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The Man Who Would Be the Dot-XXX King


How ICM became the one place to buy dot-xxx Web addresses

The Internet has made Stuart Lawley a wealthy man. In 1999 he got rich by taking a British Internet service provider public. The London Sunday Times has named him one of the 1,000 richest people in Britain.

Now he's poised to make his next fortune selling Internet addresses to pornographers. Late last month the Internet Corporation for Assigned Names and Numbers (ICANN), an international body that manages Web addresses around the world, gave preliminary approval for Lawley's application to be the sole registry of Internet domains that end in dot-xxx.

If Lawley's bid is approved—ICANN's next board meeting is in December—he says his company, ICM Registry, stands to bring in $200 million a year selling Web addresses at $60 a pop. That's six times the going rate for dot-com and dot-net addresses, but in line with niche domains such as dot-travel and dot-jobs. Lawley also has plans to open a payment business similar to PayPal for dot-xxx sites, which he says could process $3 billion to $4 billion in transactions a year. "It was crystal clear that a domain for the adult industry was going to be very successful," says Lawley, who now lives in Jupiter, Fla.

Lawley first tried to get ICANN to recognize dot-xxx as a domain in 2004. ICANN Chairman Peter Dengate Thrush says the organization rejected Lawley's application because he didn't have enough support in the adult-entertainment industry. Six years, $6 million in legal fees, and a lot of porn-industry lobbying later, an independent arbitrator ruled that ICANN had acted improperly in rejecting the proposal, clearing the way for Lawley's dot-xxx ambitions.

Lawley, who is otherwise uninvolved in the pornography industry, says he plans to regulate the domain through a seven-person board, including seats reserved for porn industry players, privacy experts, and child-protection and free-speech advocates. He says making dot-xxx a clearly defined zone for adults out of the reach of minors and as free as possible from fraud or malicious computer viruses will make it a more appealing venue for consumers. That, he hopes, will attract businesses who'll buy domain names from him. "The adult industry has tended to work in isolation," says Lawley. "Most of them operate legal sites and take reasonable [precautions], but nobody knows that. Under dot-xxx, everyone will know that."

An unlikely alliance has formed against Lawley. Christian groups such as the Family Research Council oppose the dot-xxx initiative because it legitimizes porn. And some adult sites say it will add to operating costs and open the industry to more regulation. "It's a business annoyance for us," says John Sander, vice-president of marketing and business development at Kink.com, which shoots bondage films in a converted San Francisco armory.

Sander has already begun preregistering dot-xxx versions of Kink's "several thousand" Web addresses (30 main sites, plus misspellings and any other permutations that might bring traffic) with ICM Registry to make sure no one else snatches up the company's brands. Yet Sander still worries about what corraling his company into a corner of the Internet could mean down the road. "It's a red flag," he says. "This looks like a step toward the end goal of censorship."

The bottom line: ICM Registry says its position as the sole purveyor of dot-xxx addresses may bring it $200 million in sales per year.

Galante is a reporter for Bloomberg News. With reporting by Kristen Schweizer.

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