Late last year, Craigslist bowed to public controversy and eliminated the erotic services of their website, which was a well-known place for prostitutes and escorts to advertise themselves online. Now that Craigslist is out of the prostitution game, what’s a poor working girl to do? Join Facebook, apparently.

In a recent study conducted sociology professor Sudhir Venkatesh discovered that the vast majority of New York City prostitutes not only have a Facebook page, but conduct much of their business through the world’s most popular social network.

“Even before the crackdown on [Craigslist's] adult-services section, sex workers were turning to Facebook: 83 per cent have a Facebook page, and I estimate that by the end of 2011, Facebook will be the leading on-line recruitment space,” Venkatesh writes.

Venkatesh, a Columbia University professor, followed 290 female sex workers, 170 of whom made more than $30,000, and discovered that technology was increasingly playing a role in allowing them to “control their image, set their prices, and sidestep some of the pimps, madams, and other intermediaries who once took a share of the revenue.”

In fact, Facebook and technology is such an asset to a prostitute that a smartphone is one of the best ways for her to increase her earnings, not just so they can keep track of Facebook hookups on the go, but because a smartphone sends a message about her status: that she’s not a street walker, but rather, a high-earning professional.

Another surprise? The vast majority of prostitutes favor Blackberries over iPhones. Something tells me RIM won’t be quoting that statistic in a press release.

Federal judge Vaughn Walker this morning overturned California’s Proposition 8, which had denied marriage to same-sex couples. Shortly afterward, a PDF of the judge’s ruling appeared on document-sharing site Scribd and became the most viral doc the site has ever hosted.
 
Scribd user goodasyou uploaded the PDF titled “Prop 8 Ruling FINAL” shortly after 3:30 PM ET today. We learned about it when we received an e-mail from Scribd Senior Communications Director Michelle Laird, who said that the document was receiving over 1,000 views per second within minutes of its publication.

Later, Scribd CEO Trip Adler was quoted by GigaOM saying that while most documents the company considers “viral” reach 100,000 views within 24 hours, the Prop 8 ruling had reached 100,000 views within 24 minutes. Its propagation has since slowed, and it’s now sitting at just over 200,000. The Internet is fickle — we all know that — but that first burst of interest can be significant.

In addition to embedding options and Twitter or Facebook sharing features, Scribd has its own system for following people who post interesting documents and seeing what new items they upload in a Facebook-like news feed.

A few months ago, the service added new features for sharing documents easily to mobile devices like e-readers and smartphones. The point is, propagation is easy with so many sharing options and such broad platform support, so that probably helped this historic ruling find a digital audience.

This happened while news outlets like the LA Times were simply publishing excerpts from the ruling rather than the complete document.

“Prop 8 Ruling FINAL” from Scribd

It's been five years now since ICANN, the not-for-profit Internet Corporation for Assigned Names and Numbers, first proposed a .xxx top-level domain for sexually explicit sites and the BBC reports today that the battle has finally ended with the agency's approval.

The domain name has been rejected numerous times before, with lobbying from the American Family Association and the Family Research Council bringing pressure from the Bush administration, which said it feared creating a virtual red-light district for Internet pornography. Since then, however, ties between ICANN and the U.S. government have been loosened, giving the organization more independence.

As the BBC reports today, however, the .xxx domain can make it even easier to block adult content where it is not allowed or desired. The article quotes Stuart Lawley, chairman of ICM Registry, as saying that this decision is "great news for those that wish to consume, or avoid, adult content." The creation of a .xxx domain makes it quite simple for places like public libraries and schools to enforce a blanket ban of the domain. To some degree, the opposition of conservative groups seems surprising, as the .xxx domain would also make it easier to block such content from reaching the family computer as well.

On the other end of the spectrum, even many members of the adult industry have been weary of the introduction of a porn-only domain, citing fears that it would be made mandatory. Sex educator and author Violet Blue called much of this "hysteria and hyperbole" suggesting that instead of getting all worked up over the new domain, "you'd think someone with a big porn business would start creating a set of best practices to allay fears and make guidelines that decision-makers could refer to."

