General News

CNN did a post about virtual currencies and economies. It is estimated that at least $1 billion USD were transferred into virtual currencies last year. The biggest use of virtual currencies are online games, followed by social networks and virtual worlds. Some websites even earn more revenue through virtual currencies than online advertising. The massive online multiplayer game, World of Warcraft (or WoW for short) uses WoW Gold. Even though it is against the rules set by Blizzard, this currency is bought and sold on the black market. This currency is so sought after, workers in China have been known to play the game just to earn the virtual WoW currency to sell to players in Europe and the US.

Social networking sites like Hi5 and MyYearBook have created their own currency as well. Hi5 has the Hi5 Coin and MyYearBook calls their currency Lunch Money. Hi5 Coins are mainly used to buy virtual gifts while with Lunch Money you can buy virtual gifts, play games and even donate it to charities. Facebook is looking into a unified currency since all the games and application on their platform that use a virtual currency has been created by the application developer. The problem with this for members is, the currency is only good with that one application. Facebook also doesn't see any revenue from these virtual currencies. This could be a way out for Facebooks revenue problems. If they create one unified Facebook currency for the entire site, not only could members spend it through any Facebook applicationg they want, Facebook would get a cut from each transaction.

The virtual world Second Life also has a currency called Linden Dollars. You can trade real currency for Linden Dollars which you can then buy whatever is for sale on Second Life (virtual real estate, entertainment, stores, etc..). Just like with real currencies, the Linden Dollar fluctuates daily against the USD. The buy and sell prices are set by the residents of Second Life on the LindeX Currency Exchange.

Some dating sites have a form of virtual currency called points. While you can't trade or buy something from other members, you can purchase virtual gifts, features and extended memberships from the dating site itself. Usually the way you earn points is by using and / or participating in the dating site. Two dating sites that I know of who use points this way is, Plenty Of Fish and, the FriendFinder Network of dating sites. With POF, every time you log into the site you earn 60 points, with a maximum of 60 points total every 24 hours These points can be used to buy virtual gifts for other members. With FriendFinder you receive points for participating in the site by adding or voting on articles, replying to questions and voting on topics. When you have earned enough points you can then purchase membership upgrades with them. This can include adding extra months to your membership and having your profile highlighted.

Check out CNN.com Technology for the full story. Read our FriendFinder review for more information on this dating service.

From the Spark Networks quarter 1, 2009 financial results, it shows the dating networks revenue has declined 20 percent to $12 million, with $300 thousand in net profit. In Q1, 2008 revenue was $15 million, with a net profit of $1.6 million. Quarter 4 in 2008 saw $13.2 in revenue. Adam Berger, Chief Executive Officer of Spark Networks, Inc. stated that revenue is down due to the turn in the economy and the lower than expected total average paying subscriber.

Background Checks and Identity Verification on members of dating sites have been getting a lot of attention in the media over the last year or so. This attention came to the forefront due mainly to New Jersey passing legislation called the Internet Dating Safety Act, which requires dating sites to notify visitors who live in New Jersey if they conduct criminal background checks or not on members.

Criminal Background Checks and Identity Verification both require the user to submit additional information so a search can be done. One of the many problems with most Criminal Background Checks is they don't verify the identity of the member they are dealing with. I am sure most criminals, especially when the dating site promotes the fact that they do criminal background checks, do not give out their real information. They will either give fake information or just find a name and address on the internet and pass that off for their own. Scanning criminal databases for a fake user will just return zero results, which to them means the member passed the check. The other problem with criminal background checks is (at least in the United States and Canada), there are hundreds of law enforcement databases out there and most are not communicating with each other. So, if the crime is not Federal then the chances it will be found remains small by most Background Check services.

