Why Pay Match.com When Dating's Free Sites Beckon?

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The shift toward free online services matches a trend shaking up local classified ads. Wherever possible, consumers are flocking to free postings for cars, jobs, and real estate. "There are more and better free personals classified sites than ever before," says Peter Zollman, founding principal of consultancy AIM Group, which focuses on the classifieds business. "And people would rather get something free than pay for it.…It's a vicious spiral from the perspective of a paid site. Over the long term, more of the paid sites face irrelevance."

Paid Personals' Continuing Appeal

Some paid sites are getting hurt more than others. Traffic to Yahoo Personals fell 15% in December from a year earlier, according to Hitwise. In the same period, eHarmony's traffic dropped 61% and True.com's tumbled 68%. At the same time, traffic to Match.com jumped 31% while Singlesnet.com's traffic rose 16%. In November, Match reported its largest hike in subscriptions in seven years. The site may be benefiting from new features, such as the Daily5, which introduces five new matches to every member each day.

Another appeal of paid sites is that they may be able to provide greater security and selectivity for users. A person who harasses another user can be tracked down using credit-card information, for example. Charging a fee can also weed out less serious daters.

For their part, free sites will need to continue signing up advertisers to thrive. Since September, OkCupid has clinched deals with brand-name advertisers such as Colgate-Palmolive (CL). By contrast, fourth-quarter sales at much-larger Match.com slumped 3% to $88.1 million, though membership and profit rose. Even Match.com advertises on free sites in hopes of converting users.

Match.com Has Its Own Free Site

Some paid sites are even experimenting with the free personals market. On Jan. 15, Match.com launched its own free dating site, DownToEarth.com. The site functions a lot like Match.com but also lets people report whether profiles don't reflect reality. Launched in the U.S. in November, DownToEarth.com has jumped from 33,000 members at New Year's to 70,000 on Jan. 28, when it also launched in Canada.

For now, Match isn't worried about cannibalization from DownToEarth. "They [address] fairly different demographics," says Jacob Solotaroff, founder of DownToEarth.com. The free site lures people who are 18 to their early 20s, while Match's sweet spot are users older than 28, he says. "This is a good way for people who've never tried it before to try online dating for free," Solotaroff says. Today, Match is one of DownToEarth's biggest advertisers.

Converting free users to those who are willing to pay may be a hard sell. A user survey at PlentyofFish revealed that an average dater uses three different dating sites before settling on a favorite. Of the current PlentyofFish members, only 15% are also paying for a subscription dating service, while 62% had tried paid online dating in the past, Frind says. That's not the kind of math paid sites want to hear.

Kharif is a senior writer for BusinessWeek.com in Portland, Ore.