Why Sex.com May Not Sell In The Foreclosure Auction

As Elliot’s Blog discovered yesterday, the domain Sex.com is heading to a foreclosure auction on March 18th.

However,  just because the domain name is heading to auction, it doesn’t mean the domain is going to sell.

For one this is not an absolute auction where the highest bidder gets the domain.

Rather,  the auction notice, clearly states that the secured party, reportedly Domain Capital, has the right to place a bid equal to what it is owed on the debt including principal and interest, plus its attorney’s fees and expenses.

So its not like your going to show up at the lawyers office, with your cashier’s check for $1,000,000, be the only bidder and get the domain for a cool Million.

To get the domain, a bidder is  going to have to bid an amount, possibly up to what DomainCapital is owed, including fees and expenses, to get the domain (or at least an amount the creditor will accept).

We don’t know the amount originally loaned by DomainCapital, what the outstanding balance of the note is or what the terms of the note were, but among the possibilities is that DomainCapital has more cash in the transaction than the investors and/or that interest only payments were made on the note for all or part of the time, that leaving a huge balance.

Combine this with the simple fact that the domain may simply not be worth what is was in 2006.

Anyone in the adult internet market will tell you the market has changed fundamentally since 2006 and not for the better.

Adult pay site’s struggle to get and keep members with all the free porn on the net.

Yes since the inception of the net there has always been free porn, but it’s never been so organized, easy to find and overwhelming in nature.

Years ago sites would give out free samples, a few clips to tempt you to join.

A quick check out Google will return thousands of Free “Tube” sites,  some of which have such a huge amount of free content they generate immense traffic.

Consider that Youporn.com, which wasn’t even registered as a domain when Sex.com sold in 2006, is now the 61st most visited site according to Alexa.

Sex.com ranks as the 67,000 most visited.

Several years ago, when an group was being put together to buy Sex.com I was approached by Andrew Miller and was invited to join.

I passed on putting up a seven figure investment for a minority interest in the domain.


I thought the price was too high; I didn’t want to be a minority owner in a venture without having control over the direction of the investment,  and at the time, the direction was far from certain.

I’m sure mulitple bidders will be willing to pony up $5 Million for the domain without blinking, but that mostly likely will not be enough to carry the day.

Is this domain with fairly modest traffic worth $in excess of $10 Million when the adult internet industry is struggling to make money?

Don’t be surprised if at the end of the auction the “No Sale” sign is put up.


  1. says

    This domain auction will be a test and an opportunity for all domain investors, or those that call them selves domainers to finally walk the walk, and not just talk hype about the value of their domains.

  2. says

    Being an adult webmaster you absolutely correct about the changes in the porn industry. A few years ago the sale of porn.com went through for millions and also adultfriendfinder. I cannot imagine that this domain will go for nearly what was paid for it originally but you never know. There may be someone out here that made their back in the day that may be eyeing it. Hopefully whoever ets it will not turn i into another illegal tube site filled with stolen content and full length videos for free.

  3. says

    “A quick check out Google will return thousands of Free “Tube” sites, some of which have such a huge amount of free content they generate immense traffic.”

    Sure… you really needed to check… I bet you have half of them bookmarked :)

  4. says

    I think the real value in this domain is in taking it out of the porn business and into the mainstream. Cosmo, Movies, Dr. Ruth and Talk Shows have been able to do that…to much bigger audiences and markets than porn sites can ever reach. Books, Advice, Travel, Products…packaged right and done with the right tact, this could be an anchor outlet for society’s changes in attitude to the open discussion of sex.

    That being said, it will require the right capital AFTER the purchase to make that happen. Noone can deny the market potential this might have, getting investors to take the big step is the real challenge because it won’t be easy and it is a fin line they have to walk.

  5. MHB says


    You might be right but then you could produce the same result with a much less expensive bang on domain like sexeducation.com for example


  6. says

    Based on what the average porn surfer is really looking for online, I have to say that there is no way this domain is going to be worth anywhere near what DC would want for it. I think the price on Porn.com was right at the time because it makes sense as a type-in and the market was different. Right now most people are looking for free porn and aren’t shoppers. Torrents, forums, and tubes are killing the industry, and the funniest aspect of that is the fact that many of the biggest tubes are owned by porn companies.