Already, there are more than 110,000 pre-reservations for .xxx domains and the first ones are scheduled to go live early in 2011.

James Buckmaster, the chief executive of Craigslist, said, “Misuse of Craigslist for criminal purposes is utterly unacceptable.”

Craigslist, one of the most popular Web sites in the United States, is on track to increase its revenue 22 percent this year, largely from its controversial sex advertisements. That financial success is reviving scrutiny from law-enforcement officials who say the ads are still being used for illegal ends.

The ads, many of which blatantly advertise prostitution, are expected to bring $36 million this year, according to a new projection of Craigslist’s income. That is three times the revenue in last year’s projection.

Law-enforcement officials have been fighting a mostly losing battle to get Craigslist to rein in the sex ads. At the same time, officials of organizations that oppose human trafficking say the site remains the biggest online hub for selling women against their will.

Last week, in the latest example, the Federal Bureau of Investigation arrested 14 members of the Gambino crime family on charges of, among other things, selling the sexual services of girls ages 15 to 19 on Craigslist.

The company that provided the revenue projection, the Advanced Interactive Media Group, has been preparing such analyses since 2003. Followers of Craigslist consider AIM’s work to be the most comprehensive estimates of the fiercely private company’s finances. The estimate was calculated based on the number of sex ads counted on Craigslist over the month of February and the fees for posting such ads — $10 initially and $5 for repeat postings.

James Buckmaster, Craigslist’s chief executive, said in an e-mail message that the site would not confirm the figures because it is private and does not discuss its finances. Of the sex ads, he wrote, “Of the thousands of U.S. venues that carry adult service ads, including venues operated by some of the largest and best known companies in the U.S., Craigslist has done the best and most responsible job of combating child exploitation and human trafficking.”

Mr. Buckmaster was referring to alternative newspapers, phone directories and sex Web sites that carry ads for prostitution, although authorities say that Craigslist is the largest place for such ads.

Craigslist, based in San Francisco, had seemed to put the conflict over its sex ads to rest. Attorneys general in 40 states, including New Jersey, Illinois and Connecticut, investigated the company for facilitating criminal activity, after a wave of publicity about prostitution and violent crimes linked to the site.

Although Craigslist has continually argued that it is legally protected by the Communications Decency Act against liability for what its users post — an analysis that judges and legal experts generally agree with — it promised last May to begin manually monitoring these posts for illegal activity.

But it also decided to stop committing to donate the profits from sex ads to charity, saying it would make no further comment on how that money would be used.

In a private letter sent to Craigslist’s lawyer on Thursday, Richard Blumenthal, attorney general of Connecticut, complained about the continued presence of prostitution ads on the site and asked what additional steps Craigslist was taking to keep such solicitations off the site.

He also asked the company to reveal precisely how much money those ads generate, and criticized the company’s announcement last May that it would no longer commit to donate those profits to charity.

“I believe Craigslist acted irresponsibly when it unilaterally decided to keep the profits from these posts,” Mr. Blumenthal wrote in the letter, a copy of which was obtained by The New York Times.

In the e-mail message, Mr. Buckmaster said, “Misuse of Craigslist for criminal purposes is utterly unacceptable, and Craigslist will continue to work with its partners in law enforcement and at nongovernmental organizations until it is eliminated.”

He declined to say whether the company was continuing to donate revenue from sex ads to charity, but he said the company was continuing to develop its charitable initiatives.

The company has two charitable organizations; one, the nine-year-old Craigslist Foundation, which received $648,000 in contributions in 2008, according to public documents, does not make any donations. It “connects people and organizations to the resources they need to strengthen communities,” according to its Web site.

There is also a newer organization, the Craigslist Charitable Fund, which was capitalized in 2008 with $2.7 million by Craigslist, according to public documents. But little else is known about it, and Mr. Buckmaster declined to comment further on the organization or say whether say whether that was the money from the sex ads.

Meanwhile, staff members for Illinois’s attorney general, Lisa Madigan, have counted more than 200,000 sex ads since late 2008 posted to Craigslist in Chicago alone — which they estimate have generated $1.7 million for the company. Officials in Illinois and Connecticut, as well as South Carolina, are leading the effort to get the site to improve its monitoring of sex ads.

