You can sign onto the popular dating sites, such as InterActiveCorp's (IACI :
iac interactivecorp com new
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 IACI28.52, +0.04, +0.1%) Match.com, Yahoo's (YHOO :
Yahoo! Inc.
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YHOO29.49, +0.66, +2.3%) Yahoo Personals, Spark Networks' (LOV :
spark networks plc sponsored adr
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LOV6.00, +0.20, +3.4%) American Singles.com, or eHarmony and see if anyone is available. But why bother? Especially when you can go to the free social networking sites, such as News Corp's (NWS :
news corp cl b
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NWS20.06, +0.19, +1.0%) MySpace or even YouTube, and do it all for free. The popularity of free social networks, with MySpace having some 103 million members, does make you wonder why online dating sites are still charging. Heck, you can even do your homework for free by going onto Google (GOOG :
google inc cl a
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GOOG378.60, +0.07, +0.0%) and getting the executive summary of someone you're interested in. Yes, I know the paid sites provide some vetting and qualifying, and they cost about $1 a day. But there are no hard statistics on the success ratio of transactions, such as lasting relationships, let alone marriages. And, even Spark Network CEO David Siminoff predicts that the repeat business in online dating will go up from 2.7 times per person.
So, is there really a difference between sites that say they're designed to create lasting matches, and sites that just let you hook up?
Social networks have created a potentially challenging playing field for online dating sites, which have risen in popularity since 2000. Back then a mere quarter of a million people logged on to dating site Match.com from home. Today, there are 3.2 million visiting the country's biggest online dating service from home each month, and 4.9 million, if you include those checking out their prospects at work.
Online dating sites took a bite out of the classifieds business in newspapers and the pages of magazines, once the standard channel for finding love outside of going to swanky or popular bars or restaurants, or networking through friends and family.
Dating sites were the No. 1 item paid for online for three years running, until last year, when purchases of music usurped that top spot.
Yet online dating sites haven't really been a booming business when it comes to sales. In 2005, online dating sites (excluding swinger sites) raked in about half a billion, according to the Online Publishers Association. Siminoff says those numbers are likely off slightly.
Match.com generated $248 million in sales last year and is on a run-rate to generate $312 million this year. Siminoff says that his network will do about $70 million in sales. And, he's estimating that privately-held eHarmony and Yahoo Personals generated about $165 million and $100 million, respectively. Just adding those big four alone gets you closer to $600 million. Still, that's chump change compared to the roughly $12 billion in advertising online.
And today, well, why would a consumer bother paying to be in front of Match's 15 million members around the world when they can find more than 100 million on MySpace, and even more on YouTube?
Just today, I got an email from YouTube, alerting me that someone had subscribed to my videos. And, I got an invite from someone on vMix and MySpace, where someone invited me to be their friend (yah, right).
Are we seeing the slow death of mass-market online dating sites?
Yes and no. Mass-market online dating sites may be dying, but online dating won't, if you "niche-fy" them.
Love is in the niches
That's the view of Siminoff, who's restructured the operations at Spark Networks, in hopes of igniting growth in the company's business. American Singles is Spark Networks' biggest asset, yet it's a distant rival to Match and Yahoo.
Reflecting trouble at Spark, shares have dropped from $7 and change to $5 and change since February.
To Siminoff, the key to turning the company around is breaking down big amorphous groups of people into their own little worlds, defined by faith or ethnicity. It's in these intimate and familiar environments that people will start first.
"Our sense is that people define themselves as being part of a community, ethnicity, culture -- they first look there," said Siminoff. "Then they broaden their search."
To meet those demands of smaller and more intimate groups, Spark Networks has 26 different verticals, from the popular JDate, to ChristianMingle, to BlackSinglesConnection to IndianMatrimonialNetwork.com, to LDSMingle.com, a site for Mormons.
"Our vision of the world is that the consumer has become much more sophisticated," said Siminoff, in our interview. "People are pickier," he added.
Translation: Match's Wal-Mart way of online dating, isn't helping its customers separate the wheat from the chaff.
Siminoff's idea of creating verticals of affinity groups is yet another example of an ongoing trend -- the fragmentation of the audience.
With abundant choice just a click away, people have learned to navigate around the Web and choose where they want to hang out and with whom they want to hang out. Their attention is captured by sites that have deep, rich content, surrounded by a community of like-minded people they can interact with. This is as true for the news and information industry -- hence the rise of niche blogs -- as it is for dating.
Siminoff's vision of the Internet society is on the mark. If I were running a dating site, I'd probably focus on niches too.
But there's no doubt that the big social networks have limited the upside for online dating networks. After all, most people identify themselves as single or married on social networks. You even can state whether you're on a social network to, well, network or to date.
It seems pretty clear that if you want to be identified as in the market, that's pretty easy to do. On the flipside, you can easily find someone in the market as well. Now, I say "easily," but I know it's not easy to search for a needle in the MySpace haystack. Then again, how much easier is it on a paid site? How much easier is it in real life?
Siminoff, who said the median time a marriage lasts is 6 years. As he put it in this very acute observation: "Liquidity in relationships has gone up a lot."
I agree. Maybe in the end, social networks take away some business from the online dating sites. But in the end, the entire market of people dating has just gone up.
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