    I might be wrong, the only companies I could see buying this would have to be huge established players like Reality Kings or Brazzers (although they are in their own mess now) or maybe an Ashley Madison or Adult Friend Finder type of site, but they already have their marketing tied to their own brands too much.

    It’ll be fun to see what happens.

  7. Aggro says

    2010 is back to reality & return to fundamentals

    A wake up call to all the delusional ignorant domainers who think this is the most valuable domain in the universe and who get a hard on just thinking about it.

    Not by a long shot.
    Truth is this doesn’t compare to eg. insurance.com, travel.com etc in terms of its “moneyness”

    Undeniably it’s a trophy name..

    No doubt sex.com gets a ton of traffic but making money from the traffic is hard to do with all the free porn & competition around.
    Just ask the previous owner about the ROI and why it’s in foreclosure…

    This aint 1997 when there was far less competition and when Cohen was making mad money by charging people’s credit cards multiple times – and getting away with it.
    Plus Cohen could charge the earth for a tiny landing spot/banner ad on the site b/c there was no other ad channels such as PPC ads back then (maybe had goto.com but not as mainstream as today)..

    Plus by its very nature, the keyword is a mile wide, inch deep.
    Landing page has to be general to appeal to as many visitors as possible.
    Hard to make it appeal to visitors’ niche tastes and convert to paying customers.
    Whereas niche porn is what sells these days, if at all.

    Anyway, anyone who wants to pay for porn already has an eat-all-you-can a/c with one of several online porn sites.
    Market is saturated.

  8. FX says

    there is so much i can say, and its so hard to keep my mouth shut
    … i’ll just keep my mouth shut and say no more.

    Mike I’m glad you made the same decision as we did 4 years ago.
    Money well “spent”, congrads !

  9. FX says

    I wonder if the reserve at this foreclosure auction is the same as the price DC was trying to get for this name last year. Mike do you have any knowledge on this ?

  10. MHB says


    “”I wonder if the reserve at this foreclosure auction is the same as the price DC was trying to get for this name last year. Mike do you have any knowledge on this ?””

    I do not

  11. says

    I think most owners of sites like toys.com and sex.com are missing the boat on what the full potential of these domains are. In my opinion they should be set up as vertical portals for everything on the topic. The porn industry may be hurting, but who in the porn industry would like to buy some advertising space on a well-managed, content-bloated sex.com site? Sex.com shouild not just be about porn, but all things do with “sex”. This means education, health, and even plants and animals. As it is now, sex.com looks like someone’s newbie attempt at development. As that it’s pretty good, but as a multi-million dollar site, it’s stupid, IMO.

    Look what Toysrus has done with Toys.com. They made it a portal alright, to their sites! Why bother? Why waste being everything to do with toys, and just puff up your already dominating brand? Toys.com should be the portal for all things “toy’. And I think the amount of money that could be made from it as a brand and a product would easily outweigh what benefit they are getting now. Anytime you can have your competitors pay you to advertise on your site, that’s about as good as it gets. Your cost for advertising next to your competitors = $0, unlike on TV, Google, etc. But most companies just don’t get this simple idea…

  12. LS Morgan says

    For reasons pointed out by aggro- in addition to several others- this name was probably more valuable as a type-in revenue producer back in the internet stone-age than it is today.

    I also believe sex.com stands as a cautionary tale of what happens when great names are squandered on parking or ‘glorified parking’ type development; their fantastic brand potential ignored in favor of making piles of pocket change on parking.

    Instead of sex.com advantaging it’s immense status during the past decade and becoming a fully developed, preeminent brand, it’s now hardly more than a generator of impotent type-in traffic from ‘curiosity navigators’ and whatever ‘potential’ the domain might still have, albeit less ‘potential’ than it had going for it before the pr0n market became awash in free content competitors.

    Huge vanity factor to own it- which can be the biggest factor of them all, and it might drive it’s price very high- but imo, damaged goods as far as an operating business.

  13. says

    There are various types of auctions.

    1. A true auction where there is no reserve and the item brings what it is worth. As long as the auction is well advertised the item will 100% bring its true value.

    2. An auction with a reserve. This is not really an auction but a sale. If many or most items do not sell how can that be called an auction. Most domain auctions these days are really sales and not true auctions. They are a JOKE. Many of the domains that do sell get one bid that meets the reserve. Is that an auction? NO. An auction has many bidders actively bidding on the item.

