Re: The Sex.Com Chronicles, by Charles Carreon
Posted: Fri Jun 13, 2014 1:58 am
WITH FRIENDS LIKE THESE, PART 2
We met Yishai in a very stylish, expensive Manhattan bar and restaurant with sky-high prices. He’s a handsome Israeli man, partial to dark suits, and according to Sue Whatley, our ear on the street, the subject of mafia jokes. Ron Levy seems to take particular pleasure in murmuring that he never speaks ill of Yishai because he doesn’t want to sleep with the fishes.
The night we arrived, Gary and I were to meet Yishai at a very fancy restaurant where Gary surprised me by knocking back several large gin and tonics, while I drank a few beers. Yishai didn’t drink alcohol, and had an apologetic air, as if it were unfortunate that the world forced us to think about money all the time, but what was there for it? The evening was pure socializing, and we barely discussed business. He is a classical pianist, and seemed to have a protective attitude toward his wife. We exchanged a lot of platitudes about family values. When we parted, I felt like we had gone into business with a very serious man who had favored me with his most charming aspect. He wore his gentility like a protective suit for navigating the dark waters of sexual finance.
The next morning, Gary and I walked to a building not far from our hotel. Yishai met us in an upstairs office where he said they were opening up some new space to accommodate rows of computer desks. In a large, sparsely furnished conference room, Yishai and two assistants, a couple of former Mossad guys, gave us a presentation that projected live feeds from a high-speed Net connection on a big screen. They provided us with detailed statistics about our site that amazed me with their specificity and abundance. Type-ins were cascading into those magical six letters like rain into a mountain lake, a lake of pure liquid cash. It was dizzying. It was exciting. It was partly mine, and everyone acted like I was a co-owner of a very desirable asset.
But in the midst of the exhilaration, a dark tinge invaded my mind, and grew deeper as the hours passed surfing the Net on the enormous browser in Yishai’s Manhattan conference room. The big screen shimmered with the energy of millions of minds cascading in from everywhere, colliding with the images and words that populated Sex.Com. From our digital vantage-point, online humanity appeared as a vast throng of eyeballs speeding through a functionally infinite universe of colors, images, text, and video. The statistics Yishai provided showed nearly a million hits daily, sorted by the equivalent price per click being charged to each of the short list of buyers, some of whom were in for $50,000 per month.
The statistics also told a dark story. Although the site was nominally under our control, we were still selling traffic to the same people who had been buying traffic from Cohen, except for Jordan Levinson, whom Gary had insisted on dropping at once, rejecting Yishai’s entreaties on his behalf. The largest advertisers were Wired Solutions, Yishai himself, and Ron Levi, who had been buying traffic from Cohen through a straw man when we took over the domain. They were all running the same gross-out contest that had evolved during the Cohen days, a race in which graphic artists competed to find the lowest common denominator of human desire. Was it a fresh face receiving a rain of semen from a rigid penis all over her innocent face, splattering her eyes, and cheeks, matting her lovely young hair with slime? Perhaps it was a short video clip of an anal sex routine accelerated just a bit and pinched into a three-second loop. There were so many ways to say the same thing, and Sex.Com was the only place pornographers could say it to the whole world, without restraint. Yishai believed in Cohen’s stupid, direct approach, and feared any attempts to improve on it. Although Ocean Fund press releases had once crowed about a website “a thousand pages deep,” Cohen had actually kept the website to one page, with six banners costing fifty-thousand dollars each, and a single row of text links that sold for between six and nine-thousand dollars apiece. The one-page banner-farm format kept the cyber-real estate scarce, and accordingly expensive. Cohen set his rates, then let the industry integrate his charges into their pricing. Levinson said that with Cohen, it was always “his way or the highway.” All advertising revenues were paid in advance by wire transfer, and gratefully so. Serious pornographers were happy to pay for the traffic, especially those with the graphics skills and large image libraries to deploy the smut wonderlands that took the millennium by storm. Cohen had also given advertisers total freedom to post any picture or text link they thought would score a click, which kept the advertiser’s conversion rates high, and ad rates similarly so. You might say that, by combining totally free speech with a completely free market, Cohen had found the sweet spot at the top of the profit pyramid. Certainly Yishai’s report, with its short list of big numbers, made it clear that the status quo at Sex.Com was very profitable.
