The Players Ball
CHAPTER 1 THE WORLD WILD WEST
No one expected things to get so dirty.
It was just a local election, and a seemingly inconsequential one at that, a seat on the Santa Clara Valley Water District Board of Directors. The seven-person board manages the water system and flood control for the 1.9 million residents of the California county, which includes Silicon Valley: patching dams, overseeing water treatment plants, stocking sandbags when creeks overflow, and so on. It’s a noble but unglamorous public service compared to the jetset lives of the tech titans in town. The only residents who usually bother to attend the public meetings are a handful of retirees, and the homeless woman who often sleeps in the back.
But, in 2014, voters were more interested than ever. “Water district elections are usually low-key—if not boring—affairs,” the San Jose Mercury News reported. “Not this year.” The two-man race had become the most vicious, and confounding, in the Santa Clara Valley Water District’s eighty-five-year history. There’d been allegations of corruption, sexual depravity, scandalous lies. For reasons no one could gather, Gary Kremen, a heavyset, disheveled,
fifty-one-year-old dot-com multimillionaire, Deadhead, Stanford MBA, and self-described “kook,” shelled out $408,492—largely from his own pocket—to beat incumbent Brian Schmidt, an earnest forty-seven-year-old environmental attorney who’d devoted his career to the cause. “Why is he spending so much?” Schmidt told the Mercury News. “I don’t know what to say.”
The water of Silicon Valley pumped through the heart of Schmidt, who came off like an Eagle Scout. He’d earned his law degree from Stanford, labored locally as an environmental attorney, and blogged about the box turtles he saw while cleaning up the coast. For the past four years, he had proudly served on the Water District board. His fight for the potable reuse of recycled waste water, which could supply half the county’s drinking supply, helped him earn multiple media endorsements. But with only a few days until the election, and his money (and dreams) running out, he finally had enough of Kremen’s Animal House behavior.
One morning in late October, Schmidt bicycled alone to a dried-up pond in the woods near his home in Palo Alto to shoot a last-ditch campaign video for YouTube. Slowly panning his camera across the landscape, he filmed the muddy field limned with dying brown trees. “What you’re seeing around you is the effect of the California drought,” he narrated solemnly. Then Schmidt set the camera in place, and stepped in front of it to tape himself. He was prematurely gray but boyish, and wore a blue “Re-Elect Brian Schmidt” T-shirt. “I am kind of proud to say I am now a target of a negative mailer,” he said.
Schmidt approached the camera and held up the cover of said mailer: a custom greeting card that mocked his recycled waste water plan. “BRIAN SCHMIDT wants to get our drinking water from OUR TOILETS,” the card read.
“It’s a picture of me—next to a toilet,” Schmidt explained. “It claims not to be from my opponent, but you can take that for whatever you want to take it for. This is a very expensive thing, where my opponent has put a lot of money into the race.”
As Schmidt opened the greeting card, it played an audio snippet from one of his stump speeches: “I’m advocating treatment of waste water to drinkable levels.” Then a woman’s voice came on: “Brian Schmidt wants my family to drink water from a toilet? Ewww!” she said. “Say no to toilet water! Say no to Brian Schmidt for Santa Clara Valley Water District.”
As his camera rolled, Schmidt stepped back into focus with the beleaguered expression of a science teacher who’d sat on one too many whoopee cushions. Pedantically, he explained that people were already drinking recycled waste water from Singapore to the International Space Station. “This is astronaut water we’re talking about,” he went on. “It’s healthy enough for them, it’s healthy for the rest of us.” He appealed to the brainiacs in town to give him, and his astronaut water, a chance. “This is Silicon Valley,” he said, as he concluded recording the video he later posted online. “This is a highly educated area. We understand what we can do with technology.”
But few understood technology better than the highly educated man so curiously obsessed with beating him, Gary Kremen. Silicon Valley had seen its share of iconoclastic visionaries—Steve Jobs, Bill Gates, Mark Zuckerberg—but none like Kremen. Though largely unfamiliar to the outside world, he was among the most prescient entrepreneurs in the history of the internet. In business, and in life, true visionaries not only have the foresight to find the next frontier, but the confidence to bet on it. Kremen was legendary among those in the know for his uncanny cocktail of both. As veteran technology investor Ron Posner put it, “He’s very energetic, very creative, very smart—and never gives up.”
Kremen is the father of online dating. In 1993, he founded what was essentially the first—now biggest—dating site, Match.com. Despite about only 5 percent of Americans being online around that time, Kremen brashly told a skeptical TV reporter in 1995 that his invention was going to change the world. “Match.com will bring more love to the planet than anything since Jesus Christ,” the then thirty-one-year-old declared in his nasally toned Chicago accent. The fact that this prediction was coming from some Belushi in a stained tie-dye T-shirt sprawled on a red bean bag made it all the more dubious.
