Hite was beginning to warm to the idea the more Cohen explained it. Plus, as Hite put it, having two women on the board would bode well for the brothel and, as she later said, “make sure it was all kept very clean.” There was the matter, of course, of raising the $7 million. Where was Cohen planning to get that from? Again, he had all the answers. He wanted to take the brothel public. That’s right, he went on, the Wanaleiya IPO.
Cohen handed out glossy brochures he’d already prepared: which had the glistening torso of a bikini model on the front. There were charts explaining the financials. California investors with at least $100,000 in income or a net worth of $500,000 could buy in for a minimum of $2,000. The proceeds from the $1 million penny stock offering would go toward marketing, architectural work, securities underwritings, and, he estimated, $85,000 for a “resort theme product line,” including “quality fine art reproductions and small collectibles.” Another public offering would follow to raise the rest of the $7 million needed to buy Sheri’s Ranch.
But that wasn’t all, Cohen went on. There was Sex.com. Though he hadn’t done anything yet with the domain, the trademark rights alone, he told them, would be worth millions. The internet gold rush, he was convinced, would be fueled by the same thing that had driven humanity for eons: the desire for sex. The trademark assets of Sex.com, he went on, could raise the innate value of the IPO—and allow them to make the fantasy island real. So he proposed a deal: he would transfer the ownership of the Sex.com domain to Sporting House Management in exchange for $2 million down the line. With everyone agreed, Cohen proceeded with the plan—and arranged for a future board meeting at a nearby Olive Garden restaurant.
On January 30, 1996, Cohen announced the IPO in a press release touting how Wanaleiya would “accommodate, at 100% capacity, 500 female companions for 300 patrons. The Company plans to offer full guest access to the resort and its amenities for a single fee of $7,000.00 per weekend.” The company issued shares on a certificate illustrated wth a nude bathing Greek goddess, with the name Wanaleiya written in script underneath, along with “the ultimate resort.” Plans were already in motion to bring the concept to a real island in the sea. “At present, the Company is negotiating the acquisition of an entire island in the Caribbean for the purpose of developing the Ultimate Fantasy Island,” the press release went on. “Imagine, being able to buy your own condominium on Fantasy Island.”
“Gaming industry visionaries faced cognitive dissonance resistance when they first arrived in Las Vegas in the 1950s, we may well encounter the same,” Cepinko stated in the release. “The American woman has come a long way. In recent times she has freed herself from antiquated, social prejudices and is more self-sufficient in determining her choices. Most of the women we meet express a positive view of the resort. As a matter of interest, we have received an extraordinary number of requests to develop a future adult fantasy resort just for women. We are taking up the concept in earnest.”
The prospectus went online at Cohen’s new site, www.sex.com. “Purchase stock in a REAL WHOREHOUSE!” it read, alongside photos of naked women and the flashing promise of the phrase: “You will have sex soon!” The others on the board took comfort that Cohen, the man they believed to be an experienced lawyer, included warnings to investors that, despite the bullishness, this was no sure thing. “The securities offered hereby involve a high degree of risk,” one read, and another: “Purchase of these securities should be considered only by those persons who can afford to sustain a total loss of their investment.” But Cohen’s lavish descriptions of a private airstrip, twenty-four waterfall lagoons, and twelve manicured gardens couldn’t mask what he was offering: an international coterie of prostitutes. “Even in a bull market,” cautioned USA Today, in an item about the project, “it will be a tough sell.”
Despite the small investments from the board’s family and friends, skepticism grew. George Flint, a lobbyist and spokesman for the Nevada Brothel Owners Association, told the Orange County Register that their plan “would never work. It doesn’t make any sense,” he said. “It’s too far from Las Vegas. You don’t mix conventioneers and the brothel business. They were going to import women from foreign countries—that means green cards and immigration—to be prostitutes?”
