Yes, according to searchterms.com, which I believe is the source of the information.
In December 1998, sex was first and mp3 was second. In April 1999, mp3 was first and sex was second.
According to their methodology page:
We are often asked from where our list comes, usually by those wanting to verify the validity of the rankings. While we have to keep the source of the data confidential, we can tell you that it's from a major search engine, and also that each iteration of the list comes from a totally raw sampling of no less than a million searches, which is then massaged into a ranked list. Given the source and the sampling size, statistically the rankings should be accurate to most any of the major, general search engines.
In support of the accuracy of our list, in a Newsday article a top executive from a major search engine said "The terms on the site are fairly accurate, in my opinion," and further said he believes our list does indeed come from a top engine.