Spark Networks

The concept of purchasing virtual goods may not have been around for long, but it has now become one of the fast-growing types of business online. According to the Inside Virtual Goods report, the overall market for virtual goods in the US is on its way to hitting $2.9 billion in 2012 - that's up from $2.2 billion this year and $1.6 billion in 2010.

The virtual goods industry first exploded on Facebook with the popularity of games like FarmVille and CityVille, in which users purchase currency that can be used within the game. Facebook also added a virtual gifts feature that allowed users to buy and send gifts to one another.

Dating sites quickly picked up on the success of the virtual goods game. Plenty of Fish offers "Goldfish Credits" for purchase in packages of 100, 215, or 500. With Goldfish Credits, users can send gifts to other members or find out if someone has opened their messages. Gifts are publically posted on the recipient's profile for 3 three weeks before disappearing. Each Plenty of Fish member also receives 2 virtual roses when they join the site. Roses are sent when composing a message, but each rose may only be used once during a 30 day period. Because they are a rare commodity on the site, roses are considered an especially strong indicator of a user's interest.

HOT or NOT was also an early adopter of virtual goods. The site offered virtual roses ranging from $2 to $10 that could be sent to prospective dates. Though more expensive, the $10 roses became the most popular option because they sent the strongest signals to the recipient. HOT or NOT also found that the recipients of virtual gifts were four times more likely to respond to the sender than users who did not receive a gift.

To date, Zoosk is one of the biggest virtual goods success stories. Zoosk Coins are a virtual currency used to purchase a range of features on the site. According to the site's FAQ, Coins can be used to "purchase Gifts, arrange for a Special Delivery, receive a Delivery Confirmation for your email messages, and Boost your profile." Gifts are cute graphics, like flowers and pets, that can be sent to other members. Special Delivery alerts a message recipient with a pop-up when they have received a message from a user who has purchased the feature. Delivery Confirmation notifies the buyer when their messages have been read, and Boost is a feature that puts the purchaser at the top of someone's search results or in a special place on the homepage of other interested users.

Virtual goods seem poised to become more popular than ever on dating and social networking sites. It looks like your holiday shopping list just got a little bit longer.

For more on this story you can read TechCrunch. For information on the dating sites mentioned in this article you can read our POF.com review and our Zoosk.com review.

Earlier this month Zoosk released a iPad version of their dating application which quickly ranked in the top 20 list for Social Networking Apps in the United States. Like their dating apps for other platforms, this app is available in 25 languages and offers the user the ability to search, browse and communicate with other Zoosk members. It is also optimized for the iPad and takes into the account the larger screen real-estate available.

Zoosk also noted that their mobile apps have been downloaded over 2.5 million to date. Search algorithm changes over the last year have also increased communication on the dating service by increasing message replies 133 percent.

For further details about the service please check out our review of Zoosk.com.

Spark Networks reported their 3rd quarter financial results this month. On a year over year basis revenue grew 28 percent to $12.7 million this quarter. A net loss was recorded however at $238 thousand and was contributed to an increase in marketing expenses. Subscribers overall increased 30 percent to 206,099 when compared to the same quarter last year and increased 8 percent when compared to the prior quarter.

When looking at the different dating segments Spark Networks has, the Jewish Networks revenue was flat when compared to the last quarter at $6.7 million. Subscribers decreased by 1 percent to 88,976 when compared both to last quarter and the same quarter last year.

The Other Affinity Networks saw a huge increase of subscribers this quarter of 84 percent to 113,972. With the increase of subscribers it also increased revenue by 108 percent to $5.7 million when compared to quarter 3 of 2010.

General Market Networks continue to slide. Revenue was $264 thousand which is a decrease of 52 percent when compared to 2010. Subscribers fell about the same percentage (54) with only 2,702 recorded.

For the full 2011 Q3 release visit the Spark Networks News Room.

Related Story: Spark Networks Second Quarter 2011 Financials

The Jewish New Year just happened and I noticed that JDate has more to celebrate than Rosh Hashanah. They just released the results from a survey by ResearchNow (an independent research company) which shows that JDate is responsible for 52 percent of all Jewish marriages that started online. From the survey of 948 married Jewish internet users they also concluded that 63 percent of the online dates originated at JDate, this is many times more than the leading competing dating services. The survey also showed that 76 percent of Jewish internet users who used an online dating site to find love, became a member of JDate.

For more information and statistics you can read this post from the JDate blog. To find out if this dating service is something you would be interested in you can also check out our review of JDate.

Spark Networks has reported their second quarter financial results for the year 2011. Revenue is up by 17 percent to $12 million when compared to quarter 2 of 2010 and up 9 percent when compared to the last quarter. This is the largest quarter over quarter growth in 6 years and the third consecutive quarter growth in a row.

Jewish Networks was responsible for $6.73 million of revenue. This is an increase of 1 percent when compared to the same quarter last year. The Other Affinity Networks saw revenue reach $4.7 million. This is an increase of 68 percent when compared to Q2 2010. General Market Networks revenue continued to fall with revenues of only $153,000. This is a decrease of 48 percent. Revenue from Offline & Other Businesses was $449,000.

Average paying subscribers for the Jewish Networks rose 1 percent to 90,094 during quarter 2. Other Affinity Networks surpassed Jewish Networks for the first time ever and reached 96,071 average paying subscribers. This is an increase of 50 percent. General Market Networks subscribers fell again to 3,485. They saw a 46 percent decrease when compared to the same quarter last year.

I have been seeing a lot of Christian Mingle TV commercials lately so I am sure this marketing endeavor is partially responsible for the large increase of subscribers that the Other Affinity Networks is seeing.

For the full 2011 Q2 release visit Spark Networks News Room.

Related Story: Spark Networks First Quarter 2011 Financials

For the first quarter ending March 31, 2011 Spark Networks reported revenue of $11 million. This is an 8 percent increase in revenue over last quarter (the largest growth between quarters in the last 5 years) and a 4 percent increase when compared to the same quarter in 2010. Spark Networks reported a net loss of $0.2 million in the first quarter due to $1.8 million being spent on direct advertising. In the same quarter last year a net income of $0.9 million was recorded.

Revenue for JDate this quarter was $6.9 million which was the same last quarter. JDate did have a 2 percent increase in subscribers at 91,545.

Revenue for the Other Affinity networks (ChristianMingle, BlackSingles, etc.) was $3.8 million. This is a 35 percent increase over the last quarter. Average paying subscribers was at 81,889 which is a 26 percent increase when compared to Q4, 2010.

Revenue for General Market Networks was down 20 percent to $190,000 when compared to the last quarter. Subscribers also fell similarly (19 percent) to 4,207.

For the full 2011 Q1 release visit Spark Networks News Room.

Related Story: Spark Networks Fourth Quarter 2010 Financials