Saturday, May 1, 2010

The horse named Jim in the Online Dating Industry.

Some time ago I had written about how the entire Online Dating Industry for serious daters in 1st World Countries is a HOAX, performing as a Big Online Casino, with low successful rates.
Also I had written about the whitepaper CONSUMERS ARE HAVING SECOND THOUGHTS ABOUT ONLINE DATING; written by the company WeAttract (no longer exist) 5 years ago, but still valid.

The Online Dating Industry is selling elixirs, tonics, snake oil liniments and other patent medicine.
Patent Medicine Started the Pharmaceutical Industry in the USA:
Patent medicines were preparations that often contained various ingredients such as opium and alcohol and claimed to cure many if not all diseases. Early drug manufacturers made their own formulations and marketed them under a variety of names. Very early patent medicines were often called "Cures" because they claimed to cure many if not all diseases. Eventually the U.S. government stepped in and forced the wording change from "Cure" to "Remedy". This was to bring a level of honesty into the pharmaceutical industry. Most of the major drug companies today got their start with patent medicines. Pharmacists or Doctors would set up a small building with tablet machines or ointment mills and began manufacturing their drugs. This went on without any interference from any government agency. One could make any claim and engage in drug making without any credentials. Eventually, the federal government began to restrict the manufacture of these drugs. Slowly at first. With time the growing pharmaceutical companies were required to prove the safety of their drugs but not efficacy. But by the 1960's efficacy as well as safety were required to be shown for a drug to remain on the market.

Another example is the legal letter Match sent to the owners of PlentyOfFish (Kanciar & Frind)

The Online Dating Industry is performing like the Pharmaceutical and Cosmetic Industry before the USA Food and Drug Administration was created.
The 1902 Biologics Control Act was put in place after diphtheria antitoxin was collected from a horse named Jim who contracted tetanus, resulting in several deaths.
Jim's misfortune, and the ensuing tragedy and reaction thus set a precedent for regulation of
biologics and set the stage for the formation of the Food and Drug Administration (FDA).

What level of disaster will it take to lead to reform and new guidelines in the industry?

What will be the horse named Jim for the Online Dating Industry?
A serial killer murdering women?


At Q1 2008 [Match + Chemistry + NetClubEncuentro + Udate] 1,352,000 paid subscribers.

At Q1 2009 [Match + Chemistry + NetClubEncuentro + Udate] 1,438,000 paid subscribers.

IAC had sold its European operations to Meetic and acquired PeopleMedia communities.

At Q4 2009 [Match + Chemistry + NetClubEncuentro + Udate + PeopleMedia communities ] 1,377,000 paid subscribers.

The 27% stake in Meetic can be found on the "equity in losses of unconsolidated affiliates"

IAC acquired SinglesNet.

At Q1 2010 [Match + Chemistry + NetClubEncuentro + Udate + PeopleMedia communities + SinglesNet]. 1,585,000 paid subscribers.

The Latin America Partnership (50% stake in Parperfeito) is not yet accounting for in earnings.

The IAC had lost the war in Europe, had sold its operations to Meetic there.
Then acquired PeopleMedia communities and SinglesNet, but they were like balloons that deflate.

The last innovation was during 2005, when the IAC launched Chemistry.
If the IAC can not innovate any more; I think the best strategy for Match is try to destroy big free online dating sites, like PlentyOfFish and OKCupid.

It will be more profitable for Match to try to destroy PlentyOfFish than to try to acquire it.


1) Joining PlentyOfFish is like joining the army. You can not expect to find the most beautiful and intelligent women there for serious dating. Any man will see over 95% of women looks fat, ugly or not his type at PlentyOfFish. PlentyOfFish is mostly for casual daters, for fun, for flirting, for entertainment purposes, for instant gratification and not for serious daters looking for a long term relationship with commitment.

2) Mr. Markus Frind is the one & only person who exactly knows how PlentyOfFish is constructed/developed. There is no technical / operating manual, software documentation of its proprietary algorithms. PlentyOfFish performs as a behavioral recommendation engine based on past actions.

3) More than 30% of PlentyOfFish users, paid regularly to a paying online dating site. They want to use PlentyOfFish for free, paying with precious time, but they paid with money to other sites.

4) The 2010 annual revenue of PlentyOfFish is expected to be USD 30 million but more than 90% of the ads displayed at PlentyOfFish are from .. guess .. paying online dating sites like Match. If I use the Mozilla Firefox with Adblock Plus addon I do not see ANY ads at PlentyofFish. What will happen if all users decide to browse PlentyofFish with Mozilla Firefox with Adblock Plus addon? The CTR of the ads goes to 0%?

5) There is no need to sign any NDA to check PlentyOfFish's numbers. Mr. Markus Frind thinks PlentyOfFish is worth than USD 1,000 (one thousand) million, but if you (honestly) value a dotcom company with the 1.5Xrevenue rule, it is not more than (luckily) USD 45 million. With USD 10 million you can launch a free online dating site better than PlentyOfFish like OKCupid.

6) If Mr. Markus Frind sells PlentyOfFish to Match, he could move to another country/state, like California and launch ... a new freemium online dating site, better than PlentyOfFish.

7) Since January 2009, traffic to all paid online dating sites had been declining, 15 months with traffic declining and continues == "the Online Dating Fatigue Phenomenon"
Daters had understood that the entire Online Dating Industry for serious daters in 1st World Countries is a HOAX, performing as a Big Online Casino.
Daters got tired of being scammed with "automatic renewal" of their subscriptions and other "credit-card billing trickery".
Free sites like PlentyOfFish and OkCupid are steady, it seems not growing any more.
Match, Chemistry, True, eHarmony, PerfectMatch, Be2, Parship, Meetic and other paid sites need to wake up and innovate. Or die and leave room for new opportunities.

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