Online Personals Watch

Adult Dating Market Players

E-COMMERCE -- July 8 --  Last year adult dating sites' growth rate was about 70%. AdultFriendFinder.com is the most popular adult-oriented dating site drawing millions of unique visitors per month. Besides AFF, there are many other sex-oriented dating sites including Fling.com, SexSearch and IWantU.com. Similar to the traditional dating sites, users lie about their personal information – age, marital status and appearance, so what you see may not be what you get. Sometimes men pretend to be women and women pretend to be men. Specialists suggest that up to 30% of all dating profiles are misleading. FULL ARTICLE @ E-COMMERCE

Mark Brooks: People tell white lies.  iDaters should ask 'is your photo up to date' and 'is your profile and marriage status info accurate.'  Sometimes profiles can be online a looong time. Users will join and cycle in and out of relationships (and their idating memberships) and neglect to update their profiles. ProfileHelper.com, LookBetterOnline.com and e-cyrano.com help users put their best profile forward.  IWantU is dead and dying at this stage. See Compete graph of IWantU. (Full Disclosure: Fling is a client. The Founder of ProfileHelper.com is on the Courtland Brooks team.)

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Seeking A PC Affair?

MIAMI HERALD -- May 2 -- In March, Ashley Madison claimed annual revenue in the tens of millions of dollars and 3.3m users worldwide. South Florida was its sixth-largest market (177k users), behind New York and Los Angeles. The Gender breakdown is 70-30 men-women; 60-40 in South Florida. Americans spent $957m on dating sites in 2008; in 2013, Forrester projects $1.5 billion. February data from Compete show that Adultfriendfinder and Fling logged 37.9m unique visitors, more than the next 12 dating sites combined. Sites like these and Ashley Madison have one big advantage over the competition: ''Their target audience is going to be on the site forever,'' says Mark Brooks, an Internet dating industry consultant. "The typical dating services are victims of their own success. After three months, people bail -- they sign off because they've met someone, or they skip over to another dating site. The people at Ashley Madison have already demonstrated they're not going to be committing any time soon, and they keep on cycling back around. It's a wonderful cash machine.'' ''Sneaky or deceptive is not my cup of tea,'' said Paul Falzone, founder of TheRightOne, and a professional matchmaker for 30 years. "These guys are totally the opposite of what we're about . . . Do you want to spend your life with someone you're compatible with, that you enjoy, or do you want to live a lie?'' FULL ARTICLE @ MIAMI HERALD

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FriendFinder's Latest Scandal

VALLEYWAG -- Feb 26 -- A porn star draping boobs over an employee's head. Lapdances on the company dime. $50m in back taxes. These are just some of the charges Penthouse publisher FriendFinder Networks is facing from an ex-employee Natalie Cedeno. FriendFinder filed to go public last year. It desperately needs the $460m it hopes to raise in an IPO in order to pay down $420m in debt. If the company has legal problems and labor issues beyond what it disclosed in its SEC filings, its executives could face heavy penalties, and the IPO would likely be scotched. According to Cedeno, Various operated Adult FriendFinder for seven years without drawing a single sexual-harassment lawsuit from employees. FULL ARTICLE @ VALEYWAG

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Going Bust, Again

NY TIMES -- Jan 7 -- Friendfinder Networks (formerly Penthouse Media Group) is trying to go public in this market and plans to list on NYSE if it does find buyers. Penthouse went bankrupt in 2003. It was taken over by Pet Capital Partners, which gained control by buying up Penthouse bonds that received stock in the reorganization. If investors will not put up enough money, Bankruptcy No. 2 looms again. The big investment banks seem to be shying away from the deal, even though at $460m it would generate badly needed fees. The only underwriter is a Cyprus-based subsidiary of a Russian bank. FULL ARTICLE @ NY TIMES

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FriendFinder Not Likely To Find Pals On Wall Street

CNET NEWS -- Dec 24 -- Friend Finder Networks, the company formerly known as Penthouse Media Group, is filing an IPO (underwritten by Renaissance Capital, based in Moscow) to pay off almost a half a billion in debt, to stay alive. The $460m IPO will go to paying off FriendFinder's ~$450m debt. For the nine months ending September 30, FriendFinder had revenue of $243m, operating income of $17.6m and a net loss of $32.3m. In its prospectus:

Our ability to continue as a going concern is dependent on our ability to raise additional capital, including from this offering. As of September 30, 2008, our balance sheet had...$420m in short-term debt... $411m of which had been reclassified from long-term debt, due to our failure to comply with certain covenants and restrictions in the agreements governing our 2005 Notes and 2006 Notes... We do not currently have sufficient cash to repay this indebtedness if our debt is accelerated and if the noteholders instituted foreclosure proceedings against our assets.

