eCommerce Times: Online Dating Faces Rejection

Online dating companies had it too good. After experiencing many years of rapid growth, many new players are flooding the market - some with massive resources and huge established audiences from other niches. This has led to cutbacks at the largest dating companies. Match.com had layoffs and switched CEOs, True.com laid off more than half its employees, MatchNet nixed its IPO and then its CEO resigned. In a sign of further doom, Jupiter put analyst Nate Elliott on the topic, who said the big U.S. growth in online dating is a thing of the past.

That said, one of the main reasons established players are having so much difficulty is the breadth and depth of the new competition coming online. Hitwise reports that online dating traffic went up 16 percent, but almost one hundred new dating sites popped up in the U.S. in the last year to help absorb that growth, and some of them are adding new dating applications that the established players haven't provided. Allowing new means of communication, like voice over IP or instant messaging; social networking applications or merely serving a special market niche, new players are coming, charging more and taking share.

Some of the new competition involves big companies with massive resources. Playboy, Time Warner and Monster.com are all in various stages of entering the market. Their ability to turn on the internet marketing spigots constitutes a bigger threat than the smaller start-ups that previously pushed their services only to the degree that they were able to fold back earnings into their marketing engines.