Before long, Miltenberger grew doubtful too. Every time he asked for the $7 million, Cohen seemed to have an excuse. “I’d say, ‘Cohen, where’s the money?’ and he’d say, ‘next week,’ he was going on vacation,” Miltenberger told a reporter for the Register one afternoon while on his yacht outside San Diego. “I’d say, ‘Cohen, where’s the money?’ and he’d say he was sick and going in the hospital.” The last straw came when he went out for dinner and drinks with Cohen—only to have the wannabe sex mogul stiff him on the check. By summer, Miltenberger pulled the deal. “They were supposed to come up with the money. They never did,” he said, “so we canceled their option. We told them unequivocally ‘no.’ Sheri’s Ranch is not for sale to them at any price. I want nothing to do with them.”
Cohen’s dream of a fantasy island was dead. When Cepinko was later asked by a lawyer during a subsequent court case, at what time did she realize her stock in Sporting House was worthless, she replied, “The day he handed it to me.”
“Really?” The lawyer demurred. “Did you figure it was some vast smoke-blowing activity?”
“It was Steve Cohen,” she said.
Once again, Cohen found himself empty-handed. No empire. No board. No millions. But he did have something. When the IPO and the corporation fell apart, so did the deal for Sporting House to buy the Sex.com domain for $2 million. The coveted site was still his. For all his faults, Cohen had one admirable quality: his resilience. He’d found new wives, new ventures, new innovations. He had already invented online dating, he told himself, imagine what he could do now, on this great new frontier of the web, with Sex.com. And no one was going to stop him.
* * *
While Cohen was finding himself on his own by early 1996, so was the other guy who called himself the inventor of online dating, Gary Kremen.
Since his initial, ill-fated run-in with Steve Cohen over Sex.com, which he decided to deal with when he had the time, all of his attention was consumed by running Match. The site was barreling toward 100,000 members—enough to soon start charging for subscriptions at a rate of $7.95 per month. With $7.5 million in a second round of venture and corporate capital from Canaan and others, the company took over another floor of their office building in South Park, which was now attracting more and more dot-coms hoping to become the next Netscape.
But Kremen relished that, this time, he was in the lead. More and more companies were launching online—Amazon, for books, Craigslist, for classifieds, eBay, for used goods. Sponsors were lining up on Match to help drive up subscriptions—Joe Boxer, Godiva, Clinique, and others. Deals were struck to distribute Match through major media sites, including Women’s Wear Daily and the New York Daily News. For Kremen, it felt like he was finally living the dream he’d been angling for since his days selling Playboys and Hubba Bubba in Lincolnwood.
With a salary of $80,000, a lot to him at the time, he could finally start paying off his student loans, and socking away cash. And he was even finding love himself. He’d met a girl, offline, whom he’d been dating. She was feisty, a feminist who balked at wearing lipstick because, as she told him, “it’s like putting a vagina on your mouth, and it’s a symbol of male oppression.” Getting approval from his mother, Harriett, though, remained elusive. When he showed her a story about him in Forbes magazine, she said, “What about The Wall Street Journal?”
She wasn’t the only one giving him a hard time. So was the Match.com board. Though Kremen was the chair, he was feeling besieged. He saw this as a media company, they saw it as a technology company. They wanted to sell their software to newspapers, who could use it for their own classifieds. But Kremen felt this was a losing plan. At first, he played along, taking meetings with major newspaper publishers, who didn
’t even seem to understand the internet. Kremen would show them screenshots of Match, since they weren’t often online—but they just scrunched their faces in confusion. He returned to his board, disgusted and dismissive. “They’re a slow-moving dinosaur,” he said. “They’re road kill.” The board just looked at him like he was a punk kid. “Oh, they’ve been around for a hundred years,” he’d hear in return. “They’ll be around for another hundred years.”
Kremen thought some of the board members were painfully out-of-touch if not homophobic. Knowing around 10 percent of Match members were coming from the gay and lesbian community, Kremen wanted to expand into that market—but the board balked. He tried to appeal to their greed. “Look, let’s talk about business here,” he’d say. “This is an underserved market.” But they wouldn’t budge. This only cemented Kremen’s disdain over having to answer to others. “Guys with gold make the rules,” he’d say.
