Will We Remain an Incestuous Industry? Sex.com Sale May Reveal the Answer!

Morning Folks!!


Do I think the domain sex.com is cursed? Serge says it is so
that gives me pause. The evidence keeps mounting up and so that also gives me
pause. But let me tell you what Sex.com really is. Sex.com is going to tell a
lot about the state of the domain industry for better or for worse and whether you like it or not.


First, no domainer is going to buy this domain for $14 Million. Ain’t
gonna happen. I don’t know a single domainer that would risk $14 million on a
domain that has failed over and over again. As for an adult site buying it, that is a possibility, but not a great
one or it would have already been sold.


I have said for years that the domain business is an incestuous
industry. Interesting that it will be Sex.com that either proves we are still
one or have broken out beyond that in a real burst. Like you, I could easily name a
dozen companies or more that could have an interest in this domain. I could
also see a dozen companies with some very colorful Board Meetings. So will the
end user be in this equation? Yes, in the form of adult interest, but I
certainly would like to see it go well beyond that. As I stated in my last
post……if and when sex.com sells, it will be a bell weather transaction. No
other sale since Men.com in 2003/2004 will give us more of an indication of where we are and
where we are going from here then this sale. As folks trip over themselves trying to get a .whatever registry and looking for the 'Second coming', the most famous .com is now available. But let's be honest, even I would say that buying a SMART .whatever has a better upside than Sex.com for a fraction of the cost and risk. Don't faint! Even I am surprised by that. But I am a numbers guy and I would rather have 50 or 100 .whatever's than one Sex.com. I think the upside on sex.com is limited.


The legal wrangling we are seeing and are about to see should be a
lesson to everyone about controlling the domain AFTER the sale if the deal is
not all cash. More folks lose their most valuable domains via bad contracts.
MANY of these contracts have the INTENT to eventually get your domain without
paying for it. I have rejected more contracts on domains for this very reason
than most people ever sign. I can name folks in this business that basically
did this for a living over the years. They get mighty angry when you figure out
what they are up to. Better for them to get angry then lose your asset. If you sign a contract on a domain and the return of that domain is not spelled out in great detail in case of default, you are going to lose that domain or it will be tied up in litigation and the costs will just mount and mount and you still may lose the domain.


Have a GREAT Day!
Rick Schwartz




19 thoughts on “Will We Remain an Incestuous Industry? Sex.com Sale May Reveal the Answer!

  1. Chip

    The primary cost of this domain is going to come after the sale. Revenue required to generate profit on a $10MM expense is huge. If the buyer is not planning on spending $20MM more to promote and build the business and site behind the name, it will be sure to fail. One of the issues domainers need to come to terms with is that value is”built into” domains, not”taken out” of domains. Domains are full of potential but only represent a gateway to a successful business once visitors arrive.

    Reply
  2. Moriel

    Hi Rick,
    On the one hand you say that it will be a benchmark for the industry, for the good or bad. On the other hand besides it being the most famous domain it has had it’s share of troubles and as you mentioned some think its cursed too.
    So why should it be used as a bench mark? Why not look at all the other 7 figure sales that were in the last 2 years during some of the worst financial climate?
    If possible I would like to touch base with you regarding your second part so as not to get into the same situation.
    Tx,

    Reply
  3. Kevin

    I agree completely. I’d rather have 100 $100,000 or 10 $1 Mil domains vs. a single $10 Mil domain.
    Anyways it’ll be a while until anything happens now that the domain is lawyered up and there is so much disharmony between the partners.

    Reply
  4. Dean

    Think about it, that name could be used to brand anything from automobiles to toasters. I think we need to think outside the box with this one. Whoever buys this one is getting a name, a brand and a built in automated publicity machine. If you think about the exposure a product could get from this name over a 5 year period, it’s not so much to pay. I think the more this particular domain name distances itself from the sex industry the better it’s chances are of success.

    Reply
  5. Louise

    The part about the contracts is interesting. Would you create a post about your experience there?
    Thanx!
    Louise :)

    Reply
  6. UFO

    Oh yes, I picked the Dow at 8300 in July last year to hit 10k by Y/e, I have been predicting the Dow at 12k by the end of this year.
    My guess is that interest rates are going to be kept artificially low and inflation masked (and basically denied) for as long as possible. It’s a smash grab raid on cash based holders.
    As for sex.com, it isn’t what it used to be, difficult to justify a huge premium when people can find whatever for basically free on youtube clones etc. It’s an ego domain with large legal risk. 24 500k domains would give far greater value etc. We’re sort of getting into efficient frontier portfolio theory on this..!
    The free traffic of sex.com can be replaced cheaply and it’s not a brand as much as a destination to an online service that has low customer loyalty.

    Reply
  7. Anunt

    It’s really obvious…Rick is trying to buy sex.com, but end user is going to outbid him by a long shot…there are too many big porn companies out there with serious cash. So who will win the domain name sex.com…rick or end user?
    Rick likes to earn money mostly from parking…this is his biggest mistake…he is losing millions…he has the best porn domains, but parking income does not even come close to a developed website income like adultfriendfinder.com … so who will win the domain sex.com…rick or end user?

