The head of Clover Holdings, the buyer of the domain name, Sex.com agreed to do an email interview with TheDomains.com
A couple of housekeeping issues.
I’m obviously going to keep the person’s name confidential.
I’m not going to give out hints as to the person’s identity.
I don’t want the comments to this post to turn into a guessing game and therefore I will delete any comment where there is a guess as to that person’s identity.
Sex.com as you know holds the official Guinness World record as the World’s most expensive domain name, when it was purchased by Clover for $13 Million Dollars late last year.
Here is the Interview:
Q: Why Did did you Purchase Sex.com for a record setting $13Million?
“”We have quietly purchased a number of generic, industry specific domain names, that represent the key term/brand for existing revenue generating online industries, or industries that we expect to have significant online revenues in the future. ”
“This domain fits that model.”
“Frankly, twelve months ago I didn’t know a thing about the Adult space. We’ve looked at a number of mainstream options for the domain (which in some cases, would increase our chances for a public offering or exit), but we’ve now zeroed in on opportunities in the Adult space.”
“As opposed to the mainstream options we looked at (mostly health related and product sales projects), my feeling is that we can build traffic at a much higher rate in the Adult space as the content is simply much more engaging to users. The opportunities we have are very similar, but with different potential experienced partners.”
Q: What do you think the value of sex.com is and is there a price you would sell it for?
“When I originally tried to purchase the domain, privately, the combined pricing for the shares of the various owners, was set around $15.5mm USD.”
“The group’s involved couldn’t get on the same page, and it was clear that without an auction process, I wasn’t going to be able to secure the domain. It is unfortunate for them, because we were willing to meet that price.”
“Through the auction process and afterward (and after having spoken with some of the other bidders in the course of doing due diligence), I have learned from them and SEDO that there were multiple significant offers above $10mm USD, including another $13mm USD offer that included a payment schedule.”
“It is doubtful that we would sell the domain. We purchased this piece of real estate to develop. We are eying a business model that should allow for a complete ROI within 20 months.”
Q: What it the plan for the site within the next year and long term?
“We have a plan.”
“We have searched for talented, experienced partners to help execute that plan.”
“We have narrowed down our options to three companies, and while it has taken a little longer than I expected, extensive due diligence is required with such a valuable domain.”
“We have a development schedule that will allow us to have a significant offering live within six months.”
“I have researched the traffic growth of nearly every large website in the Adult space, and I have specific traffic expectations.”
“The trick at that point, and the reason we have sourced some experienced partners, is to properly monetize that traffic — leaving nothing on the table. Things change in that industry so quickly, we will need to be flexible and be able to LEAD new trends.”
Q: How do you plan to make money in the adult space when so may Adult providers are struggling to stay afloat with all the free adult content available on the Net?
“Ad sales and product sales revenue models, with a few add-on services and a few surprises.”
“Our goal is to provide services that are indicative of the brand, being of equal quality to the top offerings in the adult space.”
“We won’t be trying to reinvent the wheel here, just to do it better than many of the existing players in that industry right now. We can afford to spend significantly on development, providing a superior product. There are a number of partnerships I have begun working on, which I can’t really comment on at this time. I think we will be able to differentiate ourselves from from the other operators”
Q: There has been a lot of speculation on how much traffic this domain actually gets, can you disclose any numbers?
“Traffic is sitting around 100,000-125,000 daily since the purchase, with the US being the a top 5 country, but not top 2.”
“While that is quite significant for a parked page, it is a drop in the bucket in terms of our growth expectations.”
“We should allow your users to guess the traffic number for March 1st 2012, for a prize.”
“I think most will be shocked.”
Q: How do you think the coming .xxx extension will effect the value of sex.com, if there is a sex.xxx for example? What about the possible required migration of adult material to a .xxx extension?”
“I have some specific thoughts, and i would like to keep those to myself at this time. I can tell you that current Adult operators are uniformly opposed to any required migration to any new extension.”
Q: Anything else you would like to add?
“We looked at purchasing the portfolios of some significant domain companies, and took a pass. I don’t have enough confidence in that business model to warrant the pricing. The model has been changing, and we are focused on tier one generic, industry specific single domains that we can develop.”
Q: “When You Say You Don’t Have Enough confidence in that business model Of Big Portfolios Are You Talking About Declining PPC Revenue?
“In some cases, the inventory that I have looked at includes declining revenues in a PPC model.”
“I have no doubt that many of the big domain owners are very astute and can make large portfolios work for them, but I don’t have great confidence in the long-term viability of this business model.”
“You need look no further than an article you posted last week, detailing Google plans to eliminate the address bar from its Chrome browser.”
“If your user cannot find your domain via Google Search Results and behaviour shifts away from the address bar, where does that leave you?”
“This is but one of 20 reasons I have concern about the PPC model in the medium-long term.”
“This Chrome issue alone might not mean much, but it reminds each of us that consumer behaviour is ever evolving and can change very quickly (to the detriment of various business models).”
We thank the new owner of Sex.com for his time and sharing thoughts and of course which him the much success with the site.
If you would like take up the owner on his challenge to place a guess on the monthly traffic levels for Sex.com will have on as of March 1, 2012 we will keep track and get you your “prize”.