Cohen’s version of Sex.Com was popular for another reason that fans of open markets might appreciate -- the lack of intrusive government regulations. Cohen had never reported any of his transactions to the IRS, the Treasury Department, or any other agency of government. This leads to the possibility that some of the millions of dollars that Cohen had pumped through the Omnitec account was simply being laundered from various illicit sources, and may not have reflected real advertising revenue. After all, even AOL had to admit to doing hundreds of millions of dollars in “wash” advertising deals that were simply a way to kite checks for astronomical sums. Cohen was always dabbling in ways to inflate his income and skim a profit, and he wouldn’t have blushed at the opportunity to launder a few bundles of drug or gun money. This might account for occasional fluctuations in Sex.Com’s monthly revenue, like the month in 2000 when Omnitec received a million in deposits, a substantial upward deviation from the standard 400K. So you never know -- maybe Cohen really did have some friends in Caracas who were gunrunners -- I never went to see.
Even discounting total Sex.Com revenue somewhat for the possibility that Cohen was actively exchanging black money for white, there were plenty of real clicks being sold to pornographers for their conversion value. In those days, before Google had gone into the business of selling clicks, the term “conversions” was heard almost exclusively in porn circles. Conversions, as most every person knows now, are simply sales, cash transfers via credit card for website signups, that in those days usually cost $20 to $30 dollars each before merchant fees. Profit is calculated based on a simple formula, because certain website traffic will convert at an ascertainable rate. Some traffic is utter garbage from a pornographer’s viewpoint -- converting at low rates, or not at all. The question is, of course, who is doing the clicking? And in the case of people seeking pornsite conversions, how old is that person, and what is their sex? According to Fernando of Wired Solutions, Sex.Com traffic converted at unheard-of rates, suggested to him that the bulk of visitors were young and sexually inexperienced, typing in the most obvious Internet address to find the object of their desires. In the aggregate, they were clicking at the rate of around 200 clicks per second, and converting at rates sometimes as high as one out of fifty -- an unheard of rate during a time when conversion rates of one in two-hundred and fifty were considered extremely profitable. Fernando was a corpulent Latino whose face filled with delight when discussing the unbelievable conversion rates he had seen with Sex.Com traffic. It made me quite uneasy.
When we met in New York to formally sign the hosting and commissions deal with Yishai, we discussed ending the gross-out contest still taking place on the page. Since such agreements don’t always look right when you put them in writing, we verbally agreed that within thirty days, advertisers would no longer be allowed to display “penetration” or “girls who look underage.” We agreed to immediately stop running text links that smacked of criminality or conduct generally acknowledged to be depraved, like incest and bestiality. Aside from these small adjustments, we weren’t changing the site at all. We were afraid to scare off advertisers, and since the word on the street was unclear about Gary, we needed to reassure the markets. Yishai wanted to pour a pitcher of ice water on the idea that Sex.Com might become a “woman friendly” site, as we had suggested in our press release and court filings. Haha, very funny! As Steve Sherman had told me during our breakfast meeting -- “Get real, this is pornography!” The end result of the meeting with Yishai was that the Cohen format stayed in place. One page of banner ads, a list of advertisers you could count on two hands, and pure profits of at least $400,000 per month. Not a formula you want to tinker with.
Toward the end of the day, Yishai took us to meet his boss, Richard Martino. They talked about how their company, Crescent Communications, was about to buy a midwestern phone company. They took us on a very boring facilities tour, which consisted of views of eight accountants housed like cattle with their computers, calculating all day long. On the way out of our meeting with Richard, Yishai pulled me aside. They would be happy to pay $15,000,000 for the name -- half now, the rest in payments.
Back in the hotel room Gary and I were occupying jointly at Yishai’s expense, I told Gary that Yishai had offered to buy the domain. He responded as I’d expected, utterly disinterested, and said he was going out. I was alone in New York City. I took a shower. I lay in the tub, letting the numberless drops cascade off my body into the narrow beige porcelain concavity. The hotel tub was small and cramped in the supposedly fancy hotel. Apparently, regardless of how much money we were going to have, Gary would still be extremely parsimonious, and the facilities could still be banal.
But I had a much bigger problem. All the money in the world would not change the fact that I was getting rich on the exploitation and degradation of women. I was very tired, and felt like crying as I lay in the tub, feeling that every drop of water was a click of someone accessing an image of some girl being photographed forever like a captive animal, and some poor sucker’s cash rolling down the drain. I felt like the sewer, collecting all those unwanted moments and mistakes made by young, foolish people with basic needs for love and money. I felt for the women and men, embracing each other lovelessly, doing things they’d balk at doing at gunpoint, just for a little cash. I felt like I was riding with my rich friends on an ocean liner floating on a sea of garbage. I lay in the tub a long time, wasting water and listening to it gurgling down the drain.
