Online Dating is Serious Business

On the Web, somewhere between the categories of financial information and pornography, is another key sector where people pay for access: online dating services. Rather than exchanging books or CDs for cash, these sites trade on the quite powerful desire of singles to connect.

So, with millions of singles going online to list their hobbies and habits in personal ads, one might assume that the space is one of the last Web frontiers where the garage dreamer can make a quick move online and stake a claim to unlimited piles of gold.

Not so fast.

Actually, the online dating sector is one of the most competitive on the Web, as well as one of the least forgiving to newcomers. Even the pluckiest of entrepreneurs would be wise to examine the landscape carefully and consider the significant number of entry barriers before jumping in. Endless Love

In stark contrast to companies in the e-tail sector, the aim of online dating services is not to turn every visitor into a buyer. Rather, these companies must ensure that every visitor likes what they see enough to pay monthly subscription fees and per-message fees -- a proposition that usually depends upon a sizable pool of appealing members already being registered.

Of course, this notion presents the newcomer with something of a chicken-and egg scenario to overcome: How do new sites gain membership without already having an established roster of candidates?

"One of biggest challenges in our market is reaching critical mass," Bradley Moseley-Williams of Webpersonals.com told the E-Commerce Times. "If you don't have people logging in, you don't have a business."

To compensate -- and to convince casual surfers to open their wallets and become registered users -- nearly all Web dating sites initially offer limited access and communication tools for free.

At one relatively small site, An-OnlineDate.com, "it is free to go on an online date and to send virtual flowers," according to founder Linda Sturgeon. However, while having access to an inbox to receive e-mails is also free, users must purchase credit stamps or a yearly membership in order to hear other people's Real Audio greetings or send an e-mail.

On the other side of the spectrum is first mover Match.com, a five-year-old site with over a million registered users. At Match.com, visitors can place personal ads for free and if interested people answer, respond for free. However, to answer ads posted by other people, Match.com singles have to pay for membership, which runs around $200 (US$) a year.

Love Story

In addition to free offers, the larger, more established dating sites are scrambling to join forces so that their growing databases will keep them well ahead of the competition.

Match.com, which is already one of the largest sites of its kind, is poised to couple with another titan in the Web singles marketplace, the One & Only Network.

Ticketmaster-Citysearch.com purchased both of the dating sites last year and is in the process of blending them. After the transition, the combined sites will have over 8 million user registrations and approximately 1.2 million active members.

As a result, given the already-steep hill that lesser-established firms must climb, online dating startups are working overtime to offer unique features in order to separate themselves from the pack.

Speak Softly Love

Not surprisingly, newcomer DatingFaces.com will not comment on how many members it has, but takes great pains to describe the value of its interactive services.

"We weren't early in the game, but every other company was the same -- Matchmaker.com, One & Only, Match.com -- they are all the same except for the graphics," said DatingFaces producer Kent Argue. "Our love formula is attraction, plus compatibility, plus commitment."

The question remains, however, whether users are willing to trade sheer size and popularity for something a little different.

Argue and DatingFaces are willing to bet that they are. According to the company, a patent-pending matching program will soon enable it to be "the only site that focuses people to work within a set framework, so visitors can find the person who will really appreciate them." Love Is a Battlefield

Beyond the scramble for members, mergers, and the quest for innovation, online dating sites face an additional foe: age-old stereotypes.

Even the major dating sites struggle to overcome the widespread notion that people who use escort services and personal ads are undesirable in some way, or "leftovers."

In fact, Webpersonals' Moseley-Williams is quick to point out that no one gets paid to place a personals ad at the Webpersonals site, and that most of the company's members are educated professionals living in major urban centers.

Still, the most effective counter-argument against such outdated thinking may have come in the form of the 1998 film "You've Got Mail," starring Tom Hanks and Meg Ryan.

"People did not have a good understanding of what Internet dating was, and there was some negativity about it before the film made falling in love with someone you met on the Web an okay thing to do," said Match.com's Emily Livingston.

By Elizabeth Blakey
E-Commerce Times
Original article

Europe Falls in Love with E-Dating

Such sites in the region are booming, and they're using romance aids such as street parties and mobile services to boost their membership

On Feb. 13, thousands of young people will pour onto the streets of Paris, Milan, and Barcelona. But they won't be protesting -- they'll be looking for love. The Valentine's Eve street parties, dubbed "St. Single's Day," are sponsored by Paris-based Meetic.com, Europe's leading Web matchmaker. The festivities will include DJs and speed-dating stands, where singles have only a few minutes to chat up a potential partner.

