Category: All Interviews

Spark Networks CEO, David Siminoff – OPW Interview

Posted on October 20, 2006

Ds1OPW INTERVIEW — Oct 20, 2006 — Spark Networks owns American Singles, JDate, and acquired the MingleMatch group of niche dating sites last year. I had the pleasure of speaking with the CEO, David Siminoff, in person in Palo Alto. – Mark Brooks

What's your background David?
I’m a Silicon Valley guy. I grew up here. I went to Stanford, and I majored in English and math/computer science. After graduating, I attended film school at USC but quickly recognized my lack of talent in this area and instead went to work for Drexel Burnham, which is an old investment bank. Then, I ended up going to business school at Stanford. Around the same time, I founded a company called EastNet that became the largest trader of bartered media properties in Eastern Europe. We would go to an American company that had libraries of TV shows which hadn’t been seen in Russia and Eastern Europe. We would trade them for ad time and sell it back to Coca-Cola and others. I cashed out and tried to make it on the pro golf tour, but failed miserably. I went on to spend nine years plus at Capital Group, which is now the largest money manager in the world. I was sitting on a number of boards, and in 2004, I got a call from the founder of JDate, and he said, “Hey we’re going to do a U.S. listing. We need to expand our finance committee and want a bean counter kind of guy to sit on the board.” That was me, so I said, “Sure that’d be great.” 

I got here and the company had a number of problems. After just a few months, the new CEO stepped down, and they said, “Okay Dave, you go fix this.” So I stepped in as CEO. It’s been two years of very, very hard lifting. But I’m a nice Jewish boy, so it has been a great honor to be able to help turn around and grow JDate and the other Spark Networks properties. Now, in my third year, it’s become a very nice story. I love the team we’ve put together and our numbers speak for themselves. You can see the progress in our financial results. 

What’s been your biggest challenge?
The company had been a damn-the-torpedoes, grow-at-any-price, let’s-just-go company. And that was the right strategy in 2000 and then in ’01, ’02 and ’03. Then things changed dramatically in the middle of ’04 when the cost of online marketing started to skyrocket. All of a sudden, we were paying a lot more for a subscriber than we were earning. You don’t have to be an all-star Wall Street guy to know that is bad business. And so, we had to right-size the company. And that’s what happened.

Why focus on niche dating sites now?
The company was founded in 1997 with the launch of JDate for the Jewish single market. Now, I can arrogantly say that JDate is the best niche dating site in the world, by far. There hasn’t been a great niche vertical yet, that I can think of, other then JDate. And I think there’s room for others.

You can’t share little, personal, intimate granules of detail with someone unless you’re in an environment that you trust and you feel relaxed and you feel kind of protected. JDate accomplishes that clean, well-lit feeling by virtue of being “owned” by the community. We change features on JDate and members will track me personally on my cell phone to yell at me for moving a button three inches to the left. It’s a wonderful feeling that way, and what we’ve learned is that the communities “own” these sites, we don’t. 

How’s the MingleMatch acquisition working out for you?
Revenue from our Other Businesses Segment, which largely consists of the properties acquired through MingleMatch, grew by 118% in the second quarter of this year. This segment was the largest contributor to our revenue growth. We’ve rebranded, renamed and redesigned a number of those properties and have increased the marketing efforts, and they are delivering solid growth.

People are more likely to remember niche dating sites. Do you find they’re more efficient?
Yeah! Word-of-mouth travels fast through small communities. Eighty percent of our traffic on JDate comes from people bookmarking it. They didn’t click a banner ad. No one sent them an email. We didn’t have to pay them to come. They just showed up at our front door. They knew the name, like eBay and Yahoo and Google. I wouldn’t put us in those leagues, but in the Jewish dating community, JDate has that kind of brand attribution.

Why did you rename ChristianMingle.com as Relationships.com?
Relationships are about trends and moods and periods of your life. Relationships imply movement. Relationships aren’t static. Everything is relative to everything else. So there’s kind of a natural dynamism there and a voice that speaks to how people really want to connect. We have a very high hurdle to build to in order to fulfill that vision, but that’s what we’re hoping to do.

What will become of AmericanSingles.com?
For a long time, AmericanSingles had been poorly financially managed more than anything else. Now, the vision for AmericanSingles is to manage it in a financially disciplined manner.

Will you be expanding into Europe?
I don’t think so. You know, Europe for us right now would add little value. We add value by understanding and focusing on a number of targeted communities in the United States. So we probably won’t be expanding into Europe.

I love some of the European sites, but I have 184 to-do list items just to get all our current plans launched and properly managed. It falls off the edge of our plate, in the grand scheme of things.

Match is very active in Asia. Any thoughts on Asia?
We add no value there. We do Hebrew well. In Israel, we’re dominant, but beyond that, if you’re going to try and go into Japan, it’s over, too late. Match can go play in that field. They are a huge company with tremendous resources to do all that stuff. We’re tiny. Our whole company could fit in this restaurant [Palo Alto Golf Club restaurant and conference area].

How many people work for Spark Networks now?
At the end of last year, worldwide there were about 190 employees. We have a bunch of call center folks. The executive team is approximately 20 people.

I’m looking forward to reporting a summary of the quarterly and annual financial reports at the Miami internet dating convention in January. What are your revenue and profit goals?
I think you’ll see ad sales become a little more meaningful for us. But we want to be careful with advertising because the actual ad has to be relevant and has to add value to the site. I don’t want to sell things that are annoying to users.

We’ve gone from “oh my God, are we going bankrupt” to “okay, no more water is coming in the boat now” to “hey, we’re growing and generating a lot of free cash.” 

Meetic Founder-Chairman, Marc Simoncini – OPW Interview

Posted on October 9, 2006

Meetic_3OPW INTERVIEW — Oct 9, 2006 — Meetic is the second largest internet dating company in the world, next to IAC’s Match.com. Here’s my first interview with the founder. – Mark Brooks

How did you get started with Meetic? What is the founding story?
I created a portal in Europe called iFrance in ’97 which was sold to Vivendi Universal in 2000 for $200 million dollars. Then I worked for Vivendi for 18 months. I looked for new ideas and wanted to launch a subscription based business. I spent a lot of time analyzing many business models and the dating business was the best one for me. Firstly, because it was subscription based and secondly, there were no serious competitors in Europe. So I launched Meetic in July ’02.