Identity Verification relies on public record databases to do the job. Usually users are required to give their name, address and birthday. From there the verification service will search government databases for your information. When found, the service will ask you additional information on file to ensure the identity is yours. These additional questions are not always the same for every person. Questions can include, if you are married, your occupation and where you work, to the name of a relative. If this is all completed successfully then the user will have a verified status. The problem of Identity Verification services is websites like Intelius (US only) offer the same information to the general public from the same government databases for as low as a couple of bucks. A scammer could just perform one of these searches before he has to do an Identity Verification on a website.

The third type of related product is a Trust or Reputation service like the one from Iovation called ReputationManager. Here it is not necessarily the user who is trusted but the computer or electronic device they use. A unique ID is generated for each device (how this ID is generated is kept secret), and from their they can track if any previous fraudulent or suspicious activities have happen before on the computer. This can range from knowing if a previous transaction made from the computer was successful, too spamming activities like someone creating multiple accounts on a website within a certain time period.

All of these services have their problems and workaround but the best solution for a dating site would be using a combination of all these services to stop scammers. When you combine a Identity Check, with a Criminal Background Check, with a Reputation Service you can ensure maximum protection for your members. A website that offers a paid service or products can offer even further protection since they will have the additional knowledge of knowing if your bank or credit card information was verified by a financial institution.

Craigslist is fighting back from the bad press (see Story) they have received lately due to their Erotic Services classified ads category (which is now the Adult Services Category) and prostitution. They are suing Henry McMaster, the Attorney General of South Carolina for:

declaratory relief as well as a restraining order with respect to criminal charges he has threatened against the company and its executives.

The suit is in response to a threatening email they received from McMaster a couple of weeks ago telling them to either shut down Craigslist in the state of South Carolina or, face a criminal investigation and possible prosecution. Craigslist believes they are now in full compliance of the law because of the changes they recently made to the category (see Story).

For the full story, read Tech Crunch.

Match.com was the first online dating site to ever run a TV commercial back in 2004 (see Story). Now Match.com is the first to run pre-roll ads on YouTube (at least in the UK) against premium content. For online video there are 3 main types of advertising. Pre-roll runs before the video, in-roll runs during the video and post-roll, which is after the video. Ads will be sold on a CPM-basis by a sales staff and YouTube has stated that it will impose a limit of 30 seconds per ad. Both the video owner and YouTube will share in the revenue earned from displaying the advertising.

In 2008 the U.S. population was almost 304 million with roughly one third or 90 million people being single. YouTube has 80.7 unique monthly visitors and is the internet's 6th largest destination. The average user spends 54 minutes each month on the video site. This stats make it an ideal place for a dating site like Match.com to advertise since 62 percent of viewers fall in the key 34 to 55 plus age range demographic.

For more on the story, read Marketing Magazine from the UK and for more stats on YouTube, check out their sales pdf document. If you are interested in finding out more about Match.com UK, read our review of this dating site.

Online Personals Watch posted a short summary of an interview they had with the CEO of Meetic, Marc Simoncini. Among the things they discussed was the recent purchase of Match.com European operations (see Story). Currently Meetic in the UK runs the following dating sites; Meetic, DatingDirect and now Match. From the interview It looks like Meetic will be promoting only one brand per country or market. This means the Meetic dating site will be the only one of the three which is actively promoted in the United Kingdom. Will this affect DatingDirect and its membership numbers? Not really, since both sites look and function identically and they share the same member database. This means, if you sign up for one of the above mentioned dating sites, you really are then signing up for all of them as your profile will be available on all sites. On a related note, I am working on another article which I plan to further dissect how the large Dating Networks like Meetic work and if the end result is good for its members.

Here are a few more details from the eight year agreement that IAC (Match.com) and Meetic have:

1. Match has no right to manage the daily business in Europe. It will be managed by Meetic
2. There's a reciprocal right of first refusal for acquisition
3. And there will be two members on the board of Meetic, from IAC] Another interesting fact in the summary is Match Europe (not sure if this includes the UK) will have their member database merge with Meetic.

For the full interview of Marc Simoncini, check out Online Personals Watch