Cara Smith, Ms. Madigan’s deputy chief of staff, said Craigslist’s manual review of the ads had had a minimal impact. “Certainly the manual monitoring has tempered the photos posted along with the ads, but I think there’s no question that the site continues to facilitate prostitution,” she said.

The AIM Group, which sells research on the advertising market to newspapers and Web sites, conducts its annual Craigslist study by tabulating all the posts to Craigslist in 39 major United States cities over a 30-day period, and then extrapolating to reach a final revenue figure.

This year, the study showed Craigslist on track to bring in $122 million in 2010, a 22 percent increase over its projected revenue last year. Though the site is largely free, it does charge people to post job listings in 19 major United States cities, and real estate listings in New York City, in addition to sex listings in all 438 markets in the United States. Revenue in those other categories remained largely unchanged since last year, according to AIM.

The increase in revenue from sex ads to $36.3 million for the year, according to AIM, was largely caused by Craigslist’s decision last May to double the rate for these ads in all of its American markets to $10.

The windfall from sex ads has touched a raw nerve with groups that oppose human trafficking, who are typically heated in their discussion of the company.

“Craigslist has not given any indication that they are outraged and disturbed that their site is the primary way children are bought in the country,” said Rachel Lloyd, executive director of Girls Educational and Mentoring Services, which provides assistance to sexually exploited and trafficked women. “All they have done is made cosmetic changes.”

Craigslist’s reliance on the Communications Decency Act has also angered law-enforcement officials, who complain that the law could not have been drafted with this particular example in mind. But the company has repeatedly won rulings in cases brought against it, including one in 2008 over discriminatory housing ads. A federal appeals court said Craigslist was an online service provider, not a publisher, and so was protected by federal law.

Questions about where that revenue is going are sure to arise from this latest financial analysis of Craigslist. In an accompanying report, the AIM Group estimated Craigslist’s expenses at under $50 million, though it acknowledged that this particular calculation involved “educated guesses.” The analysis took into account estimates of salaries, server and bandwidth costs, and the lawyer fees associated with Craigslist’s continuing legal battle with a minority shareholder, eBay.

Even if the numbers are slightly off, that leaves a lot of room for big profits. Mr. Buckmaster and Mr. Newmark own a majority of the company’s shares and by all accounts do not live flashy lifestyles.

Breaking news: Sex is popular online.

"Sex had played a major role in driving many technologies," says Jonathan Coopersmith, a technology historian at Texas A&M.

The example most people are familiar with, he says, is the VCR. Many early video cassettes were pornographic, and consumers' desire to view the material in their own homes fueled the early dissemination of the technology.

Think back to the early days of the Internet, Coopersmith says. "You had to have the hookup, you had to have the computer, you had to have the willingness to experiment a fair amount. And the people who do this tend to be young men, especially in their 20s and 30s, and this also happens to be a prime audience for pornography."

According to Nielsen net ratings, more than a quarter of Internet users accessed an adult Web site in January 2010. The Web research company Hitwise says adult sites accounted for about 6 percent of all U.S. Internet hits that month — putting the adult category in eighth place, with social networking sites in first.

But Hitwise general manager Bill Tancer says that in the not-too-distant past, adult sites used to get the most hits of anything on the Internet. "If I go back to when I started tracking this data in 2004, that was the highest of any category," he says.

Chatting Up Sex

Of course, that's only taking into account pornographic Web sites — the Internet has also provided a private venue for sexual discussion and education. Violet Blue is a sex columnist for the San Francisco Chronicle, writes for several online publications, and blogs and hosts a popular podcast called "Open Source Sex."

"The Internet has been sexualized even before it was the Internet," she says. Back in the days of bulletin board systems, some people would exchange what was known as "ASCII porn."

"This was essentially people using characters by hand on their keyboard to create what look like explicit images, and then send them to each other through bulletin board systems," she says.

Coopersmith says America Online's popularity was driven by its private chat features.

"One of the nicknames for AOL in the industry was 'the house that sex chat built,' " he says.

