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Online Dating & Web 3.0 (Part 3)

Posted on Wednesday, Aug 8th 2007

Business Model
Most of the online dating sites earn money mainly from subscription, ad revenue and products and services sold through its sites.

The subscription rates for the dating sites vary from $29.99 per month for to $39.95 per month for Yahoo! Personals to $49.99 for to $59.95 per month for eHarmony claims to have some incredible insights into psychological profiles of its members, and advertises “chemistry” match through its rather clever television ads. generated revenues of $311 million in 2006 with a growth of 25% over 2005. eHarmony is expected to earn $200 million in revenues in 2007. Though revenues of these sites have been growing they are still not making profits due to rising marketing costs.

Online advertisement spending by the dating sites was $127.3 million for the period January to November 2007. eHarmony topped the charts with spending $110 million in January – November 2006, followed by True ($52.2 million), Mate1 ($20.4 million) and InterActiveCorp ($16.1 million). IAC owns, of course.

According to Marketdata very few dating sites are profitable and the cost of entry to build a “critical mass” and database of profiles is estimated at $10 million.

The online dating sites could consider premium services like profile makeover or personality development in partnership with fashion and beauty consultants and personality specialists for giving users a new persona. These sites could also consider personalized counseling services.

(To be Continued)

[Part 1] [Part 2]

This segment is part 3 in the series : Online Dating & Web 3.0
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