Torn between his own visions and the realities of the board, the stress started getting to him. He began lashing out at employees, shouting, insisting on going over and over the slightest details of the site. He’d tacked a flowchart on his wall, each page of Match spread out before him, as he edited it over and over again. He had no patience for office politics, the endless complaints of one employee about another. “God, listen to their fucking problems,” he’d say to himself. Or, to them, “You’re wasting my time.” To make matters worse, he lost his girlfriend—to a guy she’d met on Match.
Simon Glinsky, Kremen’s friend and marketing consultant, saw Kremen’s impatience with other people as part of what he called the “genius syndrome,” his frustration that others couldn’t solve problems as efficiently as he could. “Why hasn’t this been done?” Kremen would snap, “this is so easy! It’s just three steps. I could have done that last night.” The engineers got so tired of his outbursts that they half jokingly put a strip of masking tape on the ground outside their offices and told Kremen not to pass it.
Finally the board told him they’d had enough. They told him they were going to replace him as CEO. Despite his insistence that Match was about content, they wanted to sell it as a software platform to newspapers. Kremen’s stomach sank as he stared into the indifferent faces. They weren’t just taking his baby away from him, they wanted to raise it to be a completely different person than he intended. And if that was the case, he told them, then he was out. And so, in March 1996, he resigned from Match.com without seeing a dime from his invention.
Kremen felt devastated. What had just happened? His head reeled. Life could be so cruel. Ever since he was a kid, he had tried to be his best. Sure, he had his troubles, his conflicts, he was far from perfect. But he had always been someone who strived, who bootstrapped himself from nothing, who dared to dream big, to be the Captain Kirk of his own Enterprise, to boldly go where no one had gone before. He had invented online dating not just to help himself, but to help the world, to find a new way to connect, to love, to be happy. And for what? To be ousted by a bunch of misguided suits? Kremen could feel the weight of his lost hopes crushing him. And in that moment he knew he had a choice: to let himself be buried in disappointment, or, better yet, begin something fresh.
And it was the latter path he chose. He even had a name for it: chasing the dragon—like crashing on one drug and getting wired on the next. He joined a startup as president; NetAngels used online software that suggested websites to visitors based on the person’s traffic history. No one had seen anything like this before, essentially a recommendation engine for navigating the emerging world online. NetAngels, as a result, gained backers, including famed investor Esther Dyson and Ron Posner. Kremen, they recognized, stood out from the other innovators in Silicon Valley in a hugely important way: He was no one-trick pony. He was born with some weird knack for seeing around corners. Kremen made another $200,000 when he merged NetAngels with another firm, Firefly, and sold it to Microsoft. Kremen believed the best strategy for business was to place many bets, start ten companies in other words, hoping that maybe one will hit.
Kremen’s brain was like a pachinko machine, a maze of silver thoughts bouncing between flashing lights. But when one would drop in the hole at the bottom, it would grab his attention and make him stop everything. And that’s what happened when one particular silver ball landed in his mind: Sex.com. Kremen wasn’t a pornographer, and had no interest in being one, but he was enough of an entrepreneur to know there was money to be made with that domain.
And then he thought of Stephen Cohen, the man who claimed to now own the site. Since they had last spoken, Kremen had been too busy dealing with Match to focus on getting Sex.com back from Cohen. But when he investigated it again, he discovered that Cohen hadn’t been waiting around for him to catch up. In May 1996, Cohen had applied to trademark Sex.com, claiming, as he told Kremen, that he had been using the Sex.com name since 1979 on the French Connection. Furious, Kremen retained a lawyer to demand NSI provide answers to how and why did they hand over his site to Cohen in the first place?
Soon after, in mid-June, NSI forwarded Kremen the letter Cohen had sent them for the transference of Sex.com. Kremen couldn’t believe his eyes as he held it in his trembling hands. It was typed on phony letterhead for Online Classifieds, Inc., the company name Kremen had used prior to changing it to Electric Classifieds when he registered Sex.com the year before, and it included his old home address as well as an invented, and grammatically incorrect, slogan: “For Your Online Ad’s.”