Why did you follow up with the launch of Ulteem? How is it better than Parship?
Ulteem was launched in its final version this summer, three months ago. We wanted to create a new kind of product and decided to analyze eHarmony or Parship. Ulteem is more modern. For one thing we are offering video on Ulteem. Users can record a three part video profile which is really important to know people better. Another key difference is that we don’t need to invest heavily in marketing across Europe as  Meetic is already launched in 13 countries in Europe and according to comscore we’ve 8 millions UV, we have also 90 distribution partners including Yahoo in France, Italy and Spain, Wanadoo in France and Spain, Libero in Italy or AOL in Germany. So, to launch Ulteem, we just have to advertise on the Meetic pages, and ask our partners to plug it on their portals. That’s why after few months of activity in France, Ulteem is already bigger than Match.com and Parship! That’s how Ulteem is growing pretty fast.

Talking about Parship, it only really exists in Germany. They say they have 1.x million users but we estimate only one third of these users are outside of Germany. So for now we don’t see any serious competitors for Ulteem at the European level. In Germany, of course it is more complicated for us because of Parship, but outside of Germany, Ulteem will be probably the leading relationship website thanks to our Meetic audience and 90 partners network in Europe.

How does the pricing of Parship compare to Ulteem?
It’s close. The main difference is that on Ulteem you can initiate contact for free. If you want to read the message you have to become a VIP member, a Premium user. So you can send messages for free but if you want to read a message or, of course, to answer you have to subscribe. That’s the difference in term of model but in term of pricing, it’s close.

And you have a social networking service also?
Meetic has three brands. The first one is Meetic, of course, the second one is Ulteem and third one is Superlov. We launched it in France in its first version at the beginning of the year, and it will be launched in its final version shortly all over Europe. The model is based on mobile revenues, and you can use it both by web and by mobile. We have 19 partnerships with mobile carriers in Europe, you can access Meetic too through mobile carriers all over Europe. It took us three years to be able to sign these 19 deals.

How do you view Match.com’s recent announcement that they are spending 4 millions Euros to enter the market?
Meetic is dominant in Europe according Nielsen or Comscore. Meetic is #1 in France, Spain, Italy, Switzerland and Netherlands. A huge part of Match.com’s traffic comes from MSN. So, in fact, the Match brand doesn’t really exist, 32% of French people know Meetic and only 3% know match.com, according IFOP. The pride of Meetic is, Match was 26 times bigger than Meetic in 03, and this year Match worldwide is only 3 times bigger than Meetic. But Match is worldwide and Meetic is still only in Europe. So now Meetic is probably the second biggest casual dating website in the world in terms of revenues. Meetic has become a problem for Match because we are growing so fast.

So the answer for Match is to try to compete with Meetic in France as a substantial part of my revenues still come from our domestic market. Match already tried to take the French market in 04 and they decide now to invest 4 millions Euros on a brand nobody knows. And they say they will invest three times more than Meetic in France but they are making a mistake. Meetic invested close to 40 millions Euros in France over the last 4 years. So I don’t know why and how they could be able to take the French market with only 4 millions Euros. They say, “we want to add 7 million profiles”; to do that in one year, they have to invest between €50 and €60 million, it seems quite ambitious …. I think their strategy is to try to hurt our stock price to make our life more difficult if we decide to make a significant acquisition, which could be localized in a significant market …

The problem with Match is they had a deal with MSN worldwide, but the deal was ending, and Meetic was able to make an offer to MSN. With MSN, Meetic would be the dominant player forever in Europe, and without the MSN deal, Match would disappear from Europe. So they had to keep the deal, even if they had to pay a lot to keep it because they can’t lose the business. They certainly had to make a better offer than we did to secure the deal, and this could be seen on their 06 figures.

Some US companies were very successful in building internet business models, and we are really admirative about their success. But as for dating, we think we have developed a good, or maybe even better model.

Have you considered entering the USA market? 
We’ve considered entering every market in which we think we have a chance. So we could enter the U.S. from scratch, or by acquisition as we made in China or Brazil. We never say never. We look for the right timing and the right way to enter each market, even in the U.S. We think we could propose a new kind of dating website in the US, as we have done in Europe, with a brand and spirit that could be fresher and younger.

Would you be disappointed if you didn’t have a presence in the US within the next 12 months?
No, we have to invest first in Europe, and then we will see if it’s possible, or not, to invest or to make an acquisition in the
US. There are few US companies that are for sale.

What is your goal for the next 12 months?
The strategy is to become number one in Europe with Ulteem and to launch successfully our new Meetic product (V3) all over Europe.

Parship CEO, Dr Arndt Roller – OPW Interview

Posted on September 30, 2006

Drarndtroller_1OPW INTERVIEW — Sep 30, 2006 — Parship is Western Europe’s ‘eHarmony.’ It’s the leading internet dating site focused on long term relationships and currently operates in 10 Western European countries. Parship started out in Germany, Austria, Switzerland, Belgium and the Netherlands and more recently extended into Italy, France, Spain, and now into the UK in 2005 and Sweden in January 2006.  Here’s my interview with CEO, Dr Arndt Roller. – Mark Brooks

What is Parship’s founding story?
Parship.com was founded in 2001 by two managers of holtzbrinck networxs, the venture capital arm of Verlagsgruppe Holtzbrinck, a very quality minded publishing house (they own e.g. Macmillan Publishing) publish “Nature”) with roots in Germany. Holtzbrinck demanded a quality minded approach to the online dating classifieds. When they looked at the market they saw a lot of services that were oriented towards flirting. That’s when they met Professor Schmale, the scientific mastermind behind the Parship concept, and we started our service. From day one, Parship was oriented towards long term relationships. Parship is based on a mandatory, scientific matchmaking process, plus integration of personal preferences. We do things very different from the industry norm. For example, you won’t see “picture galleries”, not even pictures on profile pages until the time that the other person allows exactly that to happen.. This might look very odd when you look at the entire industry where pictures are everything.

Who are your competitors?
In the premium or long-term segment, Parship enjoys a very dominant market share. Havng said that, across Europe there are about 10 copies of the Parship service from small players. Some of them are former employees of Parship that have just set up their own service. But they have shown limited growth. One is a service called, Elite Partner, which was started by a former Parship marketing manager, and one is called be2, launched by a former Managing Director of Parship, who had to leave after very short time in the job. They all try to look very similar to Parship and are basically imitations.

How do you market Parship?
Many online dating companies seem to rely on keyword advertising predominately. For us, we’ve traditionally always worked very heavily with quality-newspapers and -magazine brands. Parship is integrated into their online-sites. We have 190 different corporate partners across Europe. Parship has a very good reputation in the B2B community, it´s been been built over 5 years and that helps us now as we approach more and more potential partners. In addition to that, we have significantly increased our brand marketing.

How did the UK launch go for you?
The UK market is probably the most expensive to enter, together with the German market. The big advantage we have is that we’re basically competition free in the long term relationships segment in the UK market. From what I can see, eHarmony has little impact in the UK and Europe. 