Yes, now even Latin lovers need help playing the seduction game. Online dating, virtually unknown on the Continent five years ago, is taking off in a big way, even as the phenomenon seems to be slowing on the other side of the Atlantic.

SPREADING CONNECTIONS. Revenues of the leading European dating Web sites will more than double over the next five years, from $200 million to $450 million, predicts Paris-based analyst Olivier Beauvillain of consultancy Jupiter Research. While sales in the U.S. are still higher than in Europe, they're expected to grow only 9% this year, to $515 million. "The European market is the most exciting right now," Beauvillain says.

The region's biggest online dating service is Meetic.com, a private company launched three years ago by Web entrepreneur Marc Simoncini. The site is set to hit 10 million members around St. Single's Day and will book around $55 million in sales this year. In France, a country inextricably linked with romance, one adult in 15 is a Meetic member. In Italy and Spain, it's one in fewer than 50.

In these and Meetic's eight other country sites -- Austria, Belgium, Denmark, Germany, the Netherlands, Sweden, Switzerland, and Britain -- membership is soaring by as much as 20,000 a day. Over the next six months, four more country sites will be added -- Poland, Portugal, Greece, and Ireland.

PROFILE VETTING. Meetic works similarly to the well-established and world-leading U.S. dating sites like Yahoo! Personals (YHOO ) and Match.com, a property of IAC/InterActive (IACI). Members may join for free, post their profile, and browse those of other members. To use premium services, like personality matchmaker MeetShake -- which cross-references members' preferences -- prices start at $18 a month. About 10% of Meetic's members pay a subscription fee.

To keep things clean, each profile is individually checked by a Meetic moderator. Another software system weeds out users who post rude messages during subsequent chat sessions, which can lead to being blacklisted from the site.

Europe may be playing catch-up on Internet dating, but it's not copying the American model from A to Z. "We don't date exactly the same way, so it's logical we should offer something different," Simoncini points out. For example, a U.S. dating service would be unlikely to invite members to a street party, since most Americans wouldn't consider that a great venue for meeting people.

SEEKING LA DOLCE VITA. But street parties are a natural for Europeans who are accustomed to casual encounters on street corners and in sidewalk cafés. Francesca Colombo, 38, an asset manager in Milan, says she's looking forward to the Feb. 13 fiesta in the city's fashionable Corso Como area. "I went to a party Meetic organized in a club last July, and it was amazing," she recounts, although she didn't meet Mr. Right.

Other differences exist, too. Visit almost any dating site in the U.S., and one of the first search criteria is "location." "We're products of the McDonald's generation," says Marc Lesnick, New York-based conference organizer for e-dating and personals' Web sites. "Not only do we want the love of our life to be tall, blond, and intelligent, but also within 50 miles from home!" he explains with a chuckle. But according to Simoncini, Europeans are more inclined to move if their perfect match is far away.

Hence, one of Meetic's premium-search criteria is common languages. Says Milanese asset manager Colombo: "I speak Italian, French, and English, so I'm not necessarily focused on dating an Italian." Even the first baby born to a couple who met on Meetic was between a francophone Swiss woman and a French man based in Canada.

Distance may not always be a huge issue, but it doesn't stop Europeans from having fixed ideas about other nationalities. According to a Match.com survey, Swedish women are most interested in dating British men, and vice versa. But only 12% of French and Spaniards would consider pairing up with a Brit. Top on almost every country's love wish list: the quintessentially romantic Italians. Plus, a Meetic-commissioned study by French polling firm Ifop found that among all Europeans, Germans have the hardest time finding a date -- online or off.

NICHE PAIRINGS. Web matchmakers say once Europeans -- whatever their nationality -- decide to take the plunge and date someone, they stick to one at a time. "Whereas New Yorkers are often happy to see three people at once," comments Kevin Cornils, Match.com managing director for Europe, the Middle East, and Africa.

The dating-style differences across the Atlantic haven't stopped veteran U.S. sites from seeking to draw European interest. Match.com has 9 million European members in 13 countries. It also has affiliates like MSN, Tiscali, and T-Online, which pay to use Match's member database. Match originally launched in Britain in 2001 and hit the Continent 18 months later, applying its U.S. know-how to new markets.