We met Yishai in a very stylish, expensive Manhattan bar and restaurant with sky-high prices. He’s a handsome Israeli man, partial to dark suits, and according to Sue Whatley, our ear on the street, the subject of mafia jokes. Ron Levy seems to take particular pleasure in murmuring that he never speaks ill of Yishai because he doesn’t want to sleep with the fishes.
The night we arrived, Gary and I were to meet Yishai at a very fancy restaurant where Gary surprised me by knocking back several large gin and tonics, while I drank a few beers. Yishai didn’t drink alcohol, and had an apologetic air, as if it were unfortunate that the world forced us to think about money all the time, but what was there for it? The evening was pure socializing, and we barely discussed business. He is a classical pianist, and seemed to have a protective attitude toward his wife. We exchanged a lot of platitudes about family values. When we parted, I felt like we had gone into business with a very serious man who had favored me with his most charming aspect. He wore his gentility like a protective suit for navigating the dark waters of sexual finance.
The next morning, Gary and I walked to a building not far from our hotel. Yishai met us in an upstairs office where he said they were opening up some new space to accommodate rows of computer desks. In a large, sparsely furnished conference room, Yishai and two assistants, a couple of former Mossad guys, gave us a presentation that projected live feeds from a high-speed Net connection on a big screen. They provided us with detailed statistics about our site that amazed me with their specificity and abundance. Type-ins were cascading into those magical six letters like rain into a mountain lake, a lake of pure liquid cash. It was dizzying. It was exciting. It was partly mine, and everyone acted like I was a co-owner of a very desirable asset.
But in the midst of the exhilaration, a dark tinge invaded my mind, and grew deeper as the hours passed surfing the Net on the enormous browser in Yishai’s Manhattan conference room. The big screen shimmered with the energy of millions of minds cascading in from everywhere, colliding with the images and words that populated Sex.Com. From our digital vantage-point, online humanity appeared as a vast throng of eyeballs speeding through a functionally infinite universe of colors, images, text, and video. The statistics Yishai provided showed nearly a million hits daily, sorted by the equivalent price per click being charged to each of the short list of buyers, some of whom were in for $50,000 per month.
The statistics also told a dark story. Although the site was nominally under our control, we were still selling traffic to the same people who had been buying traffic from Cohen, except for Jordan Levinson, whom Gary had insisted on dropping at once, rejecting Yishai’s entreaties on his behalf. The largest advertisers were Wired Solutions, Yishai himself, and Ron Levi, who had been buying traffic from Cohen through a straw man when we took over the domain. They were all running the same gross-out contest that had evolved during the Cohen days, a race in which graphic artists competed to find the lowest common denominator of human desire. Was it a fresh face receiving a rain of semen from a rigid penis all over her innocent face, splattering her eyes, and cheeks, matting her lovely young hair with slime? Perhaps it was a short video clip of an anal sex routine accelerated just a bit and pinched into a three-second loop. There were so many ways to say the same thing, and Sex.Com was the only place pornographers could say it to the whole world, without restraint. Yishai believed in Cohen’s stupid, direct approach, and feared any attempts to improve on it. Although Ocean Fund press releases had once crowed about a website “a thousand pages deep,” Cohen had actually kept the website to one page, with six banners costing fifty-thousand dollars each, and a single row of text links that sold for between six and nine-thousand dollars apiece. The one-page banner-farm format kept the cyber-real estate scarce, and accordingly expensive. Cohen set his rates, then let the industry integrate his charges into their pricing. Levinson said that with Cohen, it was always “his way or the highway.” All advertising revenues were paid in advance by wire transfer, and gratefully so. Serious pornographers were happy to pay for the traffic, especially those with the graphics skills and large image libraries to deploy the smut wonderlands that took the millennium by storm. Cohen had also given advertisers total freedom to post any picture or text link they thought would score a click, which kept the advertiser’s conversion rates high, and ad rates similarly so. You might say that, by combining totally free speech with a completely free market, Cohen had found the sweet spot at the top of the profit pyramid. Certainly Yishai’s report, with its short list of big numbers, made it clear that the status quo at Sex.Com was very profitable.
