Are dating Web sites past their prime?
How many marriages a day do Internet dating sites generate? Last year, the Wall Street Journal tried to cut through the hype and found that the claims put forth by major players such as eHarmony, Match.com and Plenty of Fish were dubious at best. And yet eHarmony's latest news release can't help but crow about a three-year-old Harris Interactive poll that said, "On average, 236 people are married in the United States every day as a result of being matched by eHarmony." Really? By the latest national marriage figures, that would mean it's driving nearly 4 percent a day. If that's true, might I suggest the site look into hooking up its customers with caterers and ministers? Because it stands to reason that it's losing a golden opportunity to grow the business.
And growth is what the paid online dating business is sorely lacking. There's no question that as the Internet matured, many singles flocked to paid dating sites and made them attractive things to own and build. But as Business Week pointed out, most subscription-based sites have been battling a downward trend for a while. And since last year, Match.com's traffic has been flat at best.
As Techcrunch notes, Match.com does most of its growing these days by buying competing Web sites, rather than reinventing the world's oldest dance. Match.com is also becoming Yahoo's official personals service, with the portal ditching its homegrown brand. In the same vein, eHarmony found itself last summer trying to explain how a 20 percent increase in registrations led to a 33 percent drop in traffic.
The numbers suggest that while singles in search of a match may post a profile, they're not finding who they're looking for. EHarmony and Match.com own 30 percent of the audience for all dating sites, and, taken together, their recent histories pose a troubling question for both their parent companies and those who prefer "scientific matching" techniques to real-life church socials: Has paid Internet dating peaked?
I mean peak the way people talk about peak oil. The problem is not that the world runs out of oil or dating partners overnight. The declining quantity of each ingredient threatens the existence of the systems: internal combustion engines and online dating partners. The moment the world can no longer ramp up oil production to meet demand is the moment the market for oil dips into chaos. Likewise, the moment a single guy in New York can no longer find X number of eligible women online after paying his $59.95 monthly fee to eHarmony is the moment he ventures out to the meat-market bars of the Upper East Side or sets up a profile on a free dating site. And that means a woman can no longer pay to find him, either. Repeat that pattern enough times, and paid dating sites collapse.
And really, when you consider the work that goes into building a dating profile -- and the fact that access depends on your continued monthly payments to Barry Diller's IAC -- it's also worth asking: Whither Facebook, and all the other free ways of meeting people online?
So what about Facebook? Fine. Even though the site is officially for social networking, come on. What dating site allows you to keep closer tabs on your intended? And while paid dating sites tread user-base water, Facebook just added a net of 10 million new users last month. Plus the whole thing is free -- and free of the challenge that comes with having to create a screen name and headline to, well, sell yourself.
Of course, there is a problem with viewing Facebook solely as a dating Web site: It occupies a far larger swath of its users' lives. But it excels by emulating the best parts of meeting someone new, especially when you share a friend: You get a few glimpses into their world. And if dating sites have managed to digitize the awkward process of a blind date, Facebook has digitized the thrill of an invite to your cool friend's house party where you just might meet someone new.
If Facebook is letting its users figure out their interaction, the counterpoint is what's happening with paid dating sites: convergence, as a Journal charticle illustrated. No one site is ever going to really break out of the pack. Niche sites like J-date, for Jewish singles, may continue to bust out, but those are not the stuff that online empires are built out of. Match.com has claimed to advertisers that it sees a full audience turnover every 6 1/2 months, according to the rate card published by competitor Plenty of Fish. (And if that's true, much of that turnover is being bought -- by acquiring start-up dating sites, suggesting that Match.com is buying traffic to compensate for its churn rate.)
That might work if the only other game in town were another paid site. But as all media have discovered, the true threat is "noneconomic" competition that steals market share and has no interest in selling out. Markus Frink created Plenty of Fish as a coding exercise in 2003. Primarily supported by advertising, Frink this year introduced a paid membership level for users who are "serious," but the site still has free access. But as in any good arms race, even Frink is now promising that his site can predict whom its users will end up marrying, so he is taking the fight to paid sites' intellectual turf.
As free alternatives become even more sophisticated, paid dating sites must contend with the fact that there's no way to force people to pay money to date.
That means, as with peak oil, that while the same big sites might scuffle over an ever-declining user base, the days of paid online dating as a growth business seem numbered. So why continue to invest in them? Internet users have simply become comfortable with the idea of having online profiles more attached to their "real world" identity.
So let the frantic scrambling for gasoline and girlfriends begin.
-- The Big Money
Paul Smalera has written for Condé Nast Portfolio, the New York Times and the New York Observer. He is a senior editor at Fortune.com.