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Get Four
|  | OCTOBER 11, 2004
By Olga Kharif Online Dating Faces Rejection [Page 2 of 2] MOBILE ACTION. Moreover, because these sites attract people with common interests, the situation can be more conducive to a match. And much of the e-dating category's traffic increase over the past year came from social-networking sites, says Hitwise's Tancer. Younger users tend to gravitate to social-networking sites, rather than to traditional e-dating enterprises, which typically serve 25- to 35-year olds. But that demographic profile could change. Though youthful users are often the early adopters of new technologies, their older brothers and sisters often follow suit. Yet another competitive threat -- from mobile devices -- is brewing. Text-messaging dating services are proliferating in places like San Francisco. Cell-phone owners using DodgeBall.com are notified when their friends come within their 10-block radius. A service from AT&T Wireless (AWE ) helps users find the closest sushi restaurant. Soon, someone might be able to come into a bar and pull up profiles of people sitting in the same bar and looking for a date, says Corante Research's Boyd. When these services become available, dating sites will be effectively competing against such wireless industry's heavyweights as Verizon Wireless, Cingular, and Sprint PCS (PCS ). "AOL IS COMMITTED." Corporate giants are entering the arena, too. Time Warner's launched (TWX ) Love.com in February. It allows AOL Instant Messenger (IM) users -- 36 million strong -- to become available for online-dating chats whenever their IM is on. "It speeds up the dating process," says Mitch Praver, general manager of Love.com. Time Warner, with $6.2 billion in cash and equivalents, can potentially bring enormous marketing muscle into the game. Even without advertising, the service should number 1 million members by yearend, says Praver. "Clearly, AOL is committed," he says. "We're in an early inning here, and, so far, the results have been pretty positive." Another major entrant is career site Monster.com, part of Monster Worldwide (MNST ). In May, Monster acquired Tickle.com, which offers everything from IQ quizzing to career-personality tests. The acquisition's official goal was to enhance Monster.com's career services. A less publicized aspect: Tickle, a social-networking site, is in matchmaking. While Monster has yet to commit to online dating, it could potentially expand its presence in this industry. SPICING UP OFFERINGS. Playboy.com, a venture of Playboy Enterprises (PLA ), is also exploring the possibility of an online dating service. For now, the outfit is mum on its exact plans, but with its saucy magazines' millions of loyal fans, finding visitors for a dating service might not be that hard. To stay afloat, existing players will have to enhance what they're doing and dump a lot more dollars into new technologies and services -- and that could affect their margins. Match.com is enhancing its system for pairing up subscribers, to allow for more targeted searches. In the past few months, Yahoo! Personals has improved its mailbox features. It's also working to integrate its instant messenging and dating services. "Over the past couple of years, the whole focus of this category has been on scale," says Tina Flammer, senior director of marketing for Yahoo! Personals. "Now, it's coming back to focusing on improving the consumer experience." PLENTY OF POTENTIAL. Some of the e-dating sites won't be able to handle the financial pressure. NewsProNet.com's Zollman, for one, expects more consolidation. But these sites won't disappear. Match.com's Cohen figures that out of 25 million single Americans aged 25 to 60 who are online, only about 4 million pay to search for their mates online, so plenty of potential growth is out there, he maintains. Clearly, however, he and other established e-dating concerns now face more competition and technology challengers. The lovey-dovey phase appears to be over for online dating. It'll take lots of sweat and commitment to grow from here.
 Kharif is a reporter for BusinessWeek Online in Portland, Ore. Edited by Beth Belton
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