Cohen’s version of Sex.Com was popular for another reason that fans of open markets might appreciate -- the lack of intrusive government regulations. Cohen had never reported any of his transactions to the IRS, the Treasury Department, or any other agency of government. This leads to the possibility that some of the millions of dollars that Cohen had pumped through the Omnitec account was simply being laundered from various illicit sources, and may not have reflected real advertising revenue. After all, even AOL had to admit to doing hundreds of millions of dollars in “wash” advertising deals that were simply a way to kite checks for astronomical sums. Cohen was always dabbling in ways to inflate his income and skim a profit, and he wouldn’t have blushed at the opportunity to launder a few bundles of drug or gun money. This might account for occasional fluctuations in Sex.Com’s monthly revenue, like the month in 2000 when Omnitec received a million in deposits, a substantial upward deviation from the standard 400K. So you never know -- maybe Cohen really did have some friends in Caracas who were gunrunners -- I never went to see.
Even discounting total Sex.Com revenue somewhat for the possibility that Cohen was actively exchanging black money for white, there were plenty of real clicks being sold to pornographers for their conversion value. In those days, before Google had gone into the business of selling clicks, the term “conversions” was heard almost exclusively in porn circles. Conversions, as most every person knows now, are simply sales, cash transfers via credit card for website signups, that in those days usually cost $20 to $30 dollars each before merchant fees. Profit is calculated based on a simple formula, because certain website traffic will convert at an ascertainable rate. Some traffic is utter garbage from a pornographer’s viewpoint -- converting at low rates, or not at all. The question is, of course, who is doing the clicking? And in the case of people seeking pornsite conversions, how old is that person, and what is their sex? According to Fernando of Wired Solutions, Sex.Com traffic converted at unheard-of rates, suggested to him that the bulk of visitors were young and sexually inexperienced, typing in the most obvious Internet address to find the object of their desires. In the aggregate, they were clicking at the rate of around 200 clicks per second, and converting at rates sometimes as high as one out of fifty -- an unheard of rate during a time when conversion rates of one in two-hundred and fifty were considered extremely profitable. Fernando was a corpulent Latino whose face filled with delight when discussing the unbelievable conversion rates he had seen with Sex.Com traffic. It made me quite uneasy.
When we met in New York to formally sign the hosting and commissions deal with Yishai, we discussed ending the gross-out contest still taking place on the page. Since such agreements don’t always look right when you put them in writing, we verbally agreed that within thirty days, advertisers would no longer be allowed to display “penetration” or “girls who look underage.” We agreed to immediately stop running text links that smacked of criminality or conduct generally acknowledged to be depraved, like incest and bestiality. Aside from these small adjustments, we weren’t changing the site at all. We were afraid to scare off advertisers, and since the word on the street was unclear about Gary, we needed to reassure the markets. Yishai wanted to pour a pitcher of ice water on the idea that Sex.Com might become a “woman friendly” site, as we had suggested in our press release and court filings. Haha, very funny! As Steve Sherman had told me during our breakfast meeting -- “Get real, this is pornography!” The end result of the meeting with Yishai was that the Cohen format stayed in place. One page of banner ads, a list of advertisers you could count on two hands, and pure profits of at least $400,000 per month. Not a formula you want to tinker with.
Toward the end of the day, Yishai took us to meet his boss, Richard Martino. They talked about how their company, Crescent Communications, was about to buy a midwestern phone company. They took us on a very boring facilities tour, which consisted of views of eight accountants housed like cattle with their computers, calculating all day long. On the way out of our meeting with Richard, Yishai pulled me aside. They would be happy to pay $15,000,000 for the name -- half now, the rest in payments.
Back in the hotel room Gary and I were occupying jointly at Yishai’s expense, I told Gary that Yishai had offered to buy the domain. He responded as I’d expected, utterly disinterested, and said he was going out. I was alone in New York City. I took a shower. I lay in the tub, letting the numberless drops cascade off my body into the narrow beige porcelain concavity. The hotel tub was small and cramped in the supposedly fancy hotel. Apparently, regardless of how much money we were going to have, Gary would still be extremely parsimonious, and the facilities could still be banal.
But I had a much bigger problem. All the money in the world would not change the fact that I was getting rich on the exploitation and degradation of women. I was very tired, and felt like crying as I lay in the tub, feeling that every drop of water was a click of someone accessing an image of some girl being photographed forever like a captive animal, and some poor sucker’s cash rolling down the drain. I felt like the sewer, collecting all those unwanted moments and mistakes made by young, foolish people with basic needs for love and money. I felt for the women and men, embracing each other lovelessly, doing things they’d balk at doing at gunpoint, just for a little cash. I felt like I was riding with my rich friends on an ocean liner floating on a sea of garbage. I lay in the tub a long time, wasting water and listening to it gurgling down the drain.