And Violet Blue points out that before YouTube began better enforcing its community standards, "there was a lot of porn on there."

Porn Paved The Way

Adult sites also paved the way for the mainstream to adopt several technologies.

They were among the first to integrate e-commerce systems to process credit card transactions. "The first part of the Web to make money was pornography," Coopersmith says.

Right now, the adult industry is hurting — due to the same piracy other online content providers face — but in the early days, "you have a lot of some of the tactics, concepts and business strategies pioneered by the cybersex world that then flowed into the regular online world," Coopersmith says. "For instance, creating these Web sites where you join for a fee and you have different levels of membership."

More obnoxious practices were also readily embraced by some in the adult world, as many people's junk e-mail folders can easily demonstrate.

Video technology is a place where adult sites have been especially innovative, integrating live video streams into browser windows with early "jpeg push" video. They continue to be on the cutting edge; Peter Acworth, who founded the very NSFW site kink.com, remembers a few years ago when customers were demanding live HD streams, but he couldn't find an acceptable off-the-shelf solution.

"So we put together our own technology to be able to do so," Acworth says. "You know, you go to CNN or anywhere else on the Web, the video you see is going to be significantly lower bandwidth."

Why is the adult film business in dire straits? Sasha Grey and other stars answered The Daily Beast’s question this weekend at the porn industry’s annual convention in Las Vegas.

Every January, the Adult Entertainment Expo in Las Vegas is the biggest annual gathering of the adult film industry. But the biggest is suddenly a lot smaller. The 2010 AEE convention, which ran Thursday through Sunday, had shrunk from packing two floors of the Venetian’s Sands Expo Center last year down to one floor (and that one with lots of empty space).

“The AEE show is an example of what the business faces. There are fewer fans, less foot traffic, and less companies exhibiting,” said Steve Javors, editor in chief of industry trade publication XBIZ. “During the 2000s, porn kept expanding outward. We thought there was an insatiable appetite for porn, and there would keep being more companies and more porn stars. Now, we are finding out that is not true.”

“People used to be ashamed to say their girlfriends did porn. That is gone. Anyone can afford a Web site now,” said Pete Housley, who aggregates porn on Twitter.

As for the concurrent, AVN Awards—AVN being another adult industry trade publication—which the porn world bills as their Oscars, it moved from the arena-size Mandalay Bay Events Center to the few-thousand-seats theater at The Palms. AVN head Paul Fishbein sounded like he was echoing the words of Spinal Tap’s manager when he described the venue switch as not so much to a smaller space, but one more “selective and intimate.”

• Douglas Rushkoff: The Internet Mob’s Porn Bomb So, what happened to the porn business, which had been magnificently profitable since the arrival of the VCR? The attendees at this year’s Adult Entertainment Expo gave a number of reasons for its problems.

Here are the Top 5 reasons why it is harder than ever before to make a living selling porn:

1. Piracy.

Lanie Crossman According to porn star Dana DeArmond: “If people don’t realize it is stealing and start paying for their porn then performers are going to stop performing.”

Among the acts DeArmond performs (solo or in group sex with men and/or women) are anal sex and double penetration. “I don’t think people are just going to do what porn stars do for free and put it on the Internet,” she said.

“It is stealing, and unfortunately it is hitting the adult industry hard right now,” said Sasha Grey, the current porn It Girl.

According to XBIZ’s Javors, thanks to illegal downloading and “Tube” sites like YouPorn, sales of porn’s most profitable product, DVDs, have taken a huge hit this past year. Javors said: “Piracy is the biggest single factor contributing to the economic malaise we are in. How can you compete with free?”

Dan O’Connell, president of Girlfriends Films, explained how his company has been among the few to claim an increase in DVD sales from 2009. “We’ve been able to grow our DVD sales, because we have been aggressive going after piracy. In the past eight months, we have taken down 17,000 pirated videos of ours by just sending out letters warning them that we will sue.”

But Girlfriends Films is just one company that averages about five movies a month. And even Grey does not see DVDs sticking around much longer. “I think DVDs are going to be a collectors’ medium like vinyl,” she said.

