General News

The Wall Street Journal in an article called "Marriage-Maker Claims Are Tied in Knots" attempts to find out if some of the statistics are true, in regards to the number of marriages a dating site claims to have generated. eHarmony is targeted because of their claim that 236 members get married everyday (see Story). I believe this works out to 2% of the total number of Americans who got married last year met through the site. Match.com is also mentioned due to stats they released recently (and then pulled) that says 12 couples got married or engaged everyday on their dating site (see Story).

The author, Carl, in a way defends the dating sites published stats when he says that:

One obstacle to further research is that newlyweds are hard for researchers to find. So online-dating companies looking to tout their success as matchmaking yentas have sought novel ways to enumerate marriages.

Less than 2 percent of Americans get married every year. To perform a survey and to get an accurate sample size 1.76 million phone calls would need to be made says Dr. Gonzaga of eHarmony. That would be a costly endeavor, so dating sites are forced to find creative ways to come up with some marriage numbers. The closest thing to an election-quality poll Carl could find was a Pew Internet & American Life Project survey, which in 2005 reported from a poll of 3,215 adults, that 3 million Americans found a long term relationship (not necessarily marriages) through a dating site.

The Online Personals Watch Blog has an interview with CEO of People Media, Josh Meyers. In the blog post we learn a bit more about the company which was recently bought by IAC, the owners of Match.com and Chemistry.

People Media employee between 40 and 50 people with about half in the editorial (profile reviews) and customer service departments. In 2008 the dating network had revenues of $11.6 million and currently have 255,000 paying subscribers. It is interesting to note that People Media's revenue and paid subscriber numbers is about even to Match.com European Operation which IAC sold in June (see Story ).

Related Story: More About People Media

To find out more about People Media's most popular dating site designed for black singles, read our BlackPeopleMeet review.

On August 6th, 2009 DC Thomson acquired Friends Reunited Dating from ITV for £25m. All 60 staff members will get to keep their jobs. There is further news that DC Thomson plans to merge their genealogy website, Find My Past, with Friends Reunited's social networking, dating and genealogy operations. This will make DC Thomson one of the largest sites in the UK for the online paid-for genealogy market, with about a 50 percent share. Their main competition is Ancestry.com.

DC Thomson also plan to launch and over 50 dating site which they hope will appeal to the users of their genealogy business.

For the full story, read Guarduan.co.uk and to find out more about the dating site, check out our review of Friends Reunited Dating.

IAC reported their Q2 financial results on July 29, 2009. The company saw revenue drop 4 percent to $340 million when compared to the same quarter last year. Looking at just the online personals side of things, IAC had a busy quarter. On June 5th, Match.com completed the sale of Match Europe to Meetic for $64.3 million (see Story) and on July 13th, acquired People Media for $80 million (see Story).

Revenue generated by Match.com declined by 5 percent this quarter to $88.3 million when compared to $93.3 million from quarter 2, 2008. Once again if you take the European Operations out of last year's revenue then, Match.com actually saw a 9 percent increase in revenue due to subscriber growth and in product execution.

There was no mention made of Chemistry in this quarters report. Since the People Media sale happened right at the end of quarter 2, we will have to wait to next quarter to see what additional revenue and subscribers will be generated by People Media's 27 dating sites.

Here is the complete IAC Q2 2009 Report. For more information on the dating sites owned by IAC, read our Match.com review and Chemistry review.

Related Story: Match.com First Quarter 2009 Financials.

eHarmony recently received a complaint in a letter from eRecruitment which stated that the dating site is infringing on their patents. eRecruitment is a job search site based in the United Kingdom that hold several patents which deal with classifying and indexing a website's members personal information. In the letter, eRecruitment told eHarmony to either shut down their dating site or start paying licensing fees.

eHarmony’s attorneys from Orrick, Herrington & Sutcliffe asked Judge Paul Friedman at the U.S. District Court for the District of Columbia to declare that the company had not infringed on patents owned by eRecruitment.

In my opinion this looks like someone who just wants to make a quick buck off of eHarmony. In the unlikely case that eRecruitment ends up successfully suing eHarmony, then all dating sites would be in trouble. Of course we have seen frivolous claims like this before. I forget who the company was but, there was one a few years ago that was attempting to sue any website who streamed video over the internet.

For more on the story, read The Blog of LegalTimes.

If you are planning to start, or just started an online dating site, then you may want to take a look at this blog post at White Label Dating. The post is actually commenting on another post at "Startup Professionals" which attempts to show all new dating site endeavours will fail.

I do agree with most of Startup Professionals reasons about why starting a online dating site is tough:

• Direct competition is huge.
• No longer a growth market.
• Entry cost is very high.
• Intellectual property is tough.
• Social networks and search engines.

The only real exception I have is the point they made about online dating not being a growth market. While growth may be slowing a bit, the Online Dating industry has a huge potential for further growth. The reason is, most single men and women are not online daters. In 2008 there was 93 million single Americans, only 3 million had paid that year to use a dating site (see Stats).

Including the point about "Entry cost is very high" may confuse people who have looked into buying software for a dating site. To buy and setup a readymade dating site script is relatively easy and can be done for under $300. There are hundreds of these type of dating sites out there but they all suffer from a couple of major problems. One problem is getting your website noticed, to do this these days costs money, lots of it. Dating terms in Google Adwords are not cheap and to generate enough traffic to hopefully get people to come back to your site will cost you alone at least $10,000 a month (conservative est.). Of course one month is not enough, you have to keep the marketing dollars flowing. The other problem these dating sites have is no members. People sign up to a dating site to connect with other members, if you don't have any, no one will sign up. This is the same problem as the chicken or egg scenario, which came first?

The White Label Dating post has a successful argument on how someone with a limited budget can bypass these points on why your dating site will fail. White Label Dating provides their clients the dating software, membership database, payment processing, customer support, hosting infrastructure, tax processing and more. All their clients need to do is provide a brand, website design and marketing. If you want to start a dating site but have limited funds, this is really the only option you have if you want a half decent chance at success.