But as Kremen would prove time and time again, his hunch was right. Match.com became an international phenomenon, spreading to more than twenty-five countries in eight languages with more than 42 million members, and becoming the basis of today’s $2 billion online dating industry. The company Kremen started with a $2,500 credit card loan now has a value of $3.5 billion. At a time when most businesspeople barely understood, let alone paid attention to, the internet, Kremen was among the first to figure out how to make money online. Even more radically, he transformed the way people meet and marry in the digital age. As he wrote with characteristic humor on his Water District campaign website bio, “I am responsible for over 1,000,000 babies!”
But according to his detractors, he was responsible for much that was wrong with the internet too. The genius of love was also the sultan of sex, specifically Sex.com, one of the most notorious websites ever online. And it was his epic battle over Sex.com that made him most legendary of all.
It started in the early 1990s, before he pioneered online dating, when Kremen envisioned another new frontier. He thought that domain names—the dot-coms and other addresses that signify ownership online—would one day have the value of real property
as people learned how to build businesses on the net. Because domains were deemed worthless at the time, they were essentially free to register. So Kremen gobbled up dozens—Jobs.com, Housing.com, Autos.com, Match.com, and the like—to later monetize. It was the online equivalent of coming to America and staking claims across the country. Though he had no intention of becoming a pornographer, in 1994 he registered Sex.com too, thinking it could become a health and wellness education site.
But while he had been busy with Match.com, someone named Stephen Michael Cohen had somehow stolen the rights to the Sex.com domain—and transformed it into one of the most profitable websites, earning millions of dollars a month. Kremen wanted his site back, and he wanted to get the money Cohen had earned through stealing it. What followed was an epic rivalry that established many of the rules that enable online commerce today. As Kremen’s esteemed lawyer James Wagstaffe said, “This case established the precedent that a domain name is property—property that can be stolen.”
On one side was Kremen. A devoted father of two, he epitomized the entrepreneurial spirit of the new Silicon Valley in his quest to bring love and connection to the world. On the other side was his evil genius twin, Cohen, a stout, balding, forty-eight-year-old convicted felon from Los Angeles. As a con man, Cohen was among the best. He impersonated judges and lawyers, ran swingers clubs, left trails of bad checks, and scammed investors after promising to build a Fantasy Island of sex in the desert outside Las Vegas. A lifelong computer enthusiast, Cohen insisted that, despite Kremen’s claims, he was the real originator of internet dating, and the rightful owner of Sex.com, long before Kremen came on the scene. “He says he invented online sex. That’s the most ridiculous thing,” as Cohen said. “I started the sucking and fucking online!
I invented that!” The Los Angeles Times called Cohen “one of the most successful entrepreneurs of the Internet Age.”
The battle of Cohen and Kremen became highly personal, and picaresque. It ran from the boardrooms of Silicon Valley to the bordellos of Mexico. There were porn stars and programmers, billionaires and brainiacs, goons and gangsters. There was even a gunfight on the streets of Tijuana, according to Cohen at least.
But there was more than fame and fortune at stake. The war for Sex.com represents an essential, but overlooked, chapter behind one of the greatest inventions of our time: the internet. In the public imagination, the computer revolution is bookended by two main stories, the rise of Apple and personal computing in the 1980s, and the proliferation of Facebook and social media in the 2000s. But in between those years is a lost era of innovation that’s crucial to understanding the rapidly evolving world of today and tomorrow: the internet gold rush of the 1990s. As in the American Frontier of the 1800s, the early settlers of the net fought to stake their claim and make their millions. They established the systems that defined the world to come. But none of this would have been possible without the fuel that made the internet what it is today, love and sex.
And so in the fall of 2014, it seemed all the more confounding why a mogul with Kremen’s history would be investing so much time and money to win the Water District race. Kremen claimed it was part of his burgeoning interest in sustainability. One of the recent start-ups he founded, a solar energy firm called Clean Power Finance, had received $75 million in investments from Google and others. Brian Schmidt, his beleaguered opponent, suspected there had to be some other reason—he just couldn’t figure it out. “It’s tricky to try to get at somebody’s deeper motivations,” as Schmidt told the Mercury News, “but it is really concerning.”
With every story, there’s a road. Kremen’s led back to the Wild West days of the world wide web, and the fight for the future that left him—and Cohen—reeling to this day. “Believe whatever you want,” as Cohen said late one night not long ago, “I don’t care. I don’t drive a Rolls-Royce anymore. I don’t own airplanes anymore. I don’t have boats anymore. Because none of that shit means anything to me anymore.”