Could you give a couple of examples of how the UK and German markets are different from each other?
There are many elements. One obvious area of difference is the different use of payment methods. In the UK there’s a significant amount of people using credit cards. In Germany there’s much lower credit card usage. In many European countries credit cards are either not accepted in general or they might be accepted but not over the Internet. Second, the big media portals behave in very different ways. So, striking deals with them can be difficult and expensive. 

How does Parship pricing vary across Europe?
It depends on market pricing sensitivities. Price points vary as the result of our marketing experiences in each market. The same goes for many of our European competitors. In Germany we have membership choices, based on monthly pricing;, a 3 month membership costs 120 Euros, 40 Euros a month. A 6 month membership, which most of our subscribers use, costs 179 Euros, 29 Euros per month.  The 12 month costs 263 Euros, 22 Euros per month.

What advice would you give to the CEO’s of U.S. corporations interested in entering the European dating market?
Spend a lot of time in Europe first and don’t look at Europe as one market or as one big country. I mean, most Americans I’ve met apart from those that have lived in Europe for a long time can’t help but look at Europe as one country.  As long as you have that mindset, don’t go to Europe.

From what I’ve heard about China and India that is also not ‘one’ country. The same with the U.S.A. actually. New York is not ‘just like’ San Francisco. Baltimore is not Little Rock, Arkansas. I’ve got tremendous respect for people entering the U.S.market from the outside because I think that’s a very, very difficult thing to do successfully. The same applies for companies from the US or Asia trying to enter Europe with its 10 -15 relevant local country markets.

When we look back at the last 10 years, there must be a reason that so many American online companies that decided to enter the European market have failed.

So what would you say would be the biggest market investment that you learned in the last couple of years with Parship?
Quality might take a little longer but will definitely reap much bigger rewards than a quick and dirty approach that many people follow. That’s a lesson across Europe. 

What do you mean by quick and dirty?
Going into a market not really caring about the quality. For example, taking money from day one. Not looking after user complaints. That kind of approach is what I mean. That sometimes seems to work for some of our competitors but we’ve learned that e.g. waiting longer before asking people to pay and investing more time before you launch a service pays off.

Does Parship’s matchmaking profiling really work?
Yes, definitely. And we are continuously improving the matchmaking process. For the first half of 2006, 38% of our subscribers tell us they left the service because they found the love of their life. Cynics tell us that with such strong success rate we might destroy our future market chances. That´s of course completely wrong. Such success leads to a very high customer satisfaction level, which is important in many industries but is absolutely the most important key metric in our business, since it builds trust, confidence and positive word-of-mouth. As long as a user is really looking for a long-term relationship, in Europe, Parship is the best way to find the right partner. If they are looking for casual date we are just not right.

How fast will Parship grow over the coming year and what are your goals?
We will grow between 50% and 70% over the coming year, faster than market growth and despite increasing competition.

First of all, internationalization is an ongoing process for us
. Launching a country doesn’t mean there is no further work to do. So, developing and growing all our Western European services is our goal. Then there’s a commitment from all of us at Parship that we will focus only on long term relationships. Like I said, we have no interest whatsoever in going into flirting and dating. We’ll leave that to the experts in that field. That leaves us with some interesting opportunities around the quality and premium approach.  We are currently working on new business developments that we’ll talk about once they’re launched. I don’t want to talk about things we haven’t really done yet.

Are there any countries outside of Europe that you have your eye on?
Yes.

USA, per chance?
First and foremost, we consider ourselves a European company, with roots in Germany.. We are the number one premium service in Europe. To maintain that and benefit from the fantastic growth opportunities will keep us very busy. But if there is an interesting and compelling opportunity outside of Europe, we will definitely go for it.

OPW Interview – e-Cyrano CEO, Evan Marc Katz

Posted on September 22, 2006

EvankOPW INTERVIEW — Sep 22, 2006 — Evan Marc Katz is the author of “I Can’t Believe I’m Buying This Book – The Common Sense Guide to Successful Internet Dating” and has been the CEO of profile makeover service e-Cyrano for 3 years.  His candid, no b.s. approach is refreshing and hits home with his audience. – His audience is YOUR audience, online dating users.

What are the top 3 mistakes users make when they’re putting their profile together?
I think online dating users undervalue their profile. The perception that nobody reads these things is simply not true, especially when you’re talking about people who are looking for relationships. Just the perception that the profile doesn’t matter leads people to doing a half-assed job and then wondering why things aren’t working for them.

Secondly, most people write generic profiles. The only way to have success online is to have a profile that doesn’t sound like anybody else in the world could possibly write it. Yet the vast majority uses lists of adjectives and activities that you’ve seen in a million other profiles – none of which has any currency if everybody lists the same things.

Finally, people don’t consider their audience. They use their profile for personal statements or confessionals and either write about their philosophy of life, write about how they want someone tall and rich and good looking, or write about how they’ve been burned by people in the past. People say all these things that are just not appropriate for personal ads. They should be aware that profiles are just advertisements. And if they’re writing for an audience, it’s in their best interests to think of what people want to hear.

If you had the power to change one thing in the online dating industry, what would it be?
If I were running one of these sites I would devote myself fully to enhancing the customers’ chances of success by giving users the tools they need to succeed. Unfortunately, because this is ‘online dating’ and technology is involved, companies focus on the shiny new toys. Text messaging, avatar chat, all these other things that are not really the core of online dating. The core is a vast database of people, all of whom are single and looking for connection…and have no idea why this isn’t working for them. Dating sites need to listen to their users and give them what they’re requesting. There is such a tremendous state of user dissatisfaction within our industry. You want to run a top-notch online dating site? Work on giving your members the tools they need, and help them feel good about the online dating process. This is what I do for a living.

Basically, I’m the ultimate online dating optimist. I help people believe that they have control in making online dating work for them, no matter who they are and no matter what their circumstances. I show my clients how to use these sites and I provide them with photos, essays and coaching. Just imagine if a leading dating site would provide all of those things to their users; they’d raise the tide for their entire population and have a site that’s genuinely different from other sites because everybody there would ‘get it.’

Evan, you’re on the front line. You’re talking to online dating customers every day who are prepared to spend significantly more then $20 or $30 a month. You’re talking to the premium customers. What are you hearing from them that they’re dissatisfied about? What should the industry do to make them satisfied?
Dating sites actually can provide services to people that make them feel taken care of, instead of making their online daters feel like just another number. And, truthfully, you could charge whatever you want for such services. People will pay anything for results. This is their love life – the most important thing in the world, okay? You don’t need critical masses of people. If 1,000 people pay you $1,000 for premium services, you just made a million dollars.

