So You Just Bought Sex.com For $13 Million – Now What?

http://techcrunch.com/2011/01/04/so-you-just-bought-sex-com-for-13-million-now-what/

by bjonathan • 16 years ago

36 59 16 years ago

Ryan_IRL• 16 years ago

I don't think I've gone to random domains since I was on a 14.4 modem. I find it pretty hilarious that that domain can break even just parked.

pavel_lishin• 16 years ago

I wonder if some of them come from people "searching" from the address bar, or even from search engines?

(Google results for "sex" are kind of funny.)

jrockway• 16 years ago

It's not breaking even, right? The domain was 13 million. It makes "almost 7 figures" a year. So in 13 years, assuming that people still keep visiting a bogus site, it will have paid for the domain registration.

If you just want to break even, you should probably just register a google.com typo domain for $20, and then you need a lot fewer visitors to break even.

dotcoma• 16 years ago

Sell it for $15 million to someone who is more of a sucker than you are.

Isn't that the same plan Goldman Sachs has for its 'investment' in Facebook?

iwwr2• 16 years ago

Groxx• 16 years ago

http://theinternets.com

* gasp * someone bought The Internets! All of them! What'll we do?!

mattsidea• 16 years ago

does anyone have any idea what i could use shag.me brought it a few years ago when the .me come about but still dont have any idea what could be a good idea for a site all ideas welcome,

thank you

matt

levigross• 16 years ago

1. Open up a website for students. Student EXchange = sex.com 2. Stack EXchange can get a shorter name or use them as a short URL.

melvinram5• 16 years ago

I would go with a reoccurring membership porn site.

125k daily visitors x 1% conversion rate = 1250 new customers per day

1250 new customers per day x 365 days in 1 year = 456,250 new customers per year (reached at the end of the first year)

456k new customers per year x $120/year in revenue (assuming $10/month) = $54.7mil per year in revenue

(though the math isn't fully accurate since it doesn't take into account churn but it works to illustrate a point.)

With a tiny bit more brains, you could take that up to $100mil/year, prove the stability of the revenue and sell for 10x of revenue at a cool $1 Billion Dollars (Dr. Evil pinky finger lift)

Obviously it's much easier to be an armchair quarterback and pull numbers out of thin air than to execute and create real value.

InclinedPlane• 16 years ago

What justifies assuming a 1% conversion rate?

How many people do you run into walking around town, what would justify a 1% conversion rate in selling products to them? Just because 1% seems small does not mean it's a guaranteed conversion rate.

jacquesm8• 16 years ago

1% would be a very badly converting adult site so I would think that would be an ok assumption.

melvinram5• 16 years ago

I don't have anything specific in the adult industry to base my assumption on but it's based on looking at the conversion rate of many sites in many different industries. 1% seems to be the low-end of what a site can convert at if you do the basics right. But I'll admit it's an assumption that needs to get tested.

rorrr4• 16 years ago

You consider you'd get 125K new daily visitors, while in reality it's probably (mostly) the same people visiting the site.

melvinram5• 16 years ago

Yep, it's an assumption that would need to be tested and considered.

cloudwalking• 16 years ago

Why would people come back to a landing page littered with ads, more than once every few months?

pier0• 16 years ago

I suspect it's not that easy or the previous owner could have restructured the business and its debt instead of declaring bankruptcy. Truth is there is no money left in sex/pornography.

il3• 16 years ago

Make it an adult dating site...it has the makings of a strong brand.

The significant type-in traffic will help get over the network effect issues that plague most dating sites, and your traffic is very targeted- people looking for sex(or at least naughty pics). So you'll quickly have a core of active users you can leverage to build your audience.

Dating sites done right are FAR more profitable than porn sites.

melvinram5• 16 years ago

Honest question: Got any numbers to illustrate that last point?

il3• 16 years ago

Sure: Here are some numbers based on affiliate network stats, from the affiliate side:

Amateur Match conversion rate is between 14-22%, paying out an average EPC between $0.70-$1.07.

If they can afford to pay more than $1 per click and still be highly profitable, I assume they're converting free users to paid/upselling quite well.

If someone remains a member an average of 3 months at $30/month, you're looking at a CLV approaching close to $100.

matwood• 16 years ago

Dating sites done right are FAR more profitable than porn sites.

That seems odd to me because if the dating site works people will not be coming back.

tomjen3• 16 years ago

Elsewhere they say the industry standard is 3 months average length of a membership. It properly takes that long (maybe not consecutive) if not more for somebody to get of the dating market permanently. A porn site has little chance of going viral (who wants their facebook status to be "John is browsing cocksuckersluts.com"?) and almost no chance of an upsell - but I know that people share recommendations of online dating sites and when there they are an excellent place to send people to other partners (looks like you are going on a date! Do you want to buy flowers and reserve a table for two at a romantic dinner?) something that is not likely to happen on a porn site.

barclay2• 16 years ago

> if the dating site works

That's a mighty big if. Especially for an adult dating site, where I'd guess the guy/girl ratio would be at least 500:1.

staticshock• 16 years ago

The reason he doesn’t simply jump into the lucrative online porn industry? Because such an endeavor would close the door on other, more mainstream options, narrow down his exit possibilities – such as selling to a public company – and limit the ability to take the business public in the future, Jeff says.

