Summary & Nature of Online Dating

There are literally thousands of dating/introduction service websites on the Web. It is beyond the scope of this website to cover them all, or to include a listing of all their names. Hitwise, a research firm that tracks the online dating world, among others, claimed in mid 2004 that there were at least 850 dating websites that could be identified.

Many people jumped on the bandwagon in recent years, lured by the hope of  making it big with a dating website. However, most are not profitable and there are dozens of dating websites at any given time up for sale. The U.S. market is basically saturated now, and consolidation is inevitable. It has already taken place at the highest levels.

Europe and Asia are the next big markets to see rapid growth.

The United States online personals market has evolved over the last six years. Until recently, the market was fragmented but is now consolidating as the main competitors make acquisitions and tie up the major available routes for online personals services to reach large numbers of potential customers by establishing relationships with the major Internet portals, search engines and Internet service providers.

There is no question that the dating websites used to represent the fastest-growing segment of this industry, and that they have hurt many of the other competing introduction services in the process. However, even off-line competitors say that they have actually helped to increase the size of the pie for the entire market—bringing dating services into the mainstream. Many singles today start out using these low-priced websites and eventually migrate to higher-priced services with more personal service (matchmakers). Many soon realize just how much work it is to surf the Internet and how photos and information about potential mates can be unreliable.

The online personals business as been dominated for the last four years by Match.com, which is owned by InterActiveCorp, and the Personals division of Yahoo Inc.

“Still years behind the United States, in Europe, online personals are expected to be the biggest category for paid content for the foreseeable future” stated Joe Shapira, Spark Network’s chairman and chief executive officer. Latin America and Australia are also seen as future growth markets.

Why So Popular?

According to a Lycos survey of 1,100 people, online dating has become more mainstream. Some important findings:

How Dating Websites Operate – What You Get For Your Money

The online dating services today can be grouped into three categories:

1.  free sites, which make money by carrying advertising, ostensibly to large audiences.

(However, in Marketdata’s opinion, the advertising revenues are not as high as originally forecast, and few are said to be making any money.)

2.  subscription-based services like Match.com, which charge a flat fee.

3.  transaction-based services, pay per use.

In the race to establish “critical mass”, there has been substantial consolidation at the higher end of the market. For example, Ticketmaster acquired Match.com, Matchnet bought Socialnet, and Udate acquired Kiss.com. Most recently, MemberWorks acquired Lavalife.

Despite all this growth, a negative image or stigma still exists for some, when it comes to meeting that special someone online. To some, it sounds like a risky act of desperation, and remains at least one level lower than meeting someone in a singles bar. Even when people do find quality mates online, they frequently will not admit how they found each other to friends and family.

Seeking a mate online is sort of like posting an elaborate personal ad rather than submitting to an interview with a “conventional” dating service (i.e. Great Expectations, Together, etc.). Most sites let you choose a screen name, post a photo and profile and fill out a survey about ideal mates, likes and dislikes, hobbies, etc. To initiate contact with the other subscribers, you’ll pay a fee, usually about $20 per month.