I often entertain the idea of teaching a whole bunch of other people to do what I do. I’ve got training manuals, I’ve got employees, I’ve taught other people how to do this kind of stuff. But for an online dating site, it requires a little bit of investment and a bit of a push. But the more sites that offer tools to help their members succeed, the more people will succeed and feel brand loyalty to the companies that are providing those tools. Users just want to know that a site is committed to seeing them fall in love. And when they do, you can be sure they’ll tell their friends and then the site gets great word-of-mouth. There are millions of lonely people out there who are looking for relationships and assistance, who have no idea that there are services designed to help them fall in love. If you can convince them that online dating CAN work for them, it WILL work for them.

Do you advise many clients that are listing their profiles not only online dating sites but on social networks?
Very few. Ultimately you get what you pay for. Can you fall in love on MySpace? Yeah, of course you can, but in most places where you meet for free, people aren’t that serious. And that’s why I don’t think online dating is going to die as social networking sites become more popular. There’s always going to be a need, and a massive need, for online dating.

But the bloom is off the rose and people are pretty disillusioned with the process, the frustration, the people who don’t represent themselves properly. Online dating sites should empower people to represent themselves properly. This is what e-Cyrano does. We get them to talk to us and we put it together in such a way that it’s an accurate representation of the person, in their own words. We get them to talk to us, we take what they’re saying and we put it together in such a way that it’s really a great and accurate representation of the person, in their own words. So the whole thing has integrity. And just imagine, you have a whole site of people who are differentiated and interesting and have integrity. Doesn’t everybody look better? Doesn’t that seem like a site you would want to be a part of?

How do you want to work with online dating sites? How does the business relationship work?
We create a skin that looks like your dating site. Your color scheme, your brand and your logo. So it’s jdate.ecyrano.com or cupid.e-cyrano.com. Your company gets 20% of the take or a 20% discount off our retail prices. But since 20% of $129 is not going to make people rich, again, it’s really not about money, it’s about customer satisfaction. By actively integrating our services onto your website – putting links in the profile section, sending out blast emails, putting up banner ads – you’re helping people who would otherwise quit in a couple of months. Those people then stick around for as long as it takes to fall in love, whether that’s a year, or two years. That’s a lot of added revenue.  So it’s not so much about the revenue sharing as much as it is about the long-term customer satisfaction. 

Mark Brooks: If you’re interested in offering internet dating profile improvement services, email me and I’ll send you contacts for Evan at e-Cyrano.com, Merav and Dave at LookBetterOnline.com, Eric at ProfileHelper.com and Dr John Gray’s business development manager.  mark@onlinepersonalswatch.com

OPW Interview – Together Dating/The Right One co-CEO Paul Falzone

Posted on August 18, 2006

FalzoneOPW INTERVIEW — Aug 18, 2006 — Paul Falzone is co-CEO of Together Dating/The Right One, one of the countries top offline dating agencies. They also run e-love.com.

How were Together Dating and  The Right One started?
Together Dating started in 1974 by Chester Chase in upstate New York. As time went on the assets of that service were sold to another gentleman who grew the company. In 1989, I personally got involved in the industry and ran some of the offices. In 1997, it was a very large, built out organization with about 150 locations worldwide…with a less than sterling reputation. It was a huge mistake of the old franchise not to address PR and customer service issues. Anyway, as time went on, I broke away from the chain.  I had 14 locations in the Midwest and New England and I founded The Right One on September 4th, 1997,  and started to franchise the company. I invented the company from the ground up and put everything on the line. 

In November 1997, the CEO of the Together Dating organization, the old franchiser, threw the company into bankruptcy. He had so many complaints, and issues with his franchisees. The creditors eventually (January 1999) awarded the assets of the reorganization to my business partner, Brad Megahan, and his business partner. They got on the phone with me and said, “How would you like to merge with us? We need you.” Any good franchise needs an infrastructure and I didn’t have much of an infrastructure with 14 locations. Brad was a friend and mentor, as one of the most successful franchisees in the chain. He knew how to run a good operation, ethically. Brad and I are now 50/50 partners on Together Dating/The Right One and e-love.com, which is the most recent acquisition that we made. 

How many owners are there?
Two owners represent half of all our franchises and there’s a dozen franchisees total. Brad and I know it takes a certain type of person to run a business like this and franchising really isn’t the best way to go.  We kept the strongest people in our chain and pruned the rest to make it a stronger organization. We stopped selling franchises and started opening company stores or taking back under-performing franchises. That has proven to be a very smart move because of the strategies we have in place for the future. 

How large is The Right One and Together Dating now?
The Right One and Together will do about $45 million gross sales in 2006. We’re at 60 locations. We feel it’s very important and critical to grow slowly with the right management in place. We used to primarily market by direct mail but we’ve switched over, in the last 18 months, to Internet marketing. We have vendors who are doing online marketing for us. We generate leads at $5 to $25 each. Our average direct mail lead cost was around $250 after 9/11. People were afraid to open envelopes because of the anthrax scares.
 
Just our own corporate stores are generating 15,000 leads a month and we used to get maybe a tenth of that when we were doing direct mail. So we’ve really increased our lead flow. We’ve got three good sized telemarketing facilities in the country now.

How much are memberships?
I can’t dictate what my franchisees charge but everybody is basically in the same ballpark. Smaller towns in the Midwest may not charge as much, but the programs start at around $2,000 to $3,000 and go up to $6,000 to $7,000.

What is e-love?
We recently acquired a company called e-love, which was the old Perfect Match product, out of a bankruptcy. We acquired some great technology. We’re the dinosaurs in the (dating) business, remember. We’ve been around for over 20 years and technology…, no it’s not our strong suit, but I strongly feel that if some of these online dating experts sat with us, and we could take what was in our heads and give it to them, and they took what they were strong in and gave it to us, it would be very dangerous. 

I think they need to reach out and touch their clients more than just emailing them. We call potential clients, set an appointment and have them come into our office and spend about 90 minutes with them, going over all the details of what they want in a relationship. We’ll do a criminal background check, verify their identity and, if they’re divorced, check the divorce decree, and then once we feel that they’re going to be great for the membership, we plug them into the system. 

The difference with e-love is that the consumer can go home, log in, and type in all the preferences they’re looking for in a person. Up pops nine people per screen and they can click on each person and look at their picture, that we took. It’s not a 20 year old picture. It’s something we just took. They can also click on an icon and check out their video. About 80% of all our members are choosing to do add video.  hey can look at all the different aspects of the personality profile that they took with the company and see two bar graphs, one with each persons responses. They can see a visual of how the personalities match up. Users can hear a person, and see what things they have in common with that person. It’s very powerful. So that’s e-love.   

