Online dating is really a misnomer. As I've often said, people don't date at a dating site. Dating sites are really online introduction services. They peruse profiles and the dating site acts as an intermediary, passing along anonymous emails and IM's. Look at a photo, feel the butterflies, send an email, move the conversation over to Hotmail or Yahoo email and then possibly meet up. Rinse, repeat.
After a few months the online dating experience is getting tired. That's why the average subscription length is 3 months. The initial thrill in on the wane. Besides the emotional exhaustion, there is nothing to do at most dating site besides stare at profiles.
No wonder less than one half of all singles uses online dating sites in the US.
While visiting a dating site is strictly a utilitarian exercise, at a social networking site I can click a friend, click their friends, and an hour later I'm 76 degrees away from where I started, listening to a new rock band and perusing more scantily clad co-eds than a frat house party. Talk about pageviews! These services can group people together based on interests, location, age, sexual preference, music and so on. Or, the members can self-identify and seek out others via pronouncements on their profiles or using tags.
What if you had more options for interacting with people on a dating site? What if dating became more like social networking?
Last week I met with Vivox, a company with the vision to take online dating to the next level. Vivox develops tools and services to help daters communicate easier, safer, and on on their own terms. Vivox sees an opportunity to increase the volume and value of interactivity on dating sites. Stickier sites tend to retain members more, and for free sites, ad dollars increase. Instead of ceding control of the dating experience to the dating site operator, Vivox is positioned to put the power back into the hands of daters.
There are a whole slew of companies who have tried to enter the online dating space with anonymous phone numbers, background checks, click-to-call, double-blind email addresses and other safety and communication features. Most of these companies saw the spike in online dating revenue, rewrote their marketing plane to include the dating vertical, and sponsored a few parties at trade shows, only to fade off into the distance when they realized how stubborn and reluctant dating sites are to change, especially when it comes to technology.
What's interesting is that Vivox can do all of these things. The company is not a one-trick pony, which is partly why other companies have has such a difficult time partnering with dating sites. Why partner with 5 sites when you can get the same features and functionality from one, and them some?
Vivox in a nutshell is all about contextual communication and presence awareness. For the demo I saw, users download a chat client, which is used to communicate with others on the pal lists, regardless if they are logged into the originating dating site or not. The chat client has several features not found in most IM clients which aren't public at this time. The features I saw were centered around controlling and managing the pace and tempo of dating online.
As we move from POTS (plain old telephone service) to VOIP (voice over internet protocol), companies like Vivox are busy figuring out how to integrate our everyday communication with our online lives. Regular IM is not very flexible. Either we're talking or we're not. You see me as online or I'm not. Most IM clients can't route messages, they just save them for later. Vivox has the technical chops and back-end services to do all kinds of interesting things with your online communication, whether it be voice, IM or group chat. They also have 500,000 existing users.
During an average day, I'm IM'ing from my desktop or phone, or chatting from either. I'm taking inbound calls from some people, not others. I'm doing conference calls and interviews over Skype, I'm checking messages, leaving messages, reading chat transcripts and more. Then I go to check my dating sites, and I stare at static profiles.
Userplane has done a good job getting their chat client on several major dating and social networking sites. They have proven that singles like to chat online, in the context of the dating experience.
To understand the full impact of what Vivox can offer, you have to think of the chat client being the conduit to a full range of other services. Anyone who has actually logged more than 10 minutes in a dating chat knows that the same blather that goes on in Yahoo chat rooms goes on in dating site chat rooms.
Whereas Userplane doesn't control communication between two or more parties, Vivox provides a level of control that may make it much easier and comfortable for people to jump into chat rooms, identify like-minded people and create ad hoc communities of interest.
I was keenly aware that i was only grokking part of the whole picture during the demo. Each time I asked "but can it do so-and-so" I would get a knowing look and I would start to rant about a feature, only to hear "that's coming soon." Vivox clearly understands how people communicate, and their ideas about how we will communicate in the future remain intriguing.
Vivox will offer tiered communication levels (free vs. paid) and say they are keen to adapt to the needs of the dating industry (read, flexible to varied integration requirements).
Vivox has the vision to change the face of online dating. Vision is the easy part, the devil is in the details. Putting together deals with dating sites may prove to be more of an uphill battle than they expected. They can always choose to offer the services directly to consumers, but integration with at least a few major dating sites will be central to their success in the dating space.
[tags: instant+messaging, videoconferencing, vivox, voip]
1. Sam Moorcroft, ChristianCafe.com on December 20, 2005 1:20 PM writes...
Dave,
If social networking is where it's at, and dating sites "get tired", then why do the latter rake in 100's of millions of $$ overall, when social networking sites can't get anyone to pay?
Yes, turnover is high, and it is a volume game, but so what? Social networking sites can't get anyone to pay, so their turnover is irrelevant.
Vivox sounds nice, but all these "new" ways of interacting always do. None have been able to coax people to part with their hard-earned cash.
Yes, the online dating industry model isn't perfect, but it's not the highest legit business revenue earner for nothing. It works for a lot of singles, and I don't just mean people getting married. For around a buck a day (or way less, if you pay for longer) people get all sorts of value from subscription-based dating sites.