Just as well, because e-dating services are struggling in the saturated U.S. market. Match.com cut 30 U.S. employees last September, while an American rival, True.com, let go of 90 employees. Competition from niche sites such as ChristianCafe.com and DateMyPet.com is pressuring general Web matchmakers.

MOBILE BET. Does the same fate await European dating sites? Not yet, says Lesnick, adding, "but many may have to differentiate their offers to survive." The U.S. site Gay.com, for example, boosted revenues from its gay and lesbian membership by adding an online clothes shop and partnering with travel-booking sites. In Europe, Match.com is considering a photo service similar to America's LookBetterOnline.com, which does a roaring trade charging $129 or more for 12 professional digital-portrait shots that online daters can post with profiles. The photographers can even come to your home or work.

In Europe, mobile-phone dating services could offer hot growth potential. Meetic has paired up with mobile operator Vodafone (VOD) throughout the Continent to offer matchmaking on the go. Using SMS (Short Message Service), Wireless Application Protocol (WAP), or iMode services, singles can access the Meetic database and choose to contact other members.

Although mobile revenues now account for less than 3% of Meetic sales, Simoncini expects this to rise sharply by next year and predicts it could eventually hit 50%. Match.com plans to launch a European mobile service this year as well.

PRODUCTS "DELIVER THEMSELVES." Could European investors fall in love with online dating? Simoncini hopes so: He plans to seek an initial public offering for Meetic in the next six months. He's encouraged by the success of PlanetOut (LGBT ), the U.S.-based gay-themed dating site that raised $41 million when it went public last October.

"As business models go, online-dating sites approach perfection," says Simoncini. "All we needed was two months of free services, and then word of mouth took over. Now our customers are our products, and they deliver themselves to each other."

That's not all they deliver. Remember the Swiss-French baby? It was born only nine and a half months after Meetic launched. Today, the site receives daily e-mails with news of many more Meetic weddings and children. Looks like online dating's European honeymoon could go on for quite a while.

By Rachel Tiplady
Businessweek
Original article

Online Personals: Big Profits, Intense Competition

FEATURE: If money can't buy you love, what's the explanation for the overflowing cash registers in the online personals space -- where high-traffic destinations have found big profits in user-created content?

When success stories in the consumer-focused Internet are told, companies like eBay and Amazon.com will hog the limelight. But, for thousands of Web sites on the matchmaking bandwagon, there's no bigger gold mine on the Internet.

"We are the eBay for human beings," declared Jeff Titterton, vice president of consumer services at PlanetOut Partners, which runs online dating services for gays and lesbians.

"We've hit on something that people are willing to pay for on an ongoing basis. And, it's all user-driven. The users create the all content and the users pay for it. It's a forgotten part of the paid content sector," Titterton said in an interview.

It has become such a big business that most major newspapers, including the Boston Globe and the New York Daily News, have added online personals sections to their Web sites. And, you can see those thumbnail photographs and little blurbs of people looking for love on just about every high-traffic Web site.

A study from the Online Publishers Association (OPA) reckons the market for paid personals online exceeded $300 million in 2002, a three-fold increase over the previous year. This year, that figure is expected to jump even more, prompting moves by the bigger niche firms to expand into offline events and tour packages built around matchmaking.

Intense Competition
But, with the success comes intense competition and the proliferation of rival services has raised the stakes to the point where the online dating 'wars' are considered the most feisty, where fierce rivals look for every little advantage to differentiate themselves.

Match.com, which counted more than 766,000 subscribers for its $24.95 a month service at the end of the first quarter this year, said the business is now fully profitable. Match.com spokesperson Trish McDermott said revenues in 2002 topped out at $125.2 million, a 154 percent hike over the previous year. Profits in 2002 reached $36.1 million, up from $2.7 million the previous year, she added.

The business model is simple and straightforward, McDermott explained. Users utilize the Web site interface to create catchy profiles. That content is available for free to any visitor. However, if you want to make contact with the person listed in the profile, that's when the content goes behind the premium curtain.

In addition to the $24.95 per month fee, McDermott told internetnews.com there are other member options ($49.95 for three months; $79.95 for six months or $99.95 a year. On top of that, Match.com has added enhanced features to generate revenues.