What are your plans for 2006 through 2007?
We’ll continue to run a profitable and successful service. We’ll focus on giving great high-touch service, and get even more efficient at converting our online leads into members. You said it well when you gave your keynote speech in February at the Internet Dating Convention, Mark. You said, the offline people have the quality, we have the high-touch service. The online dating companies have the quantity. If only there was a way that offline and online companies could find common ground and grow together.

Our services are all about making people happy. Giving people the relationships they deserve. We have had, over the last 32 years, a profound, a very profound effect on many, many singles across this country and internationally. This company has helped a lot of people over the years and that’s where I really enjoy doing my job. Getting an email from somebody saying, you know, I’ve been divorced for five years and I finally got the guts to join your service. Thank you. 

OPW Interview – Great Expectations co-CEO – Robert Fisher

Posted on August 13, 2006

RobertOPW INTERVIEW — Aug 11, 2006 — Great Expectations has been around 30 years and charges thousands of dollars a year for it’s offline, high-touch, high service offerings. I spoke with Robert Fisher, CEO of the Valentine Management Group, one of the owners of a group of Great Expectations locations. – Mark Brooks

How was Great Expectations started?
It was started about 30 years ago in California as a franchise operation and was acquired in ’95 by a group from the Advanta Corporation. When they acquired it they started buying up locations and after a couple of years they divested and it became license based instead of franchise based. Today we have multiple owners but most locations are owned by four main groups of owners who are also the licensing arm of the company.

How large is Great Expectations today?
There are over 50 locations nationwide. I would say there’s between 100,000 and 200,000 members nationwide. Each of the locations are individually owned and operated. From a revenue point of view, we’re somewhere between $50 million  to $75 million a year now. Memberships are ~$3,000 each.

What does Great Expectations do differently compared to internet dating companies and why does it work so well?
Online dating's economic appeal was that you would drive traffic to a site and capture customers by providing a no-touch service allowing you to keep expenses down. Unfortunately, customer acquisition costs have risen to a point that many in the industry are struggling to maintain profitability. Along with this, online is so commoditized that prices cannot be raised without significantly changing the offering. Many online executives have told me they tried raising prices and it cost them signups.

We offer the personal touch. Offline dating companies are all about service and touch. So, that’s the biggest difference. Most of the time, the clients are the same, with the exception of those in their early twenties. We don’t typically handle that demographic very well. We have some clients in their early twenties, but not a lot. But, the same people that internet dating companies are selling a $30 a month membership to, we’re selling them a $3,000 membership. The difference is the amount of service the client gets. Also, of the top three offline dating companies, I believe most of their locations offer identity verification and background checks.

By virtue of us having the higher price point, we’re able to deliver a different service. It’s very difficult from an online perspective to truly get to know the client. For example, at Great Expectations, in our locations, we talk to each of our clients once every 60 days. When a client is a brand new client, we make sure, before we put them fully into the system, that we hold their hand with their first few selections.  Everybody in the industry has some people who are more difficult to match than others and you can either say, okay I’m not going to worry about that person, or you can say, what can I do to help them?  Maybe I’m a bit naive, but I believe that everybody can get out on a date. I believe that if you’re not guiding some people, their fear will keep them from taking the initial actions that will help them be successful. I’ve heard only a small proportion of the people that use an online dating service ever go on a date. Well last month in my locations over 70% of the people went on a date – yes, we measure it. So that’s a big difference, in my opinion, between offline and online dating services.

How are your online marketing efforts working out?
Our online efforts work very, very well. We started marketing online in 1998 and we’ve become really strong with our affiliate marketing. 

We have an online dating site, GreatDatingSite.com, that does quite well for us. We offer it through Relationship Exchange and our conversion rates are above the standard at around 11 to 13%. I’m hearing other sites typically convert registered members to paid members at 8% to 10%. I don’t know what brings about that difference.

How has online dating helped your business?  How might it help in the future?
We really didn’t get into online dating until 3 years ago. We should have gotten into it much earlier, so that was a strategic mistake on our part. What we have done well is use web marketing to drive traffic to our online sites. I think online dating has helped our service a lot because 10 years ago there was still a stigma attached to dating services. Today there’s not, and I don’t think that offline can take credit for that. I think it’s truly online dating that’s caused the shift. The question becomes today, what is the ultimate dating service going to look like? My opinion is that we’re going to be merged down the road.  There is going to be a marriage between offline and online, and I think it will happen sooner rather than later.

Another place that online truly helped us is that it drove some of the competitors in the offline space closer together and as the result we have learned from one another. Today, I count Brad Megahan at Together and Paul Falzone at The Right One as real friends. We talk regularly and Paul's son calls me "Fisherman." That might not have happened had there not been a first IDate Conference. I actually think you will see the offline companies working together to improve their offering and their marketing over the next few years. All of us are working more with some onlines as well. And here is a hint to the others: "Call us, let's talk!"

What should the online personals industry learn from Great Expectations?
Whether it’s offline or online, the thing everybody needs to understand is that if you want to have sustainability in a business model, you’re going to have to deliver something the customer truly wants.  We can no longer get by, and in the offline world for years we actually did get by, with not delivering a good service.  We were terrible at service. I believe that today you have to deliver a very high quality of service. I think you have to talk to your customer on a regular basis and find out what you’re doing right, and what you’re doing wrong? How are your customers doing? What can you do to assist? We’ve looked at customers, whether online or offline, as revenue numbers too many times. I think that we’ve made a big switch in the last two years. As a result of us really getting strong in customer service over the last two years Great Expectations has seen a tremendous increase in the number of referrals. Our clients are happy. We touch our clients more often, we ask them how they’re doing, and we follow up with them. I think that’s where we’re making big inroads today.

One place onlines and offlines could serve each other is through joint lead acquisition strategies. We have some of these in place with online companies and they are quite profitable for both parties. Unfortunately, some online and offline companies still refuse to even get into a dialogue out of some sense of competition or fear of revealing some presumed trade secret. That is a pity.

What are your plans for 2006 through 2007?
We’ve been working on a marriage between offline and online that will go live fairly shortly. I truly believe that there is a mid-tier space that can be served that’s not currently being served right now. I think both sides, online and offline, are looking for a way to bring all this together. I’ve had enough conversation with enough people in the last 180 days to know that it will happen.

OPW Interview – Plentyoffish CEO, Markus Frind

Posted on June 30, 2006

Markus_frind_1OPW INTERVIEW — June 30, 2006 — I met Markus at iDate2005 and barely gave him the time of day; a hokey little site called Plentyoffish. I have a lot more respect for him these days. Plentyoffish is free and has snuck up on the Canadian market and has now established itself in the American market. It's #5 on the Hitwise USA rankings for May 2006, no less. (See OnlinePersonalsRankings.com for official international online personals site rankings courtesy of Hitwise, Comscore and Nielsen). Time for another chat with Markus… – Mark Brooks

Why is Plentyoffish a Web 2.0 site?
Because, like other Web 2.0 sites, Plentyoffish is driven by the community. There are one million people who have moderating powers in the Plentyoffish forum and there's several thousand people attending parties all over the country every week. And it's all organized and done by users. So unlike the paid sites, Plentyoffish is run by the users. 