Now, if only these majors (besides Match, Yahoo personals, & eHarmony), as well as most niche sites, could figure out how to actually make profit, it would be even better;-) But, that has nothing to do with the model not working or people not wanting to pay.
Permalink to Comment2. David Evans on December 20, 2005 2:00 PM writes...
Sam, first a caveat. I owned Myspace stock when it was purchased, so take what I'm about to say with that in mind. Myspace (parent company Intermix) earned around $30 million last year. Social networking sites don't have to get anyone to pay directly, they get their revenue from advertising and partnership deals. As more social networking sites launch, each with a more refined revenue model, I think you'll see them pulling in much more than a few hundred million in aggregate. Myspace sold for $580 million, what some call far too little for a site that runs 10% of all online advertising. 9.4 billion pageviews in August - more than Google - and new users are signing up at something like 3.5 million a month. To top it off, their marketing costs have been up to now, zero.
Music + user-created content = rabid fan base.
Dating sites don't let people create enough custom content. A few tests and a paragraph about yourself aren't enough anymore.
My point with Vivox is that they are creating new ways for people to communicate, new models of social interaction, and to some extent, create their own content. That is what has the power to bring online dating to the next level. It's not the technology, in fact, I dislike the idea of yet another chat client, it's that people will have new ways to connect with each other.
The model of paying to browse static profiles is indeed in jepordy. I'm not saying it's going to happen tomorrow and it depends what segment of the market you are talking about. Casual daters will at some point begin refusing to pay, because the between Dating site A and Myspace aren't enough to justify the cost. Serious daters will always pay some amount, because price is a filter and many people believe you get what you pay for. To recap, casual daters leave in droves for free social networking services, serious daters continue to pay.
Permalink to Comment3. markus on December 20, 2005 2:18 PM writes...
Myspace sold for $580 million, what some call far too little for a site that runs 10% of all online advertising.
9.4 billion pageviews in August - more than Google.
Permalink to Comment******************
That is a totally meaningless number, pageviews are not created equal. The average user on myspace views 500 pages/month which means they aren't clicking on ads. On google 80% of people click on a Ad on myspace 1 in 15,000 people or so will click on a add. If you had to pay $5 for 1,000 pageviews would you spend it on myspace or google? I talked to the people who do a lot of myspace's advertising, they sell it for 2-8 cents a CPM because no one wants it.
4. Sam Moorcroft, ChristianCafe.com on December 20, 2005 4:16 PM writes...
Dave,
I stand corrected - somewhat. I would argue that Myspace is an anomaly and got the price it got because its new owners figure they can do a lot more than $30M. At a $580M purchase price, they have a ways to go - like 20x or so.
Just like eBay is going to take a major bath on Skype ($2.6B or whatever ridiculous amount they paid for it? C'mon!), I would argue the same is true for a lot of these purchases (speaking of which, $13.1M by Spark for Mingle Match, a collection of sites that lost money and had huge debt, relatively speaking?).
As my good friend Markus pointed out, Myspace's page views is a meaningless number. And, $30M in revenue is not exactly like Google's multiple billions. What are they spending to get that $30M?
The only ones who are gaining from these purchases, IMHO, are the founders, who walk away never having to worry about putting food on the table again (for 12 lifetimes, if they had the option;-)
Everyone else is losing, long-term (well, except those who owned their stock, pre-sale;-)
Now, if only I could start losing multiple millions to quintuple my revenue overnight, perhaps some big-wig will pay me $200M for ChristianCafe.com...
But, in the meantime, as that doesn't pay my mortgage (my bank is funny about me quoting my net-present-value worth; they insist on their money on time, every time), I'll get back to what I do best - running a profitable company.
Sam Moorcroft
Permalink to CommentP.S. I do concur with your last statement: "casual daters leave in droves for free social networking services, serious daters continue to pay". We are seeing higher quality payers (who pay more and for longer) and less serious ones not buying. As long as people continue to pay for our service (and provided we continually give them a reason to by adding new features, etc.) we'll keep offering it to them.
5. David Evans on December 20, 2005 5:55 PM writes...
Not sure how Skype fits in. That was a great buy for Ebay. Skype US GM Henry GomezNot is supersmart, they add 250k new users a day and have some amazing plans up their sleeves.
Even if it bombs, Ebay only looses 5% of it's market cap.
http://www.internetoutsider.com/2005/12/mossberg_does_s.html
More Skype details at http://gigaom.com/2005/08/17/skypes-number-game/
You are operating under the assumption that a click-through is what constitutes "success" where I see constant exposure as relevant to brand lift.
Nine billion pageviews meaningless? Statements like that lead me to believe you do not understand how to put value on sites that are not related to dating.
The average user on myspace views 500 pages/month which means they aren't clicking on ads." Why does it mean that? Clue me in.
I didn't compare Google to Myspace, I was talking about pageviews, not revenue. I think we have some apples vs. oranges thinking going on here.
Appreciate the comments anyways, fascinating to dig a bit deeper into the reality of these sites.
