Gary Kremen

Founder of Match.com

• Born: September 20, 1963
• Place of Birth: Chicago, Illinois

Primary Company/Organization: Match.com

Introduction

Gary Kremen claims to have invented online dating when he founded Match.com in 1995. He is an Internet and software engineer known for capitalizing on the value of Internet domain names; among the names he has registered are jobs.com, autos.com, and sex.com. His eleven-year battle to reclaim sex.com was highly publicized and established the legal principle that a domain name is property and thus can be stolen, even if the original owner did not pay for it. Kremen also cofounded one of the world's first open source software companies and created a pioneering green power company to encourage the use of solar energy. He was a member of the board of directors of the Santa Clara Valley Water District, which supplies water to the Silicon Valley, among other areas, from 2015 to 2022.

Early Life

Gary Kremen grew up in Skokie, Illinois, a Chicago suburb; both his parents were teachers. As a teenager, he was a computer hacker and was involved in minor juvenile delinquency. After graduating from Niles West High School in Skokie, he enrolled in Northwestern University in Evanston, Illinois (also a Chicago suburb), in 1981, studying business and electrical engineering. After graduation in 1985, he went to work with an aerospace contractor and was introduced to the ARPANET, a forerunner of the Internet. Kremen also earned a master's degree in business administration from Stanford University in 1989.

Life's Work

Kremen distinguished himself with an ability to be among the first to recognize trends and meet emerging needs in the software industry. In 1991, he and Ben Dubin created one of the world's first open source software companies, Full Source Software; their business model was built by capitalizing on the number of software programs available on the Internet, at a time when many individuals had computers but not Internet access. The company operated by downloading and testing open source programs, putting them together into packages, and selling them to people who did not have access to the Internet and to corporations. Setting a price point of $99 per package, Full Source Software was soon selling several thousand dollars' worth of software per day.

Kremen made his biggest fortune by spotting another trend: the value of domain names. In the early days of the Internet, domain names were free, but they had to be registered so that each would be used only once. Kremen reasoned that the Internet would one day carry classified advertising similar to that carried in newspapers, and so he registered domain names based on the traditional headings in a newspaper's classified listings: autos.com, jobs.com, and housing.com—and, most famously, sex.com. In 1993, he founded Electric Classifieds, Inc., the first Internet classified ads company, and with backing by private investors launched the dating site Match.com in 1995. Match.com allowed users eighteen years old and older to post information about themselves, to browse other listings, and to search for matches based on criteria of their choosing. Kremen obtained financing from a group of investors led by Canaan Partners, and as Internet dating became more popular, the company prospered, even while some of the investors were reluctant to be associated with a dating service, considering it tacky. In 1997, Match.com was sold to Cendant for $8 million; it was sold again in 1999 to Ticket Master for $50 million.

Kremen may be most famous for his battle with Stephen Michael Cohen over ownership of the domain name sex.com. Kremen registered the name in 1994 but learned in 1995 that ownership of sex.com had been transferred to Cohen, who presented forged documents to Network Solutions, LLC, the company in charge of registering Internet domain names. Cohen had already served prison time for fraud and had a string of convictions for other crimes, including car theft, forgery, and passing bad checks. Network Solutions had no interest in helping Kremen regain the website, in part because Kremen paid nothing to register it in the first place, and Kremen spent an estimated $5 million in legal fees on the case. He ultimately won it, however, and in 2000 a judge ordered Cohen to return the domain name to Kremen and to pay $65 million in damages. Kremen was unable to collect the settlement, however, because Cohen fled the country and had already transferred most of his wealth outside the United States. One material benefit Kremen did enjoy as part of the settlement was ownership of Cohen's mansion in Rancho Santa Fe, California, a wealthy suburb near San Diego, after Cohen fled the United States. Cohen was extradited from Mexico on October 27, 2005, and Kremen has since been awarded more of Cohen's properties, including land in Tijuana, Mexico, a shrimp farm in Mexico, and a partial interest in a Mexican strip club.

The value of sex.com fell rapidly after the domain was returned to Kremen, although not entirely through any fault of his. Under Cohen's management, sex.com had been making $500,000 to $750,000 per month, primarily through advertising, and kept earning at this pace for a few months after the site was returned to Kremen. However, demand for Internet pornography fell rapidly within a few months, as what had once been a scarce property had become commonplace and was available free through sharing services such as Kazaa. Kremen was also not an efficient manager, and revenue from the site dropped to one-third of what it had been a year earlier. Given this competition, Kremen shifted the focus of sex.com toward selling sponsored links to appear on the sex.com site and on search engines. In 2006, Kremen sold sex.com for $14 million, the largest sum ever paid for a domain name, although much less than what Cohen appears to have made on the site when he was operating it.

Also in 2006, Kremen began a new venture by founding Clean Power Finance (CPF), a company whose stated goal is to get more Americans to use solar power by simplifying the processes of residential design, installation, and financing. CPF uses two complementary approaches to encourage the adoption of solar technologies. First, it created CPF Tools, a software program used by solar installers to help them design, quote, and sell solar power systems for residential customers; about 40 percent of all residential solar sales use CPF Tools. Second, it provides access to financing to residential consumers. Kremen holds three patents, the most significant of which is for dynamic web pages, meaning web pages that change as an individual uses them; dynamic web pages have become a standard feature of most websites. He sold this patent for more than $1.25 million.

Kremen has helped found numerous other companies, including Sociogramics, CrowdFlower, WaterSmart Software, and many others. He also developed an abiding interest in water management and served on the board of directors of the Purissima Hills Water District outside Palo Alto from 2010 to 2014. In 2014 he was elected to the board of the much larger Santa Clara Valley Water District, and the board elected him its chair; he was reelected in 2018 but lost the 2022 election.

Personal Life

Kremen married in 2008 and has two sons.

Bibliography

Carreon, Charles. The Sex.Com Chronicles: A White-Hat Lawyer's Journey to the Dark Side of the Internet. Tucson: Prime, 2008. Print."

"Gary Kremen." Ballotpedia, 2022, ballotpedia.org/Gary‗Kremen. Accessed 6 Mar. 2024.

Kauflin, Jeff. "How Match.com's Founder Revolutionized the Dating World—and Walked Away with Just $50,000." Business Insider, www.businessinsider.com/how-matchcom-was-founded-by-gary-kremen-2015-7. Accessed 29 Oct. 2019.

McCarthy, Kieren. Sex.com: One Domain, Two Men, Twelve Years, and the Brutal Battle for the Jewel in the Internet's Crown. London: Quercus, 2007. Print.

Mooallem, Jon. “Sol Man: The Founder of Match.com Is Making the Case for Solar Energy, One Roof at a Time.” Mother Jones 33.3 (2008): 46–48. Print.

O'Brien, Chris. “Kremen: Life after Match.com, Sex.com; Entrepreneur Is Now a Family Man, Angel Investor in Cleantech.” San Jose Mercury News, Business Valley final, 16 Mar. 2010: n. pag. Print.

O'Brien, Chris. “The Prisoner of Sex.com.” Wired 11.8 (2003): n. pag. Print.