I read that you had a check for $900K from Google for two months Ad Sense sales. What sort of pay-per-click (PPC) spend does it take to generate this?
I don't spend more then 10% of my monthly income on advertising. Pretty much the entire thing is viral.  I never did any pay-per-click at the start, not in the first two years and then after that it was just a growing. The community was really built by word of mouth. There was a need for a free site and because no one else was providing it, it just grew like a weed. A lot of people just don't want to pay for dating sites. I'm providing a service for millions of people and it's costing me barely anything. These other sites, they're all just out for people's money. 

Does Plentyoffish.com really represent a threat to the dating industry?  Are many of your members also members of paid dating sites?
Well I think it really depends on the market. On cities where there's a lot of wealth and a lot of money, I don't think Plentyoffish will have that deep of a market penetration but in other areas, for instance in Canada, Plentyoffish is by far the largest dating site.  And Lava Life if you look at all the rankings, it's lost about 50% of its traffic in the last year.

People are using three dating sites on average. So right now they're probably using Plentyoffish and two paid dating sites. We won't know until there are two or three other huge free dating sites if the paid dating industry is in trouble.

How many employees do you have? How many uniques a month do you get and how many servers does Plentyoffish.com run on? 
Just me, myself and I. Google says it's over 3.4 or 3.5 million uniques a month. I run Google analytics which records all my traffic.

I have five or six servers; one database server, one web server, an image server, a mail server…it's a dating site; it's not rocket science. You don't need thousands of servers.

I have highly optimized the database and the site, so I guess normally everyone else is using two to three hundred servers and I'm doing what they are doing with more complexity on top of it. I've invented stuff like multi-dimensional wheel sieve. I create very advanced algorithms. The more you search and the more you use the site, the more it limits your view of the people you see. So if you only message smokers, then it doesn't matter what pages you're on, you're only going to see smokers. It generates a database on the site that's built around your preferences, which is something that no other dating site is capable of doing yet. It's technically not feasible for them at least using known algorithms. I invented algorithms that no one else thought were feasible. 

What you say you want and what you actually want are two different things. It hardly ever corresponds on a dating site. So I just track a user and see what they're actually doing on the site and then show them matches based on their actual surfing preferences. My site is deceptively simple but no one knows just how complex it is under the surface.

Let's go on to the final question. What's your advice for other Web 2.0 start up web entrepreneur's about making money?
Build something useful, simple in ways that people will use. Explore things like Ad Sense, affiliate programs, and just explore ways of making money. Most 2.0 companies will never make a dime and they're not built to make a dime. So I would start looking at how to make money before you even design or think about starting a business. 

So what are your goals for 2006 through 2007?
I really don't plan more then three months ahead. Everything always changes constantly but I suppose it would be to incorporate social networking features and to stop Myspace and Facebook from taking over the dating industry. Myspace has 15 million unique log in's a day. The entire dating industry in this space has maybe a million to a million and a half.  And from the polls I've taken on my site, something like 30% of the people use Myspace…the same people who are using the paid dating sites.  User psychology is very weird. People on Myspace say they're not just there to date but actually that's what most of them are there looking for. 

OPW Interview – Wikipedia founder, Jimmy Wales

Posted on June 25, 2006

_wikipedialogo1_1OPW INTERVIEW — June 25, 2006 — Strange things happen when you empower people. Myspace allowed users to create freeform profiles…85 million users later, Fox has their arms wrapped around them. Linux asked for a little help with a new OS. Jimmy Wales pondered on the wealth of the worlds encyclopedias, and set the framework for a new, open encyclopedia. Here's the story of Wikipedia. It shouldn't have happened, but it did. How can you empower YOUR online personals site users more?  Have faith, step back, you might be surprised what happens. – Mark Brooks

What's  your personal story?
One of the interesting things, I guess, is when I was growing up, I had a fairly unusual education. My mother and grandmother had a small private school and there were four kids in my grade, 1st through 8th grade. In fact, what they did was they grouped us into two groups, so 1st through 4th grade, and 5th through 8th grade. There were about 16 kids in the classroom but at different levels. So that enabled us to work at whatever different levels we were interested in. We had a very open-ended time schedule and we were able to just study and learn whatever we wanted. I spent a lot of time pawing over the encyclopedia. Self-directed learning has always been a part of my upbringing.

I was in grad school studying financial economics and did PHD coursework, but I never did finish the PHD. I got an interesting job in Chicago as a trader. When I was in grad school I started looking at the Internet and looking at free licensing software. I was watching the growth of the free software movement. At first I was skeptical but then we saw that very high quality software was being created. All the software that really runs the Internet is Apache, Linux, PHP, it's all free licensed software that's written primarily by volunteers, programmers just working together collaboratively. So that was really the genesis of the idea for a free encyclopedia, to get a bunch of people together to collaborate on something useful. We've seen them do it in the software world and it works so, let's do the same thing with encyclopedias.

Was there one particular turning point for you?  When was Wikipedia started?
Wikipedia was started in January 2001. Before this, for two years, I had the previous project Newpedia. Newpedia was a completely different social model. It was very top down, very structured, very hierarchical – seven stage review process for articles, academic committees and so forth. And it was also a failure. It was a failure because it wasn't very fun for the volunteers. It was way too heavy in terms of controls and mechanisms and that's actually one of the things, as you said, Wikipedia was intuitive but it was born out of really a reaction against that.

In the Newpedia days we engaged in a lot of thinking about how to control things, how to make sure nothing bad got in. Wikipedia goes in totally the opposite way. So I said, "Let's just be as open as possible. Let's rely on accountability rather then gate keeping." By that I mean, every edit is visible, every edit is trackable to your account, people can see what you're doing, so there's that public oversight of the work that the community does. Wikipedia is really a reaction against the gatekeeper approach, which was to say, "we'll just make sure that only good people are involved and that people know what they're talking about before they get started." That was the gatekeeper model, which didn't work.

Did the information drastically improve on Wikipedia at a certain point, once you had a critical mass of contributors?
It's not about the number of people, it's about the quality of the individuals who are working on Wikipedia. We had more work done in two weeks on Wikipedia than we had done in two years on Newpedia. Even in the very early days, there was some pretty good articles, within a couple of weeks, where people got excited and edited together and kept adding information and rewriting and smoothing out, and then it just kept growing from there. I can't really point to any particular point and say, "Once we had this, then we were that." It grows and improves over time.