Just think, in three years people will bash Myspace like they bash Friendster now. Fickle consumers.
Permalink to Comment6. Sam Moorcroft, ChristianCafe.com on December 20, 2005 6:20 PM writes...
In 3 years, they'll bash Myspace if it turns out as Friendster has, to date...I would venture to say it has not been the success financially that its backers had hoped. And, that was my main point of my last post. These sites, whether dating related or otherwise (e.g. Skype) have yet to realise anywhere near their valuations.
Ebay has a business model that works! That is, they make PROFIT! So, of course their market cap is only going to get hit marginally if Skype fails. That still does not justify what they paid for it.
Give me another online business that makes PROFIT besides ones like Google or Yahoo or the few dating sites like Match or eHarmony (or little ol' us).
They are few and far between. People are so focussed on revenue and/or "brand lift". As I said, the only ones benefiting are the founders of the bought companies and those who got in early to success stories like Ebay.
Permalink to Comment7. markus on December 20, 2005 7:44 PM writes...
Nine billion pageviews meaningless? Statements like that lead me to believe you do not understand how to put value on sites that are not related to dating.
******************************
Plentyoffish really is just my hobby site. I'm one of the biggest affiliate marketers on the net and i make between 20 and 25 grand a day in profit off 40 sites and hundreds of PPC campaigns and other direct to merchant advertising. This is a topic i know well...
I find a rule of thumb is that a max of 10% of unique visitors will click on a ad in a given day. Myspace has 500 pageviews to a user, a site like corante may only have 5 pageviews to a user. Advertisers will only pay for responses, in this case clicks to their ads. The point is that 9.4 billion pageviews on myspace would translate into 94 million pageviews a month for a site like corante to make the same amount of money.
To put it another way, if myspace has 2 million unique visitors a day, 10% will click on ads doesn't matter if they have 200 million pageviews/day. If the site only has 20 million pageviews a day then you can expect a clickthru rate of about 8%. This is my experience from advertising on hundreds of sites, including myspace.
Comparing pageviews on site abc to pageviews on site zyx is comparing apples to oranges.
Permalink to Comment8. Sam Moorcroft, ChristianCafe.com on December 20, 2005 8:07 PM writes...
Markus,
You're such an easy mark, my friend (no pun intended on your name)...I just can't resist this:
"i make between 20 and 25 grand a day in profit off 40 sites and hundreds of PPC campaigns and other direct to merchant advertising. This is a topic i know well... "
So, let's see: $20-25 grand/day in profit translates to $7,300,000 - $9,125,000 per year. In profit.
A tad exaggerated, perhaps? (just a teensy-weensy super-deensy little bit?;-)
PUHLEASE! Give me a BREEEEAAAAK!!
Ok, all teasing aside, here's a deal for you: you use your "I'm one of the biggest affiliate marketers on the net" acclaim and put it to work by sending me some (no, make that tons of) traffic. I'll split the back-end with you, 50/50. Deal? Together, we'll make around $50,000,000. Profit.
Permalink to Comment9. markus on December 20, 2005 9:26 PM writes...
Come on your running a online dating site and you think that 20k/day for an affiliate doing 20-30 programs is a lot?
Are you actually serious?
Permalink to Comment10. Sam Moorcroft on December 20, 2005 10:34 PM writes...
Hey, you're the one claiming to make $7,300,000 - $9,125,000 per year.
In profit.
A one man operation.
Out of his 1 bedroom apt.
Driving his '74 Gremlin.
Ha!
I will say this: you do make me laugh, my friend - a lot:) And, laughter is good for the soul!
Permalink to Comment11. markus on December 21, 2005 12:41 PM writes...
I think you need to get out more, although 20k/day is high its no where near the top.
Friendfinder has over 10 affiliates doing 100k a month. The top ebay affiliate does 2 million a month. I know a few people who do 40-60k/day. Travel and finaince also has a lot of affiliates pushing 500k/month that is just off 1 program, most affiliates will have close to 20 programs.
Permalink to Comment12. Sam Moorcroft, ChristianCafe.com on December 21, 2005 1:30 PM writes...
PROFIT, Markus, P-R-O-F-I-T! Look up the word in the dictionary!
How often do you take the Gulfstream IV to Seattle or Omaha to play bridge with Bill and Warren?
Indulge me here: list the 40 sites you own.
site 1
site 2
site 3
...
site 40
I'm curious. Really.
Permalink to Comment13. GA Bass on January 2, 2006 12:12 AM writes...
"Dating sites don't let people create enough custom content. A few tests and a paragraph about yourself aren't enough anymore." David Evans
I found this sentence to be one of the more interesting comments, recently. Online dating should be viewed more of an extension of "brick and mortar" dating and not so much a magical instrument that offers willing partners without much effort. In any relationship, you have to work at it, and work in this case means providing the kind of greater detail that reveals greater articulation of personalality and character. More interactvity results in better exchanges between potential romantic partners and helps each partner fine tune his or her interpretation of the other person. Access to greater interactivity allows for a better conduit of the admirable skills of wit and intelligence. In the end, it offers greater meaning to the interchange.
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