The Salacious (But Suitable-For-Work) Story of Sex.com
Getting a good domain name isn’t as simple as heading over to Go Daddy and looking for the best available URL. Clever cybersquatters and con men have figured out ways to get some of the choicest domain names out there, and if they get a particularly good name, it can be an eight-figure jackpot. Of course, when there’s that much money at stake, someone’s bound to be underhanded. Let’s take a look at three notable domain disputes.
Sex.com’s story is every bit as racy as one would expect. Judging by all the smut that’s floating around on the web, one would think that sex.com would be an incredibly lucrative domain name. So far, though, it’s mostly helped lawyers rack up big fees. Match.com founder Gary Kremen first registered the domain name way back in 1994, but before he could make any sort of site to go along with the spicy name, con artist Stephen M. Cohen used forged documents to convince domain name registration company Network Solutions that Kremen had agreed to transfer sex.com to him and took control of the domain.
Cohen actually made a pretty nice haul on his sex.com swindle. After he stole the domain, he basically filled it with banner ads that led to other porn sites. Since lots of early web surfers were curious about what might be on sex.com, Cohen allegedly banked around $500,000 a month in ad and referral revenue. Not bad thieving work if you can get it.
After a protracted legal battle, Kremen regained the rights to sex.com from Cohen along with $65 million in damages in 2000. Sounds like a huge win for Kremen, but Cohen fled to Tijuana before he could fork over any damages. For years, it seemed like the only things Kremen would get from the whole debacle was Cohen’s decaying California mansion and his domain name back.
Eventually, though, authorities tracked Cohen down in Mexico, and the scammer spent time in jail. Kremen eventually sold the sex.com domain to a company called Escom in 2006 for $12 million. Escom couldn’t do anything with the domain, either, and declared bankruptcy after years of failing to turn a profit on the marquee name. A September bankruptcy auction moved the star-crossed domain again when an unknown company called Clover Holdings, Ltd. agreed to pay $13 million for sex.com. If history’s any indication, they’ll probably want to save their receipt.
In 1996, James Anderson of Reston, VA, registered VW.net as a domain for his one-man Web access company Virtual Works. Of course, that little move caught the eye of a more famous VW: Volkswagen. In 1998, Anderson allegedly offered to sell Volkswagen the domain and gave them a 24-hour window to make a deal before he sold it to the highest bidder. (It’s not clear exactly how much cash Anderson was looking for here, but a federal court ruling regarding the offer later described the demand as being for "a lot of money.”)
Volkswagen didn’t take too kindly to this strategy. The carmaker saw Anderson as a squatter of sorts and felt that he was trying to extort money from the company using their own VW trademark. Volkswagen sued Anderson for trademark infringement in an effort to get the domain name, while Anderson countered with a $12 million suit of his own that claimed the Bug makers’ claims were invalid.
After a lengthy legal battle, Volkswagen won control of the domain name back from Anderson. A federal court ruled that Anderson had infringed upon Volkswagen’s trademark and violated the Anticybersquatting Consumer Protection Act by registering the VW.net name in bad faith before attempting to profit from Volkswagen’s trademark. Now if you go to vw.net, you might find a nice picture of a Jetta rolling through some mountains.
What could be wrong with the website of the President’s digs? Nothing, but that site is whitehouse.gov. Whitehouse.com was originally a political discussion and entertainment site, but it later added – what else? - pornography to help make the site more profitable. While you’ve got to give the domain owners points for creativity, more than a few groups thought that blasting surfers – often children working on school reports – with images of hardcore porn when they went looking for 1600 Pennsylvania Avenue was in poor taste. The Clinton White House even sent the operators of the domain a cease-and-desist letter that included the passage, “For adult internet users, that device is, at the least, part of a deceptive scheme. For younger Internet users, it has more disturbing consequences.”
The White House was in a tough spot, though. Although corporations could use the Anticybersquatting Consumer Protection Act to win cases where squatters had infringed upon their trademarks, government agencies didn’t have the same latitude under the law. Basically, whitehouse.com could continue to do whatever it darn well pleased.
Eventually, though, site owner Dan Parisi had a change of heart. In 2004, his son was getting ready to enter kindergarten, and while he apparently had no problem bombarding other peoples’ kids with porn images, he certainly didn't want his little tyke being exposed to adult situations in class. Even though the raunchy version of whitehouse.com was bringing in a reported $1 million per year, Parisi decided to sell the domain name, and he stipulated that he wouldn’t sell it to another pornographer. Since then, the site has hawked everything from real estate to lawyers to videos of New Jersey town hall meetings, but now it’s just a set of squatters’ ads about education and student loans.