2. Video on Demand Meets the Masturbating Fan

Paying online hasn’t worked out so well for porn. Unlike conventional movies, the other Hollywood has a serious Achilles’ heel. “People look at VOD as the salvation that is going to be this huge revenue generator. But it is expensive to shoot a feature,” said Pete Housley of Candid Tweet. His company sits between fans and the industry by aggregating porn stars on Twitter. His perspective: “If you think about the costs of making a movie, and then selling it for 6 or 7 cents a minute, well, that is great for Hollywood. The problem for porn is that a guy watches 4 or 5 minutes, jerks off and is done. So, residual payouts are becoming less and less.”

AVN’s Fishbein said: “A lot of the studios that depended on DVDs are trying to make it up through video-on-demand. That is where you have people struggling, because they haven’t figured out how to fully monetize that content.”

John Stagliano, owner of Evil Angel, one of the largest DVD distribution companies in porn said: “We make money on VOD, just not nearly as much as comes from DVD sales. But we are making money on VOD. It isn’t the newspaper business yet.”

3. The Taboo Is Gone

“People used to be ashamed to say their girlfriends did porn. That is gone. Anyone can afford a Web site now,” said Housley.

Lanie Crossman So, Housley has developed criteria for his various feeds. For example, PornStarTweet requires that the performer has appeared in at least one DVD. Still, there are close to 500 qualified porn stars on this feed.

Mark Spiegler has been an adult talent agent for almost 20 years. His clients include some of the biggest names in the industry, like Dana DeArmond and Belladonna. But he no longer has to look for his talent: Aspiring porn stars email him in droves: “I send away at least two girls a week who think they can do porn,” he said.

Not everyone gets sent away. Spiegler likes to tell of the email he got in 2006 from the then recently turned 18 Sasha Grey. He immediately put Grey in her debut, a John Stagliano film.

Lanie Crossman Though Spiegler no longer reps her, he nostalgically keeps Grey’s first email on his phone. This weekend, reporters on the red carpet at AVN Awards asked to see this initial email. It appeared that it wasn’t the first time he had performed this ritual. He read the email aloud like a proud father, omitting only her real name, and ended by turning the phone around to display the long, long list of all the sex acts Grey was willing to perform on camera. The reporters turned totally silent as Spiegler scrolled down the list.

“Very few people are cut out for this business. Almost all of the girls who contact me, I send away. In my entire time doing this, there has only been one person who was perfect in every way for the porn business and that is Sasha Grey.”

At that point Grey, walking the carpet, came up behind Spiegler and the two warmly greeted each other.

4. Online Gaming

Lanie Crossman One of the strangest challenges porn faces is competition from online games like World of Warcraft, though the connection may at first seem random. “It is all entertainment that you are getting involved in the same way as porn is entertainment,” said Aiden. “I won’t say everyone, but a lot of people in the industry play videogames. The games are competition for porn. Fans jerk off to porn and are done, but you can keep playing a game.”

Aiden (no last name, this is porn!) should know, as he is also Webmaster for his wife Belladonna’s successful site EnterBelladonna.com. As for his online gaming, his wife wants him to cut back. “Yeah, my wife and I occasionally argue about the amount of time I spend playing.”

5. Porn Star Hookers

Why fight for the diminishing supply of work in the porn business, doing those double penetrations, when you have fans who will pay you more for basic missionary-style sex with them? It is a logic that is increasingly making sense to some porn stars as fans are able to connect ever more directly with them via Facebook and Twitter.

Few will talk about this, but one well-known veteran put it this way: “A lot of hookers make a few movies just so they can put ‘porn star’ on their escort Web site. That did not used to happen and still doesn't with the top girls. But a lot has changed in the past few years. It used to be girls in porn were unattainable fantasies. But they also used to be able to work five days a week if they wanted to. Now, very few of the younger girls can get that much work.”

Perhaps the clearest sign of this efficiency was the booth at AEE occupied by the legal brothel Mustang Ranch, located over 400 miles from Vegas. The brothel is starting a porn production company using their hookers as stars. They hope to have their first release, One Night at the Mustang Ranch, out by spring. But don’t look for it on DVD. It will be Internet only.

by Richard Abowitz