For instance, McDermott said the company is extending the anonymity of online personals beyond simple e-mail exchanges and into the phone. "It's the next step in dating, whether you're online or offline but, people still want to maintain that anonymity," she explained. Now, Match.com members can pay extra to make a phone call to a prospective date without once exchanging phone numbers (Match.com is the backend provider for the phone service).

"For some people, anonymity is a tremendous benefit when dating online. More than 50 percent of our subscribers say that after exchanging three e-mails, they still didn't feel comfortable giving out phone numbers," McDermott said.

Like Match.com, competitors big and small continue to push the envelope, looking for the one distinguishing factor that gives them the edge in the crowded market.

Mega-portal Yahoo has launched an advertising blitz, including commercials on the Academy Awards telecast, to promote its service. That's on top of the free video and voice clips carrot it's offering to lure new subscribers.

That new feature lets users add free 30-second video and voice clips to their personal ads on the portal. It gives subscribers the option of recording a short voice greeting through the phone that accompanies their text advertisement. Those with a Web cam can record a video clip.

Like Match.com, Yahoo sells tiered subscription packages that range from $19.95 per month to $89.95 a year.

Boston.com, which is owned by the New York Times, recently launched a 'Second Chances' feature that allow unregistered users to publish short text-based notes to people with whom they had a chance encounter.

Lisa De Sisto, vice president and general manager of Boston.com, told internetnews.com the 'Second Chances' feature is used to lure new users to its subscription-based personals service. "If you had a chance encounter with someone but didn't get to connect, you can post a message on 'Second Chances' with your e-mail address. It's a free service. The idea is to get people into the service to browse through the ads," De Sisto explained.

There's an added incentive for Boston.com in that those posts generate page views, which translates into inventory for traditional forms of online advertising.

Boston.com isn't using the per-month subscription model. Instead, the company sells credits (for $24.95, users can purchase 25 credits). Those credits can then be used to buy access to reply to the personals. De Sisto said more than 65,000 members have registered for Boston.com's personals, with 10 percent of those purchasing credits.

Boston.com has also fitted an instant messaging (IM) feature into its personals, allowing users to exchange credits for a chance to send an IM greeting to users who have posted free ads.

"We're generating about 4 million page views a month. And, on those pages, we're serving targeted ads. We have advertising geared to the online dating demographic," De Sisto explained.

Boston.com's personals is powered by Spring Street Networks, a New York-based firm that's the back-end provider for many sites offering personals as a side business. Spring Street Networks builds integrated private-label services.

PlanetOut, which has also found profits in online personals at its Gay.com and PlanetOut.com sites, believes it has an edge on the competition because of the niche factor. At Gay.com, Titterton explained that the user-generated paid content is turning into a major cash cow.

The site allows members to post profiles and browse for free. Targeted only towards the gay and lesbian community, PlanetOut charges users to reply to ads, with fees ranging from $16.95 per month to $79.95 per year.

Titterton said the success of the personals space shows there is huge value in premium content online, if that content is presented in unique ways. "You cannot be a paid-only site and expect to do well. You have to give some stuff away and hook subscribers to pay for extras to attract critical mass. That's what we've done," he explained.

While PlanetOut is locked in the dogfight with all the other personals sites (the competition targets the gay and lesbian community as well), Titterton believes the "community aspect" has allowed the company to maintain its toehold in the market.

"We have an inherent advantage in that our audience is already familiar with our focus and they're comfortable with it. It allows us to expand beyond mere matchmaking. We can expand the business to include community listing and offline events. It's about giving people the methods for communicating with each other in a comfortable setting. That's why online matchmaking services are so successful," Titterton added.

On the intense competition, Titterton said there's room for everyone, noting that the market is still nascent, especially internationally. "This is the current gold mine. We've hit on something that people are willing to pay for on an ongoing basis. And the barriers to entry are really low, so it's logical that lots of sites are launching personals sections," he said.

"Any site with some traffic wants to get in and launch personals. Even sites that have no reason to have personals on their site. They have nothing to do with the community but because it's easy to plug in a bit of software, the space becomes very competitive. But, I believe that niche always wins. The niche players will always do very well," Titterton added.

Match.com's McDermott agreed, but noted that the bigger players must spend big on marketing to stay ahead of the competition.

Stigma Factor
Then, of course, there's the stigma factor. Finding a mate on the Internet is still somewhat taboo and most of the major players have tailored advertising campaigns to attack the stigma head-on. "We poke fun at the stigma in our ads," McDermott said.