Is what you've created at Wikipedia magic, or is it reproducible?
I think the core principles are reproducible. You've got to think really hard about being in a social environment that's friendly and polite and helpful. Of course, with humans it's never perfect,there's always some fighting and things going on. There's always some sort of drama going on in the community.

Craigslist is a fine example. It's a community of friendly, helpful people who help each other out. And then, of course, I now have my company Wikia and people are building communities there using the same software (hosted) that Wikipedia is built on, but it isn't encyclopedias. It can be anything, political, fan sites, whatever, and those communities are also seeming to be very successful. I think it is reproducible.

I think that what we're going through right now is a period of learning about how to design software that let's people interact in friendly ways online. A lot of behaviors online, bad behaviors, come from incentives that are implicitly in the software that people don't necessarily notice. So a lot of my thinking about these kinds of issues is how do we keep the software in a state that encourages good work and gives a means of deflecting negative energy.

How do you make money?  Why did you go non-profit with Wikipedia?
So Wikipedia started sort of on the side as a hobby and it just became bigger and bigger and there was a real demand from the volunteers that it be a non-profit. The idea of a free, neutral, high quality encyclopedia as a reference standard, written by a community…it just seemed to make sense as a charitable project.

I now get a salary from my work at Wikia, so that's how I make money. And then the foundation gets money primarily from small donations. So the bulk of the money that we get is $50 to $100, or 50 to 100 Euro. It's basically thousands of small donations that pay the bills and keep us going.

You're building an incredible reference to a world of information. Are you friends with Google?
Yeah, I mean I talk to people at Google. Of course, there are tons of people at Google who are fans of Wikipedia. We don't have any kind of formal business relationship or anything like that with Google.

What does the future hold for Wikipedia? What partnerships are you looking for in 2006 through 2007?
We just announced that we hired an Executive Director for the foundation. We're trying to mature the organization. Our organization is very small and a little chaotic because we're swamped all the time with all the crazy stuff that's going on with Wikipedia growing so fast. The main kinds of partnerships we're pursuing are around helping people to reuse our content commercially or non-commercially, so that involves us taking a careful look at how it can be used that are consistent with our community values. You should take a look at http://personals.wikia.com. It's not very active but it's kind of interesting. There's a few people working on. It's very limited at the moment but they're basically thinking about how to do personals in a community way.  An open ended system. It's a neat experiment.

Mark Brooks: Wikipedia is modeled on the ancient campfire; the wise sharing information with the community around them. Jimmy knows open learning. He grew up in an open learning environment. It took that immersion in freeform thinking to drive the creation of the radical, rather counterintuitive Wikipedia. Web 2.0 will model (and improve on) many of the social dynamics that we experience in the real world. At the core of some of the best rising star web sites are two common themes. Trust and empowerment. (Wikia, Jotspot and Wetpaint are the top hosted wiki services available to the public).

OPW Interview – Peter Ward, Co-founder WAYN

Posted on June 16, 2006

Wayn_swns212OPW INTERVIEW — June 16, 2006 — WAYN.com is unique as a social network. They are successful and are making money with a paid VIP membership. Here’s my recent interview with WAYN.com Director/co-founder Peter Ward. – Mark Brooks   

How is WAYN different from other social networks?
WAYN has always been aimed at trying to differentiate itself from its competitors. We are based on locations, travel and people's whereabouts. Second, we are a premium social networking website service.  We offer a premium paid membership; 7 pounds 50 a month through 60 pounds a year for the VIP membership offering. Whether a user chooses to upgrade or not there is still a justifiable reason for using the service, which means we get the best of both worlds where we can trade a lot of traffic. 

How did you start WAYN?
WAYN was the vision of my colleague and good friend Jerome Touze, who came up with the initial idea when he was traveling on the Pacific Highway on the West Coast of the U.S. with some friends.  He just had a brain wave. Given that you meet so many fantastic people on your travels, wouldn't it be great to have a website where you can see where all your friends are at any given time. Jerome mulled over the idea and when he came back to the U.K., after we both had our year out to travel, he finally upped and told me about the initial idea. Of course, I'd just been vacationing around the world for one year, so I immediately related to that and suggested that we meet up over a beer to discuss it in more detail. We met up in Poland and in Marseille to brainstorm and brought it to one of my good friends, Mike Lines, who at the time, was the Systems Manager for Friends Reunited. We obviously needed somebody to build the website. We developed the proposition to a point where we could pitch it to Stephen Pankhurst, founder of Friends Reunited. He immediately fell in love with the idea and agreed to give us initial investment capital. We incorporated in September 2002 and went live in May, 2003. We then spent the next year and a half or so tweaking, testing, customizing, and improving the overall customer experience. 

WAYN has a paid membership level. What was the thinking behind this?
On the basis of advice received from Steve, we decided to implement a paying membership service offering. He felt that this was something that was crucial in order to ensure that we have a profitable and viable business model. We tailored the service around how we could differentiate ourselves from our competitors by setting up a premium service. It wasn't until March 2005 that we really hit the point of critical mass. In March 2005, we had 45,000 registered. Now we have almost 5 million members. We grew by over 400,000 last month alone.

How did the site grow so quickly?
First of all, the idea was to set up the service which allows you to keep track of your friends from around the world based on where you've been, where you are now and where you're going. We realized that the real value was to combine that with the ability to make new friends. Different people from different places. And, of course, if you plan a trip in the future wouldn't it be great to see who else is going to be in the same place as you. Say, if you're going to San Francisco in two months time, you could actually make some friends who are also from say London and hang out with them while you're there.

Does advertising work for growing social networks?
I think actually that it probably does if you have a good visibility over your customer acquisition costs.  There is also an argument that says it can work in terms of developing a brand. One of the most important things in business is to create a trusting and well recognized brand and advertising can help play a part in that. 

How is the membership program working out?
The membership program is working well for us. We are seeing membership numbers rise and we see a huge opportunity to increase that number over time by providing more payment mechanisms as well as more services which can be added on top of the existing membership platform.

Users can SMS each other through WAYN.  How is the SMS option working out?
SMS as you know has been very popular in Europe and is a very well understood method of interacting.   But interestingly, in the last few months we've seen an increase in the U.S. I think there's a lot of interesting talk about mobile content, a lot of investment, and a lot of hype. I think clearly the future is there. We're seeing a lot of the new handheld devices coming out, which are going to support access to the Internet. The key is to provide customers with a service that's useful and relevant. SMS has a lot more opportunity to grow before we even reach for web enabled or download-able outlets.

