Porn Entrepreneur Gives Inside Look at Profiting Online.

What's in a name? Well, for starters, a lot of money if the name is a naughty four-letter word and you are in the Internet pornography business.

Kevin Lawrence, a local graphic designer, had the foresight to register the domain name "p***.com" (slang for urine) back in 1995 when the Internet was just taking off. It has paid his bills ever since.

In the world of online pornography, where millions of people roam tens of thousands of adult sites, to own a site that has the name of one of a handful of highly suggestive four-letter words is literally sitting on a gold mine.

"You get a lot of what's called 'type-in' traffic," said Lawrence. "That's people who type in the exact words, without using a search engine, just to see what they come up with."

There are two major advantages to having such a generic, provocative domain name, according to Lawrence. In the first place, it generates a lot of traffic, or hits, and secondly, the people who visit the Web site know what they're looking for, and that means a high "conversion rate."

"I've had a conversion rate of one in 36," said Lawrence, referring to the number of visitors who actually sign up and pay for a site. "That's unheard of because the average conversion rate for targeted traffic, which are people who search for specific content on the Web, is one in the low hundreds, and for exit traffic (people who link from one site to the next by way of banners), it's one in a thousand."

As a result, Lawrence is making a very nice living off his site. Although he declined to say exactly how much he pulls in, he acknowledged that it's a couple of hundred thousand dollars per year.

The bearded and tattooed New York native is particularly happy that his detour into Internet pornography has enabled him to quit his daytime job as a graphic designer in the entertainment industry and that he, as he puts it, "does not have take any more (guff) from Hollywood."

Webmasters' pay

But Lawrence is a rarity in so far as he is able to make a comfortable living off his Web site. There are an estimated 280,000 adult Web sites, most of which are simply webmasters, sites that solely post banners for other sites and which generally are just scraping by.

"The vast majority of webmasters may make enough to support a single individual, one or two thousand a month maybe, but not enough to run a business," said Mark Tiarra, chief executive of United Adult Sites, a trade organization. "But if you're in a niche market and you've got a good domain name, which gets you a lot of type-in traffic, you can make a lot more than that."

Although it's no secret that pornography is one of the few online business segments that is actually profitable, with 25 million Americans visiting an online adult site every month, it is far from clear who is making the money and how much they make. Estimates of annual industry-wide revenues range from $200 million to $1.8 billion, but because almost all the major players are privately owned companies that shun the limelight and are loathe to discuss their finances, nobody knows the exact magnitude of the business.

It is a fair guess, however, that the bulk of the money goes to just a handful of heavyweights, such as Vivid Entertainment Group in Van Nuys, which provides much of the content to be found on adult sites. Other big money makers are sites like cybererotica.com and karasxxx.com, which get 6 million to 8 million unique users a month, according to Internet research firm PC Data Online. That's as many as mainstream sites, such as barnesandnoble.com and MP3.com.

Heavy traffic

Lawrence's site may get up to a few hundred thousand hits or page views a day, he says. That's not bad, but it pales in comparison to, say, porncity.net, which registered 478 million page views in October alone, according to PC Data.

Lawrence himself started out at the bottom, as a webmaster or banner farm, where he posted banners of other adult sites for visitors to link to. Under that system, visitors who link from the banner site to a pay site, where they can sign up and pay to view stills and videos, will have a software code from the banner site they carry with them. If they sign up at the pay site, the banner site operator gets a commission, which can be as much as 50 percent of the sign up and renewal fees.

As Lawrence's site generated a lot of traffic, he saw a steady flow of income from visitors who signed up at pay sites that had banners posted on his site. That got him a painless $1,000 a week, according to Lawrence, but it was just the beginning.

He also started to receive e-mails from people offering large sums of money for his site. The offers started at $10,000 and increased to as much as $1 million. At the same time, Lawrence found that he was the center of attention at industry trade shows for adult Web site entrepreneurs.

"People would look at my badge and say, 'Wow, you got p***.com?'" said Lawrence. "Then they would want me to meet the president of their company and give me the VIP treatment."

The intense interest in his Web site, or rather the domain name, made Lawrence reluctant to cash out. Even if he were to get $1 million, he would pay nearly half of it in taxes and be left without his source of revenue. So, in 1998 he decided to convert his site from a banner farm to a full-fledged pay site.

That decision was also prompted by an offer from Python Communications, one of the Internet pomography heavies with offices in Canada, Europe, and Asia Rather than buying Lawrence out, Python offered a partnership whereby the company would provide Lawrence with logistics support, including servers, bandwidth and customer support, in exchange for a cut of his revenues.

Lawrence would not say what Python's share of his Web site's revenue is, but in so far as this partnership leaves him with a six-figure income and virtually no overhead, he is not complaining.

"It is not uncommon for a pay site to partner up with a content provider," said Tiarra. "it's pretty unique though to have the provider take care of all the back-end provision, as in this case."