Why Match.com Shouldn't Have Purchased Dating Site OkCupid
On April 7, 2010, OkTrends, the popular OkCupid blog that summarizes dating research, ran a story entitled "Why You Should Never Pay For Online Dating." Curiously, that post appears to have been removed from the site. (Celebrating the idea, several other websites still link to where the post once lived; visitors are automatically redirected to the OkTrends landing page.) Could that be because Match.com, a long-time player in the dating game, just purchased OkCupid for $50 million in cash?
"Today I'd like to show why the practice of paying for dates on sites like Match.com and eHarmony is fundamentally broken, and broken in ways that most people don't realize," OkCupid co-founder Christian Rudder opened the "Never Pay" story. (A cached version appears here.) "For one thing, their business model exacerbates a problem found on every dating site. For another thing, as I'll explain, pay sites have a unique incentive to profit from their customers' disappointment."
OkCupid launched in 2004 as an alternative to subscription-based sites like Match.com and, to this day, brings in almost all of its money from traditional advertising methods. The formula has worked: OkCupid was named one of Time magazine's top 10 dating sites in 2007 and now has more than 3.5 million active members. For comparison, the sixteen-year-old Match.com has 1.3 million paying subscribers, a number that Rudder tore apart in his April 7 blog post.
"Match.com's numbers are just as grim [as eHarmony's]," he wrote. "They're a public company, so we can get their exact subscriber info from the shareholder report they file each quarter. Here's what we have from Q4 2009:"
Rudder goes on to show why it is exactly that so many profiles on these "pay for dates" sites are "dead," or inactive: Match.com's business model means that the company makes more money by signing up new subscribers than it does by keeping existing subscribers happy. And that business model hasn't changed since Rudder wrote the post.
"We know that many people who start out on advertising-based sites ultimately develop an appetite for the broader feature set and more committed community, which subscription sites like Match.com and Chemistry.com offer, creating a true complimentary relationship between our various business models," wrote Greg Blatt, CEO of IAC, Match.com's parent company, in a press release announcing the new acquisition. "2010 saw record growth both for Match and OkCupid, and we believe coordinating the adjacent business models will help fuel continued growth for both."
Blatt's goal, clearly, is to funnel OkCupid users into the Match.com subscription-based system. But I don't suspect it will work. And that's because OkCupid already offers a broad set of features and a committed community, something Blatt seems to believe can only exist in a subscription setting. In addition to the OkTrends blog, visitors to the OkCupid site are given their own personal blogs, the ability to instant message, photo albums, and access to quizzes and games. Should Blatt force OkCupid's Sam Yagan, who will continue to run the site from his offices in New York, to remove any of those features, users will flock elsewhere.
"OkCupid has been a real innovator in our space, and the dating environment they've created has struck a chord with a younger demographic," conceded Blatt. "I think it's clearly the best site in its competitive set, with better features and a more distinctive personality than any other advertising-based site." That sounds about right.
H/T Walter Frick.