Boston.com's De Sisto said the stigma factor has not hurt business. "It hasn't really been an issue for us. I think the stigma is disappearing because so many places offer online personals and speed dating services. People aren't embarrassed anymore to say 'I met my husband on the Internet'," she added.

While acknowledging the stigma is definitely a negative factor in the business, PlanetOut's Titterton said his company in a lucky spot because gays and lesbians were among the early adopters of the Internet as a matchmaking tool. "In the early 1990s, the AOL chat rooms helped to created this space. The stigma is still there but, in our community, we don't have to address that too much," he explained.

As thousands of sites look for that missing dollar among lonely Internet surfers, there is the worry that the business will inevitably fade.

Hardly, insists Titterton. "The money is in the international markets. That space is largely untapped. The next big wave is to go overseas and see what happens there," he declared.

Titterton's enthusiasm, unsurprisingly, is being echoed throughout the space. And, judging from the major dollar signs and noisy cash registers, who'll doubt him?

By Ryan Naraine

Rising STD rate sparks online dating sites

(CNN) -- When John got divorced after 12 years of marriage, he took a deep breath and launched into the dating scene.

"And wham, with my very first girlfriend, I caught herpes," he says. "You feel betrayed and all of a sudden separated from the rest of the world. I thought at the time that the girl who gave it to me and I were the only people in the world who had it."

But John and his date are far from alone. And the growing number of people in similar situations has created a new industry: Internet dating sites just for people with STDs. From MPWH.com to stdmatch.net, Web sites abound for the infected who want to date the infected.

It's not surprising once you see the numbers. One in four women is infected with genital herpes, and nearly one in five men according to the Centers for Disease Control and Prevention. And a study in this week's Journal of the American Medical Association finds that one in four women has human papillomavirus, which can cause genital warts and cervical cancer.

Once John got over the initial shock of his diagnosis, one of the first things he did was go online.

"I went on Craig's List and posted a note that said, 'I live in Charlotte, North Carolina, and I'm a decent professional man, and I've ended up with this.' Someone then contacted me and said, 'Have you heard of Charlotteh?'"

Once John joined Charlotteh.com - part support group, part dating site for people with herpes - everything changed. "I would have been happy to have had just one person to unload everything I was feeling," he says. "Instead I found more than 500."

"Charlotteh" was started two years ago by Pam - who, like John, doesn't want her last name used. She discovered she had herpes, and dating had become difficult.

"I'm 27, working on a Ph.D., own a second home, I have a master's degree, but when I go into a relationship, I bring this with me, and that's hard," she says.

Even knowing when to tell a prospective boyfriend about herpes is tough. "It's confusing, because you don't know when the right time is to tell somebody. Should you be up front and get it over with or wait until the person develops feelings for you? It's a big ethical problem."

For Jennifer Nicholas, it was more than just an ethical problem. Once she told men she was dating about herpes, many ran in the opposite direction.

"One guy, I thought he was Mr. Perfect. But then when I told him that I had herpes, he said, 'Forget my phone number, forget my address,' and he blocked me from being able to message him on the computer," she says.

Jennifer joined atlantahclub.com, another site for people with herpes. These sites immediately take several questions off the table. Members don't have to worry about when to tell other members they have herpes, since everyone in the group does. And they don't have to worry about spreading herpes, since the other members already have it.

Pam says at first, people are very nervous about joining, because it may be the first time they identify themselves as having herpes.

"People show up for their first support group meeting and sometimes they turn right around at the door because they don't have the courage to come in," said Pam. But then later, "I have people sending me thank you e-mails all the time. A guy came to a support group meeting and sent me flowers."

Since many of the members have not come out to family and friends, a password is needed to get into the photo gallery showing pictures of social events and to receive any specific information about members.

A big part of STD Internet groups is social outings. One site, H2Ofriends.com, lists events for people with herpes in some 40 cities, from San Francisco, California, to Cedar Rapids, Iowa.

Some events attract hundreds of people. They look just like any other large party. "When we go on outings, we don't put a sign up in the hallway saying, 'Meeting of the Charlotte herpes club,'" Pam said, "Once we went to dinner and there were 30 of us and the hostess asked, 'What's the special occasion?' My friend said, 'We're the Charlotte pottery club!'"

CNN Medical News senior producer Jennifer Pifer contributed to this report.

By Elizabeth Cohen
CNN