It was dated October 15, 1995, and addressed to Cohen, “re: Sex.com.” Kremen read on with amazement:
Dear Mr. Cohen, per our numerous conversations, we understand that you have been using Sex.com on your French Connections BBS since 1979 and now you want to use Sex.com as a domain name on the internet. Our corporation is the owner of Sex.com as it relates to the internet.
At one time, we employed Gary Kremen who was hired for the express purpose of setting up our system. We allowed Mr. Kremen to be our administrative and technical contact with the internet, because of his past experience with computers and their connections to the internet.
Subsequently, we were forced to dismiss Mr. Kremen. At no time, was Mr. Kremen ever a stockholder, officer, nor a director of our corporation and as the internet shows that Sex.com is listed in our corporation and not in Mr. Kremen’s personal name. In fact, Mr. Kremen is the president of a different and unrelated corporation called Electric Classifieds, which is located at 340 Brandon Street in San Francisco, California. Further, Mr. Kremen’s corporation owns Match.com which is listed with the internet registration.
We never got around to changing our administrative contact with the internet registration and now our Board of directors has decided to abandon the domain name Sex.com.
Because we do not have a direct connection to the internet, we request that you notify the internet registration on our behalf, to delete our domain name Sex.com. Further, we have no objections to your use of the domain name Sex.com and this letter shall serve as our authorization to the internet registration to transfer Sex.com to your corporation.
It was signed “Sharon Dimmick, President.”
“Sharon Dimmick?” Kremen felt dizzy, infuriated, the blood rushing to his face as the letter spun through his head. Sharyn—not Sharon, as Cohen spelled the first name—Dimmick, a psychologist, was his roommate back in the early 1990s when he was living in San Francisco. She’d been living in the place before them, and they’d met through a mutual friend. The cohabitation had not gone well, with Dimmick frequently chastising Kremen for his dirty dishes, loud music, and allegedly letting her cat run loose. It had gotten so strained, in fact, that Kremen had finally moved in with a lesbian couple downstairs just to have peace.
Seeing her name on the letter set his mind reeling. “Sharyn fucking Dimmick?” She wasn’t the president of Online Classifieds, she was just a roommate he was living with at the time he’d registered the site. He had put their address down when he got Sex.com, so that wou
ld explain how Cohen would have known it. But why would her name be on this? Was that really her signature? Was she still pissed at him—she’d tried to break his arm after all—and now in cahoots with Cohen, and lying on his behalf? All the stuff in the letter about Kremen being hired to set up the computers, then being fired, it was bullshit, of course, since Online Classifieds was just him. Then he realized—her name was misspelled on the letter, Sharon instead of Sharyn.
And the most absurd thing of all? The assertion in the letter that a company called Online Classifieds would purport that they “do not have a direct connection to the internet,” and so then would ask Cohen to delete their registration of Sex.com on their behalf. It was as if Julia Child said she didn’t have her own kitchen so needed Cohen to make her a sandwich. If Kremen wasn’t so furious, he would laugh. But this was no joke. Though he didn’t have all the answers yet, there was one thing he thought for sure. Cohen had stolen Sex.com, and it was time to get it back.
CHAPTER 6
THE EROTIC TECHNOLOGICAL IMPULSE
“Almighty God, Lord of all life, we praise You for the advancements in computerized communications that we enjoy in our time. Sadly, however, there are those who are littering this information superhighway with obscene, indecent, and destructive pornography.”
It was June 14, 1995, inside the Senate chamber in Washington, D.C., and Jim Exon, a seventy-four-year-old Democrat from Nebraska with silver hair and glasses, had begun his address to his colleagues with a prayer written for this occasion by the Senate chaplin. He was there to urge his fellow senators to pass his and Indiana senator Dan Coats’s amendment to the Communications Decency Act, or CDA, which would extend the existing indecency and anti-obscenity laws to the “interactive computer services” of the burgeoning internet age. “Now, guide the senators,” Exon continued his prayer, “when they consider ways of controlling the pollution of computer communications and how to preserve one of our greatest resources: The minds of our children and the future and moral strength of our Nation. Amen.”
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