desist letter from the recording industry. He said his software required computer users to check an “end user license agreement,” or EULA, that included warnings about potential liability from using it to swap copyrighted content. The agreements are standard disclaimers found in most software programs.

“If this case goes to court and wins in their favor, it basically invalidates all the EULAs in the world,” Chang said. “It doesn't make any sense. We spelled it out for them.”'

In the letter, the legal group offers to settle the matter with Chang before going to court if he pays $157,500, the total amount the recording industry wants to settle with all 42 students.

Chang's attorney, Charles Baker, says his client is not liable and threatened a countersuit if the matter goes to court.