The Internet & Dating

Some Facts

  • The computer dating Industry was established in the early to mid 20th century.
  • The concept originated in the 1960's and 70's by a desire to meet and attract people for fun.
  • It originated as a questionnaire in a punch card computer fed format with a cost of $3.00 per punch card.
  • Current computer programs compile information and suggest potential matches among single people. Users then chooses to contact respective matches.
  • Online matchmaking services can cost from $20 - $60 dollars per month.
  • The process of dating online has overcome the "weird" factor and has become a normal, commonplace method of meeting new people.
  • Free websites have increased the market size and made online dating accessible to everyone.
  • It is now a global industry.
Group Presentation on The Dating Industry

Instructor Comments 4/28

* Need to know which are the bigger companies by revenue
* Get to profitability - free sites like plentyoffish.com would presumably be putting pressure on subscription prices
* Why would they be spending less on advertising? you would imagine that more competition meant that they would need to spend more to get customers
* Why are the online sites losing money?
* capital? Advertising
* Work out customer acquision cost
* make sure revenue data are consistent across slides
* The sign-up incentives (6 months free) are an important part of marketing strategy
* It would be interesting to get a sense of the advertising cost and see the effect it has on profitability
* Important to talk about cost structure and how it effects industry structure: high setup cost? How much does it really cost to set one of these things up?
How expensive is advertising really?
* If it's expensive to set up a dating site and to attract customers you would expect there to be only a few large players in the industry
* If it's inexpensive you would expect many players competing with each other and pushing prices down
* If there's intense competition you would also expect low profits in the industry
* A few large companies become profitable because of economies of scale and the network effect
* Many new companies stuggle to attract customers and make losses because they spend big on customer acquisition
* partnerships - doesn't this cost money? Why do people partner?
* Why do you think big companies will take over? Not sure why it will consolidate. People are struggling to profit, aren't they?
You could add overview info on the home page

Industry revenue data are spread over several pages. On one page you have an online dating industry size estimate of $650 million. Match.com's 2007 revenues were $348 million, so that means Match.com has over half the market. I suggest you cross-check the numbers by looking at subscription prices and membership. For example, according to its annual report Match.com had about 1.2 million subscribers. That means they must pay on average about $300 per year for membership, which is about $25 per month. As the first month price is about $20 and the next three months is about $30 that looks right.

Here's a review of match.com.

Group Presentation on The Dating Industry
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