Finances

Unfortunately Spark Networks has continued their downward trend. Revenue for Q2, 2009 was $11.2 million, which is a 25 percent decrease when compared to $15 million from Q2, 2008. This is also a 7 percent decrease in revenue from Q1, 2009. Revenue dropped due to continued declines in subscriber numbers from JDate and the General Markets dating sites. Average paying subscribers for Spark Networks as a whole in quarter 2, 2009 is 163,217. This is a 3 percent decrease when compared to the last quarter and a 14 percent decrease when compared to the same quarter last year.

JDate saw revenue drop 18% to $7,1 million when compared to the same quarter in 2008. This is the result of subscribers falling 10 percent to 82,769. The Other Affinity Networks had revenues which totalled $3.3 million and 65,409 subscribers. Compared to the same quarter last year, revenue fell 3 percent while subscriber numbers increased 3 percent. General Market Networks saw the worse of it. Revenues dropped 68% to $701,000 and subscribers fell 58% to 14,022 when compared to quarter 2, 2008.

The planned decrease in revenue for General Market Networks is largely attributable to an 85% decrease in the marketing spend for this segment in the second quarter of 2009 compared to the same period in 2008.

For the full 2009 Q2 release visit Spark Networks News Room.

Related Story: Spark Networks First Quarter 2009 Financials

American Capital Ltd. announced on Thursday that it has completed the sale of People Media to IAC (Match.com's parent company). American Capital received $57 million in cash proceeds and will receive an additional $15 million in the third quarter, to complete the deal. This makes the total sale worth $72 million USD. This is $8 million less than was stated when IAC announced the agreement earlier this month (see Story).

For the full story, read NW32.com.

To woo in advertisers IAC released some updated statistics for Match.com. Here is what we know:

• Match.com had 20% growth in the first three months of 2009.
• 2.8 million Match.com users connect online and meet offline.
• Match.com members go out on 6 million dates each year.
• A subscriber spends on average 60 minutes per month on the dating site.
• On average a member views 30 pages per day.
• 132 million winks sent out every year.
• Over 56 million first emails sent out per year.
• On average 12 couples get married or engaged every day on Match.com.

In terms of demographics:

• The gender split is 52% female and 48% male.
• 48% of Match.com members are College Graduates.
• Ages 25 to 44 makes up 56% of their members.
• 44% of Match.com members make between $35k and $50k.

It's great to see Match.com starting to release some statistics but, a few things caught my eye. The first being about 12 couples getting married every day. eHarmony says on average 236 members get married every day (see Story). We will have to take a closer look at this point in a later post and see why there is such a difference. Another point that was interesting was about the 2.8 million Match.com members who connect. Is this the number of actual paid subscribers on Match.com in a year? Every quarter Match.com releases the number of subscribers they have, which lately has been from 1.3 to just over 1.4 million people. Of course this doesn't mean if you add up all the quarters you would get the total number of subscribers for the year as the same person could be a subscriber in quarter 1 and in quarter 2. The last point of interest was about Match.com members going out on 6 million dates a year. This could be taken a number of ways but let's assume they mean Match.com members dating each other. This would mean of the 2.8 million subscribers in a year, on average at Match.com you will go out on 2 dates.

Here is the IAC Advertising Solutions web page for Match.com. Since yesterday they have actually updated their PDF and removed some information. For the original PDF released by them that includes all the stats listed, read our local copy of Match.com Statistics for 2008 and 2009.

For more general information on this dating service, read our Match.com review.

Minyanville took a look at Spark Networks latest financials (see Story) and decided to do an article on it. Spark Networks as a whole is not doing very well but JDate has been holding its own in the recent downturn of the economy, even with the advertising budget lowered by $150 thousand. JDate is really the only viable online dating solution for someone who wants to date someone within their own Jewish faith. One thing they mentioned which might get JDate members attention is that apparently they may be considering lowering subscription fees which were last raised back in April 2007 (see Story) to bring in more members.

One thing the article talks about, which I disagree with, is that the subscription model for online dating is not viable any more due to free dating sites. While their example of a free site like Plenty Of Fish has seen increase visitors of 69 percent according to Compete.com (not 100% like the article suggests) most other free dating sites have been either losing visitors or just holding their own. With the recession over the 6 month mark, I think a lot of the popular paid dating sites are doing remarkable well by keeping roughly their current visitor levels, while sales in other industries plummet. Subscription based dating is not going anywhere, and these sites have their place in the dating industry, just like the free dating sites.

For the full article, read Minyanville (Note: I experienced problems viewing this page in IE 8). For more on the dating site, read our Jdate.com review.

We recently looked at the advertising market for this year and last (see Story) and in 2009 we are expected to see a decline in revenue earned when in previous years, online advertising was experiencing large double digit growth. I don't expect to see the free business model disappearing but it is going to get a lot tougher as companies spend their advertising dollars wiser. The funny thing with free dating sites is, they rely largely on paid dating sites for their income by displaying ads for them. If paid dating sites ever disappeared (which I do not see happening) then the free dating sites will as well.

Barry Diller, CEO of IAC (which owns Match.com and Chemistry), at a keynote address for the Advertising 2.0 conference said

I absolutely believe that the Internet is passing from its free phase into a paid system.

Diller is positive that relying on just advertising as a business model for most websites will not be sustainable in the near future. For his proof of success, Diller points to the iPhone and its popular App Store.

The problem with Barry Diller's iPhone example is, while the App Store has done extremely well, it never had any real competition. Once Google's Android mobile phone operating system matures and more companies bundle it with their phones similar to the iPhones functionality, it should be interesting to see if the iPhone continues to grab as much market share. The App Store is a very structured environment and Apple controls everything, this is both good and bad for developers. Android is open source software and free, this will spark more innovation but could create confusion for less tech savvy consumers.

For more on Diller's keynote address, read CNET News. Read our Match.com review and our Chemistry review for more information on these dating sites owned by IAC.

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.