    3. The sex.com auction. This is not an auction or a sale but a fact finding event. They will not give a reserve. Is that honorbale? NO. We will not be there unless that changes. We believe that the sellers want to guage the interest in the domain.

    Keep in mind that the last selling price is somewhat bogus. If it were never paid in full it did not really sell for that. NO! If someone pays 5M for a house, puts 1M down and defaults, is the house worth 5M? NO.

    What did escom pay for sex.com?. We have heard if was around 5M. That is the last true value of the domain.

    We will bet ANYONE and everyone $1.000 that can be held by Elliot or Berkens and sent to charity that sex.com will NOT sell at this auction to anyone other than the current people invloved, namely, DC, Escom,. Miller or one of their other names or companies.

    How about having some integrity and setting a reserve price before the auction. If they don’t I predict very few bidders.

    The domain is simply NOT worth big money based in potential income. Yes it is a great brand and easy to remember but that is only worth so much. Can the owner count on repeat traffic?

    Maybe but that is a gamble. The adult market is declining. Tubesites are huge. Sex is a negtive word.

    I would rather own and develop Pizza.com.

  14. Ozie Jackson says

    I’m late to this post but I will toss in my two cents anyway. The problem with domainers owning a domain like this is that because they are not end users, with innovative development techniques and ideas ready to implement, the domain languishes and never reaches its potential.

    There is no good reason why Sex.com isn’t among the top 100 most visited sites on the planet other than some wild eyed domainer(s) fucking up a great opportunity. You have sex.com and all you can do with it is sell t-shirts and sex toys? Really? Its like driving your two bags of groceries around in an 18 wheeler.

    Look no further than http://www.cowboys.com as another example of this. The best thing that could happen to this domain is that it is bought by an innovative company in the sex industry for exactly what is owed on the outstanding debt, not a nickle more. If the sale comes out at significantly lower than the previous $14M price, so be it.

    As we all know the porn industry is in the midst of significant adjustment in light of all the free content that’s available. But unlike the music industry, the porn industry has always been at the leading edge of developing and monetizing internet technology. Maybe developing Sex.com into a interactive 3D streaming video site is in order, I don’t know.

    But the last thing I wish for this great domain is for it to end up in the hands of another group of lame ass domainers.

  15. LS Morgan says

    @ DomainsPriceWorldRecord

    “these are not good days for multimillion$ domains… just think that Google hasn’t paid a cent for nexusone.com that’s still owned by Peter Villanueva”

    Actually, I believe that’s a harbinger of what’s to come for keyword domains in general and why centralizing your brand and developing products outward from amaster brand is the way of the future, as far as large scale ecommerce goes. Businesses seem to be much more concerned with going down the path of google.com/phone- thus emphasizing the nexus between the product and the brand- than they are “nexusone.com”.

    Sure, the lucky guy who owned nexusone.com is going to get a metric @ssload of traffic, but is he allowed to profit from that traffic- in it’s most synergistic fashion- without running the risk of having the name jerked for the cost of a UDRP? I don’t know…

    The small online ebusiness is well served by owning great, generic keywords, but “big business” is far more concerned with product issues relating to their brand, which is the exact opposite of whatever benefits are offered by a”generic” name.

    Obviously, from this we can exclude the supernova names that define entire industries, but even in those cases, there are big businesses that can afford to buy them, comprehend their worth yet still choose to focus on branding.

    As time goes on, I’m starting to wonder if the incestuous logic held so dear by the domainer community might not be eventually chalked up under the historical “Good Idea” category, but generally ignored by industry at-large. We’ve been waiting for industry to ‘get it’ for quite some time. As best I can tell, they’re going down an entirely different- and irreversible- path.

  16. says

    How much do you guys think sex.com would make from a parking page per day on average?
    I think porn.com was making around $2000/day from parking page…how much do you think sex.com will make?
    Parking pages are boring…but at the end of the day, it’s all about $$$$$.

  17. MHB says


    Based on its Alexa and Compete traffic estimates much less than $2K per day.

    Porn WAS making reportedly based on its auction price of $7.5M (didn’t sell then but $9.5M months after) 5X.

    But that was a few years ago.

    Now adult parking revenue is well less than 1/2 of that

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