What's the future of social networking?
I think the social networking space is at a point of critical mass already. There are so many providers trying to take a piece of the action. Some of the traditional ways that social networks have grown to popularity are becoming diminished in value. Everyone has received an invitation from their friend inviting them to join one site or another. People are quite familiar with the services that are out there today and are trying to just understand what the best type of service for them is. The next wave of social networks will be very focused networks on target audiences, whether it'd be farmers or people who are interested in flying planes.

What are your plans for 2006 through 2007?
As you know in the Web 2.0 world things move at the speed of light and we're always trying to keep ahead of the game. One of the things that we're looking into is how we can set up a closed social network, which is secure, for the teenage market. The service will be only for those between the ages of 13 and 19, will be by invitation only and only existing contacts will be able to contact each other by default. So watch out for that one. Also, we're developing more advanced tagging for photos and we will provide our members with the ability to show streaming video, and to customize their profiles, with a focus on travel and lifestyle. We're doing a number of other things to strengthen our brand position in the travel and lifestyle sector and are looking to partner with some of the leading players in that space. We want to be the number one online membership community for those interested in travel and lifestyle. Social networking is a very exciting industry to be involved in and we couldn't have been in it at a better time. Good luck to all the people who are trying to be winners in this space.

OPW Interview – Nate Elliott, Jupiter Research

Posted on June 9, 2006

Nate_elliott_1OPW INTERVIEW — June 9, 2006 — You’ll often see Nate Elliott (and David Card) cited in the press. Nate works for Jupiter Research and is a leading analyst for the online personals industry (internet dating and social networking). Here’s my interview with Nate…  -  Mark Brooks

Who’s numbers does Jupiter Research use these days?  Do you use ComScore?
No, it’s generally all of our own numbers.  A lot of those numbers come from consumer surveys both in the U.S. and in Europe. In the U.S., we run more then a dozen consumer surveys every year and in Europe we run several per year as well covering the six major European markets. In addition, we have access to ComScore data that we sometimes use supplementally. But typically, we just use that data to double check what we get back from our surveys. In addition, based upon our survey data and executive interviews, as well as, publicly available information, we craft forecasts for the online dating industry in the U.S. and 17 European countries for the next five years.

How does the European online dating market look?
It’s doing very well. It’s still growing pretty strongly and we see it continuing to get stronger over the next several years. Similar to the U.S. market, the European market is starting to slow down. The good news is we don’t see the sudden slow down happening in Europe that happened in the U.S. In the U.S., we went from nearly 80% growth to less then 10% growth over the course of two years. In Europe, the transition will be much more gradual in large part due to the fact that we’re dealing with several markets instead of one single market and the fact that there are several markets across Europe that are maturing at different rates. That will help insulate the industry from the kind of sudden slowdown that the U.S. industry has seen.

What is the fastest growing market in Europe?
Well we look at Southern Europe as the fastest growing region within the online dating market. In particular the Italian market will more then triple between 2005 and 2009. It will be the fastest growing market in Europe over that period of time. The Portuguese market is also going to grow very quickly.  Overall, we see the online dating market in Europe more then doubling between 2005 and 2009.

Which services do you think will be most successful in the future?
The ones that are successful today in terms of revenue and users, and I respect that they’ll continue to be very successful, are Match.com and Meetic. They appear to be just about neck and neck in terms of revenues. Having spoken with them, I think they both have intelligent strategies to try and grow their business as this market starts to slow down a little bit. So certainly those two would be the most notable and they would be the ones that everyone has to keep their eye on.

Are there any notable and fast growing social networks in Europe?
There are a handful but I think it’s important to distinguish between social networks and online dating sites. We have more data out of the U.S. than we do in Europe because the social networking phenomenon is stronger in the U.S. then it is in Europe. But generally speaking, our surveys indicate that online consumers are not interested in using social networks to find a date. We’ve also found that online daters don’t leave dating sites for social networks. When we ask online consumers what functions of a social network are interesting to them and what functions they’re using, finding date’s scores very low?  Most people, in fact, like to communicate with their existing friends on social networking sites.  It’s more about people talking to the folks they already know, than going out and meeting new people. 

Where do you see mobile dating going in Europe and the USA?
Well, mobile dating is really interesting. I’m as interested as anyone else to see if any of the online dating sites can turn mobile dating into a serious stream of revenue. One of the slightly disturbing things we’ve seen from Meetic’s public statements is that their mobile dating revenues have actually declined as a percentage of their overall revenues over the past couple of years.  Now, in part, that’s because their overall revenues have grown very aggressively and their mobile dating revenues have been growing less quickly. I’m not sure the dating sites can count on it as a serious revenue driver over the next several years but I absolutely encourage the sites to look at the mobile platform and be well positioned in the future, if it does turn into a revenue stream. In the mean time, it certainly is an interesting way to drive people back to their website, which is where they make their money. 

How about video dating? Is there a future?
We don’t have a lot of data on people who are interested in video dating. The last time we asked that question in a survey was about two years ago and we saw very low interest at that point in time. It stands to reason that interest would have gone up just a little bit over the last couple of years but speaking from personal opinion, I can’t see video becoming a very important part of online dating over the next several years. If you remove a level of control from online daters about what their appearance is, I think a lot daters will be cautious about using webcams. For that reason alone, I think the uptake might not be significant for video dating, but again, we don’t have a lot of recent data on it.

What overarching trends are you seeing? What’s hot?
All the prices have gone up at the dating sites over the last year and a half. It’s more of an issue in the U.S. where user growth has slowed to a crawl.  To continue growing revenues they have to raise prices.  Yahoo Personals went from $20 to $25 to $40 depending on which service you take. These prices aren’t high but they’re higher then they used to be and I think in some cases they’ve become a bit too high.  As a result, you see fewer users who browse online personals. So, certainly raising prices is one way to generate more revenue from the consumers and it does increase the average revenue per user but if it comes at the expense of growing your main user base, then that’s a concern. I think there is an opportunity right now for some companies to come in and undercut the leaders. Dating sites that are sort of on the second or third tier, that are looking to challenge the leaders, may take advantage of the high prices that the leaders are currently charging, either by permanently undercutting the leaders or offering more creative pricing. 

One of the things that we’ve seen out of the U.K. that we like is the short term subscription. At Dating Direct you can subscribe for just a couple of days for a reduced price. It gives you a chance to communicate with someone; it gives you a chance to reach out to someone if you like a profile without making a large financial commitment.  But by registering for just a couple of days, for about the price of a drink or two in a bar, you’re potentially widening the number of people who would be willing to pay for your services.

What message would you like to leave the executives with?
The good news is, the industry is growing. Even at this stage where we’re seeing a few bombs in terms of use, it’s a big industry, it keeps on growing, and largely the services are doing things right. It’s just a question of defining strategies and growing the paid user base. I look forward to watching the leading data sites refine their strategies and seeing their continued growth as an industry.