Lender putting www.sex.com domain on auction block

NEW YORK Tue Mar 9, 2010 5:40am IST

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NEW YORK (Reuters) - Sex.com, often touted as one of the most valuable Internet domain names, is due to head to the auction block next week.

DOM Partners LLC, a New Jersey lender that backed a 2006 purchase of the domain name for a reported $14 million, is foreclosing on the Internet property, and is due to auction it on March 18 at New York law firm Windels Marx Lane & Mittendorf LLP, according to legal notices.

Bidding for the Internet property, the tumultuous past of which includes several lawsuits and two books, is due to start at $1 million.

The auctions of simple domain names are seen as rare opportunities for Internet entrepreneurs.

An auction for the www.pizza.com domain name in 2008 attracted bids above $2.5 million.

But if it is true that sex sells, sex.com may be the most valuable domain name in the world. At one point, the website was making at least $15,000 per day, according to a 2008 book, The Sex.com Chronicles, by attorney Charles Carreon who has represented a former owner of the site.

In January 2006, Escom LLC acquired the domain name from Gary Kremen, founder of dating website Match.com and chief executive of Grant Media. Kremen registered the sex.com domain name in 1994.

A press statement announcing the 2006 sale said it was "believed to be among the most significant domain sale transactions in history." Terms of that deal were not disclosed, but it has since been reported that the deal was worth about $14 million.

DOM Partners' loan to Escom for the deal has been in default for over a year.

"The loan was in default and DOM partners is foreclosing pursuant to its right under the security agreement," DOM's attorney Scott Matthews said.

Attempts to reach Escom and sex.com for comment were not immediately successful.

But Richard Maltz, an auctioneer at Maltz Auctions who is running the sale, said on Monday there was considerable interest in it.

"We don't know who's serious and who's not, but prospective bidders need a $1 million certified check. It should be interesting."

Maltz said his firm was arranging for potential buyers to also be able to bid online.

(Reporting by Emily Chasan)

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