THE PARADIGM SHIFT -- Jan 24 -- When I was at iDate 2 years ago most people laughed at me when I said I would create a major free dating site. This year at iDate dating sites were talking about how they could go free. It is strange to see a completely new internet bubble forming around what I’ve done. The biggest problems I see are... Monetization via adsense 3 years ago was 10 times higher then it is now. Free dating sites are way more hardware/resource intensive then paid sites and social networks. As a free site I still have to pay $5 a member, just like paid sites. I predict 2007 will be a year of carnage.
The full article was originally published at The Paradigm Shift, but is no longer available.
Mark Brooks: Two years ago I chatted with Markus at iDate, respected him for his SEO work, but didn't take him too seriously. I think Markus occupies a spot on the sales funnel just below social networks. He funnels members into paid dating sites. At the other end of the spectrum I'm seeing a significant trend towards paid dating sites trying to up the ante with regard to service levels and fees. There will be a stratification of services this year with new pricepoints and service levels emerging. Is a shake out looming? Do other free dating services have a chance? Markus is a picture of efficiency. Is he beckoning fresh entrepreneurs and existing services into a black hole because of this check which revealed (see June post) that Markus was doing ever so slightly better than most would have assumed. Your comments please...
There is a critically important fact that people may be overlooking here: the amount of $$ you will generate off each 1000 visitors from AdSense is about 5 times LESS than you will pay to obtain those same 1000 visitors via PPC. Thus, the only way to be viable as a free dating site is to be a top 5 for significant keywords on the search engines (free traffic). The two significant problems there: 1) Google, Yahoo etc have many whims and whereas you may be #1 today you could be on page 2 tomorrow; thre is no control and thus you're putting your bussiness's future into a big gamble. Problem #2 - the first 5 listings get 80% of the traffic. That means only 5 dating sites will really be able to succeed with this plan. Those are low odds. The odds are low and the risk is high. No major corporation could jusitfy such a business model, particularly if they are public.
Posted by: Neal | Jan 24, 2007 at 04:02 PM
PS - I know whereof I speak ... I've been struggling to figure out this whole free thing for several months now. I'm in the red every month, in the name of seeding the site. I've decided part free + part premium is the closest I care to go to free in a long term sense. You'll see me start to move in this direction in the coming months.
Posted by: Neal | Jan 24, 2007 at 04:37 PM
Sound advice from Neal -
Thanks for the post.
I'm currently contemplating my future premium services. While keeping the basic service free. Though I noticed a couple free dating sites are able to transcend Google's whimsy algorithms and stay pegged at number one. Nice work okcupid. Is is the 5 zillion blogs linking to the 'slut' test?
Cmon, tell us :)
Nice work!
Posted by: Matt | Jan 25, 2007 at 06:20 PM
Why is no one speaking about "micro-payments" or have I missed something? Is this just a phenomenon in Russia? I think it's the perfect mix; you join the site for free but make small payments via your mobile for additional services and benefits, like making your profile "VIP" or leaving a voice message for someone, or positioning your profile in more visible place. The list of possible “profile upgrades and services” is endless and these sites in Russia are making millions (loveplanet.ru, mamba.ru, 24open.ru, neznakomka.ru and more)!
Posted by: Jordan74 | Jan 27, 2007 at 07:58 PM