Posted: May 24th, 2015

This document is authorized for use only by KYLE MATTICE in MGT 509 Spring 2015-1 taught by Keith Yurgosky, University of Scranton from March 2015 to August 2015.

This document is authorized for use only by KYLE MATTICE in MGT 509 Spring 2015-1 taught by Keith Yurgosky, University of Scranton from March 2015 to August 2015.

For the exclusive use of K. MATTICE, 2015.
709-424

eHarmony

choosing, the more intelligence and ambition the men had, the better.…Women also exhibit a
preference for men who grew up in affluent neighborhoods.…Women also put greater weight on the
intelligence and the race of the partner, while men responded more to physical attractiveness.”37
Online interaction was designed to lead to offline meetings. However, researchers found that
online daters typically “ended up going out with fewer than 1% of the people whose profiles they
studied, and….those dates often ended up being huge letdowns.”38 Acknowledging the difficulties of
dating in general, researchers found that “most participants were so dissatisfied with both online and
offline dating that they would have preferred to stay home and watch a movie.”39

Free Do-It-Yourself sites had been rapidly growing in membership base. The growth defied
the common industry wisdom which claimed that requiring people to pay to join a dating site served
as an important barrier separating lurkers and casual daters from serious ones. Being free, these sites
could attract members quickly, leaving it to the members to interact with the vast number of others to
identify their own match. In addition to SinglesNet, the fastest growing among these was Plenty of
Fish, founded by a 29-year old entrepreneur in Canada, Marcus Frind. Despite a terrible user
interface, Plenty of Fish had become the most frequently visited dating site in the U.K. and Canada
and had reached No. 4 in the U.S. by the end of 2007. Although Plenty of Fish only had half as many
visitors as eHarmony, the website received 20% more visits than eHarmony did. Such user
engagement on the site resulted in 900 million page views per month, allowing this one-person
company to become one of Google’s AdSense top earners, with revenues close to $500,000 per month.
A significant portion of this revenue came from referring people who were dissatisfied with the
quality of matches on Plenty of Fish to more selective paid sites, such as Match or eHarmony. Not all
free personals sites were equally successful, however. OKCupid, started by the founders of eDonkey
(a free file-sharing service), was only beginning to catch up, despite having a more appealing
interface and much better functionality. Some sites, such as Craigslist, did not even care about
making profit, even though they possessed a significant market share of personals, particularly those
targeted at casual hookups. Few doubted that the existence of these sites put a cap on how much the
paid sites could charge for their services (see Exhibit 11).
Niche sites were also in competition with eHarmony. Waldorf referred to the niche sites as
“community of interest sites,” which he said were “characterized by low customer acquisition costs.
For the generalists, it is basically a customer acquisition story.” The gay and lesbian market was the
largest niche market, attracting about a tenth of the internet traffic of the heterosexual personals
sites.40 . Some sites catered exclusively to this market, while others added it on top of heterosexual
matching. Sites targeted at African Americans, such as BlackPeopleMeet or Black Singles, were a
close second, followed by faith-based personals site, which included sites such as JDate.com,
ChristianSingles.com, Hindu-Dating.com, Muslima.com, and LDSsingles.com. Of these, JDate,
targeted at a Jewish audience, was considered the most successful, with almost 10% of Jewish singles
enrolled on the site. Other sites covered just about every conceivable demographic—some targeted at
graduates of elite colleges, such as TheSquare, others focused on people with health conditions, such
as HIV, Crohn’s disease, cancer, or diabetes. Internet users could also sign up on RichorBeautiful,
HotEnough, or HotorNot, as well as SingleParentLoveLife, SweetOnGeeks, FarmersOnly,
SugarDaddyForMe, VeggieFishing, and GothScene, not to mention MarriedButPlaying. Overall there
were at least 850 different personals sites on the Internet. About the same number entered the
industry every year, with most failing quickly without making a penny of profit.41
Online social networks provided an important substitution threat to the online personals
industry. Large online social networks, such as MySpace or Facebook, did not have to incur the vast
advertising expenses required to attract customers, instead relying on a “viral” process through
which friends encouraged their friends to join. Such networks also held a significant advantage over