    Reply
  8. Rick Schwartz

    @Anunt….Next to the domain you have been spamming everyone with for close to a decade, sex.com is the last domain I would be interested in bidding on in any way shape or form. So you are wrong again.

    Reply
  9. ScottM

    I could possibly visualize Sex.com as a online and print magazine or womens fashion brand or the name of a Las Vegas night club since most are 2-, 3- or 4-letter names, LAX, RA, TAO, PURE, etc.
    Sex.com is generic enough to work in a lot of genres but it takes a huge leap of faith for an investor to pop out $14 Million upfront. Not for the usual domain insider or big player … but I’d never underestimate one of these Russian oil and gas tycoons, $14 million on a painting or a treehouse for a harem of his lady friends would be chump change, so maybe that’s who might own Sex.com at the end of the day.

    Reply
  10. National A-1

    Sex.com never sold for even close to 14M. That was the mentioned sales price but the buyer put down less than 5M. So what did it really sell for? You decide. If you buy a house that sold for 300K the last time for 1M and put down 500K and then default what was the actual selling price?
    We agree with Rick, There are many other domains we would rather spend our money on and we do, for example Pizza.com.
    We predict that sex.com will not even sell unless all the creditors will take far less than what is owed.
    The sale was a joke. We sent someone only to have it cancled when they got to NY. The sellers should be ashamed of themselves. They KNEW they were going to file bankruptcy so they could have done it a week earler.
    It is a great domain but it does not convert well and is only worth a reasonable multiple of its limited income.

    Reply
  11. Mark

    Wouldn’t it be nice to see the US gov’t purchase the domain and turn it into a anti-teen pregnancy (education) site (there are 750,000 teen pregnancies yearly in the USA, 80% are unintended pregnancies)?
    The way they throw money around to bail out broken business’… whats another $10-15 million?

    Reply
  12. A fellow domainer

    “I would rather have 50 or 100 .whatever’s than one Sex.com.”
    HUH???
    Say what???
    Is this Rick”the (.COM) Domain King” Schwartz talking?
    I respectfully yet totally DISAGREE and suggest you take two aspirins and re-read that paragraph again in the morning, Rick.
    The .COM TLD will always be considered to be the oceanfront domain on the net. Anything else will be the lakeside, the intercoastal and the landlocked. While not everyone out there wants, needs, or is willing to pay for oceanfront, it will always have the highest resale and appraisal value. Yes, even in the case of Sex.Com.

    Reply
  13. john andrews

    Thanks for being straight with your thoughts again, Rick. Clearly there is a ceiling for a domain”price” where no one can easily argue asset value vs. business potential. At $14 million, it’s pretty hard to show a marketing opportunity value via domain name alone, especially in this (global) economy.
    But your comments *must* spawn outside the box thinking.
    As a web strategist/SEO I struggle with this constantly when dealing with client work (and domainers). Too many people struggle to think even a little outside of”the box”.
    Consider sexy.com. Imagine what sexy.com could be if it were positioned as the Forbes of style (globally), or the Time Magazine Cover equivalent for the generic”sexy”?
    How big a deal would it be to the egos of the world to”make it” to the home page of sexy.com (with meaningful content behind the story)? The latest urban BMW sedan? Mid-life transitioning actress or model? A Prince or Industrialist seeking a second global recognition? How about Rick Schwartz, the Domain King? How would it feel to be selected and featured like that?
    I don’t know a single highly successful man or woman who isn’t thinking of the finer aspects of life”style” these days.
    The”generic” sexy.com could be tomorrows Architectural Digest, Time Magazine Man of the Year, Rolling Stone feature, Amazing Weddings feature, etc… accessible to everyone every day, leading the style hive mind and driving commerce. Instead, it’s a porn site. As you used to say about generics defining their space… is the world ready to celebrate”sexy” in the generic like that? I think so.
    And so it is with many generics. What about sex.com? In truth, once a generic domain like that establishes a price *floor*, where it can’t go for *less* than $5 million or whatever, we need to start thinking in new ways if we want to justify taking development risks.

    Reply
  14. Shuw!X

    Sex.com shows how much money is still in domain flipping.
    But domain parking should improve alot. Just like Whypark or Smartname.

    Reply
  15. Anonymous

    I agree with the above contributor who said that one good .COM is far more valuable than a ton of .whatevers.
    I guess time will tell, but it bothers me to see people waste money on the .whatevers when I see no future for them other than selling to suckers.

    Reply
  16. mbt shoes

    I guess time will tell, but it bothers me to see people waste money on the .whatevers when I see no future for them other than selling to suckers.

    Reply
  17. nike shox TZ

    On the one hand you say that it will be a benchmark for the industry, for the good or bad. On the other hand besides it being the most famous domain it has had it’s share of troubles and as you mentioned some think its cursed too

    Reply
  18. Alan

    Whoever buys this one is getting a name, a brand and a built in automated publicity machine. If you think about the exposure a product could get from this name over a 5 year period, it’s not so much to pay.

    Reply

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