How big is the online smut economy?

The “escort” ads that ended up so embarrassing Goldman Sachs are only a small part of the puzzle. According to The AIM Group, which tracks such things, Backpage.com is the dominant player in the healthily growing “prostitution advertisement” industry online, generating some $26 million in revenues in the last 12 months. Other players in this market, with names like Eros.com and MyRedBook.com, added another $10.6 million in revenues to the pile. (The former big Kahuna in the field, Craigslist, reluctantly shut down its own adult listings in 2010.)

Porn — perhaps because it, unlike prostitution, is often legal — is a much bigger business online, though reliable numbers on the industry are hard to come by, and misinformation abounds. (Both proponents and opponents of online porn have reasons to exaggerate.) One factoid making its way around online, and even into the pages of Wikipedia, is that “the internet pornography industry has larger revenues than Microsoft, Google, Amazon, eBay, Yahoo, Apple and Netflix combined.” That’s just plain wrong. Several years back, the Adult Video Network estimated the total revenues of the online adult entertainment industry in the U.S. to be $2.8 billion; others in the industry suggest this may be exaggerated. (By contrast, Microsoft’s revenues in its most recent quarter were $20.9 billion.)