I've noticed recently that most porn businesses are, in fact, private. The TechCrunch article alludes to this as obvious, but to me it is not. What would be the obstacles to taking a porn business public?

jacquesm8• 16 years ago

> What would be the obstacles to taking a porn business public?

Nothing, really:

http://www.forbes.com/forbes/1999/0614/6312214a.html

neworbit2• 16 years ago

I don't think you're likely to contest that 1999 was an easier time for IPOs.

Private Media and Playboy are both public. And unprofitable. And not especially worth all that much these days; you'd have a hard time getting a "real" IPO done even at Playboy's 180M market cap, let alone Private's 20M valuation.

codingthewheel• 16 years ago

Single-word domains from the common vocabulary usually make for shitty brands.

Probably because business efforts behind these domains are rather transparently profit-seeking and wired for the short-term, make a quick buck, approach.

Also there's a good amount of technological quackery that goes on in the hyping of these domains to not-so-tech-savvy investors who don't realize that a typical 14yo kid understands intuitively that "sex.com" is probably a crap parked site or link directory, whereas pornhub.com, on the other hand, provides a service that 14yo will love.

"..and we've got a GREAT domain name, pets.com, I mean, if you want a pet, where you gonna go? We're right there."

Labors of love are what win and enable you to eventually fleece your customers and have them thank you for doing it -- not having a 13 million dollar domain.

puredemo3• 16 years ago

Are there any single, common word domain brands that have been successful? I can't think of a single one.

aberkowitz• 16 years ago

From what I understand, Diapers.com is a highly successful business. Their parent company Quidsi, who also owns Soap.com, was recently acquired by Amazon for $540 million.

bbuffone• 16 years ago

I would re-open the craigslist.com "Adult" section.

klbarry• 16 years ago

Actually, that's a great idea - making a version of this at sex.com, with ads, could be amazingly lucrative.

iwwr2• 16 years ago

But don't base it from the US.

vaksel• 16 years ago

Sex.com doesn't seem to be that lucrative of a domain name(not 13mm lucrative)...if it was, more companies would try to rank for the term sex.

right now it's

  1. Wikipedia Article
  2. FBI Sex Offender Registry
  3. Psychology article
  4. Porn Tube Site
  5. HIV charity
  6. Virginia State Police Sex Offender Registry
  7. Music Review Blog
  8. Sex Pistols music site
  9. Georgia Sex Offender Registry
  10. Center for Sex Offender Registry

I'd bet there is a ton of traffic because people just want to see what kind of site is hosted on sex.com, so its a lookie loo situation, where you'll have a crappy conversion rate. So a traditional porn site won't work that well.

A better option would be to open a casual encounters type site(basically adult friend finder), and charge $5-10-20 bucks a month under the guise of making sure that there are no fake profiles.

grzaks• 16 years ago

Don't you think google threats porn/sex sites kinda different than others? I bet non-porn sites rank better for non-porn keywords than porn sites ('sex' is not necessarily porn keyword). And there is nothing porn SEO experts can do about it.

rorrr4• 16 years ago

How can you possibly go bankrupt with a domain name like that?

You would have to hire a very expensive team and completely mismanage your funds.

It's a goldmine. You're pretty much guaranteed to get traffic.

elliottkember• 16 years ago

Wait until the next stupid bubble and sell it for a profit. Easy money.

MoreMoschops• 16 years ago

The last time I paid for sex it only cost me dinner and my self-respect. I bet you get a really good time for $13 Million :p

mattblalock3• 16 years ago

The owner's no dummie, but dang, maybe a little more planning?

How about they just buy my company (or hell, hire me), rebrand to sex.com, advertise mainstream utilizing a real ad agency, and easily turn in 20-30 million over the next 3 years.

puredemo3• 16 years ago

Your domain name seems extremely sub-par for how high quality your site is.

I messed around for a few minutes and came up with:

  funtickle.com
  meowsex.com

Not sure if those are any better, but just wanted to see what was out there. ;)

mattblalock3• 16 years ago

It is one of my biggest weaknesses, but I figured once I'd proven it possible with whatever domain, I could search out another one. It's in my plan for this year, begin investigating new domains... neither of those seem very fitting, but thanks for considering it!

404error• 16 years ago

How about anonymous postings of sex encounters/sex fantasies?

mattblalock3• 16 years ago

If I had 125k more visitors a day, I'd make around $272,100 a day.

puredemo3• 16 years ago

I'd go with a daily blog style page, something like "Today's Big Thing," but sex-related. Fresh daily content guarantees you a recurring audience and makes it so you potentially only need one employee, the editor.

jyu• 16 years ago

The most obvious ideas are porn site, adult dating site, etc. The biggest challenge is figuring out the highest and best use. I think the best use is turning sex.com into the authoritative site for sex questions / videos. With this approach, you can get a captivated audience and build a lasting brand.

Sex is something we all want to know about, but it is still taboo to publicly talk about in the US, UK, India, etc. I notice other posts mentioning developing a porn site, or adult dating site, but those seem like low hanging, 1-off sales. By building a brand, you can generate a higher customer LTV. If the owner of sex.com can afford to pay $13 million, he should be able to afford several million to develop expert content, products, and a long term business.

To give you insight in the value of creating a product company, look at Bill Phillips who acquired EAS in 1996, and solid it for $160 million in 1999. http://www.ergogenics.org/231.html

So You Just Bought Sex.com For $13 Million – Now What?

Related Stories