FriendFinder averaged 1 million paying subscribers a month for the first nine months of September 30 good for 77% of Internet revenue. Net revenue per subscriber was $19.06 a month. The monthly churn rate is 18% for the nine months ending September 30, down from 19.6% at the end of 2007.

Various neglected to collect taxes in the EU. The company says:
After our acquisition of Various, we became aware that Various and its subsidiaries had not collected VAT from subscribers in the European Union nor had Various remitted VAT to the tax jurisdictions requiring it. We have since registered with the tax authorities of the applicable jurisdictions and have begun collecting VAT from our subscribers in the European Union and remitting it as required.
FULL ARTICLE @ CNET NEWS

Mark Brooks: The IPO is underwritten by Renaissance Capital a Moscow based investment bank. Huh? On the other hand, adult site membership is up, user churn is down, and ARPU is $19.31 a month. Your comments please.

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FriendFinder Files For $460 million IPO

REUTERS -- Dec 23 -- FriendFinder Networks Inc, an operator of social-networking websites and publisher of the adult men's magazine Penthouse, filed on Tuesday for a $460m initial public offering. FriendFinder plans to use the proceeds of its IPO primarily to pay off debt, according to a filing with the U.S. Securities and Exchange Commission. FULL ARTICLE @ REUTERS

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Online Personals: Changing Norms, Changing Business Models

CLASSIFIED INTELLIGENCE REPORT -- Oct '08 -- JupiterResearch predicts the online dating industry will hit $1.9 billion by 2012, not including matchmaking services at $250m+ in the U.S. Mark Brooks, who monitors the personals industry, pegs 2004 as the year when dating sites matured. "There are less people on dating sites, but they're spending more money." The CEO of The Right One/Together Dating, Paul Falzone has been in the business 20 years. "When times are good, people want someone to share the fun with. When times are bad, they want companionship."

The Free factor - Free has become a very real factor in the industry, with the emergence of PlentyOfFish.com. POF has more than 10m profiles, and 2m active monthly users. "He's the renegade of the market," said Brooks. "He's making the other players think about advertising money." Frind acknowledges that his $10m in yearly ad revenue has gotten people's attention, but he thinks the traditional dating sites are too invested in the paid-membership model to shift gears.

The Facebook factor - Many in the online dating industry believe social networks will not be a negative factor because SN are for friends and people are posting all sorts of material there they might not want a prospective date to see. But Robert Lee, who has been reviewing dating sites at ALoveLinksPlus.com, believes Facebook is going to figure out how to establish different layers of access, so a user can create a dating-oriented profiles that not everyone can see. As of Oct. 18, Facebook had 497 dating applications.

Different marketing and revenue models - "Personals ads" in newspapers was disrupted by the Internet in the mid-1990s but is being revived with a new focus on Web-first publishing, promoted in print. Another model uses the Web as its operating venue, but drives new customers through heavy advertising in traditional media. Cupid.com makes deals with radio stations to run ads for free in exchange for a share of revenue and claims a conversion rate of 13%. eHarmony and Match spend millions on TV advertising. The typical revenue model is "browse for free, connect for a fee." Matchmaking sites such as Kelleher and Associates, Together Dating and It's Just Lunch have a dual role in the online ecosphere. First, they buy leads from online dating sites, creating yet another line of revenue. Paul Falzone bought LoveAccess.com as a way to generate his own leads. In the 1980s, Falzone's cost per lead was $200-$250 using direct mail. Now his goal is to get that number to zero.

Growth of explicit sites - At the Internet Dating Conference held in London in September, the hallway buzz was all about the explosion in numbers of women signing up for adult sites like Fling.com and AdultFriendFinder. "I'd call it a sexual awakening," said Brooks. "Guys have always been interested in the adult sites, but this is new." The average length of membership on a regular dating site is three months, compared with five months on an adult site.

The future - Mobile and video remain theoretical game-changers, enabling potential match-ups by proximity or direct communication. Brooks sees another potential business model emerging from academic research: a dramatic improvement in the quality of matching.
Full report available for AIM clients

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The Web Of Desire Or Just Deceit?

THE OBSERVER -- Oct 26 -- The web has become a place through which to contact, meet and have sex with real people. Some sites are quite explicit about their offerings. AdultFriendFinder claims to be the world's biggest adult social network and sex personals site. The site claims to have more than 2.5m members registered in the UK. Other sites quite evidently do as they promise, such as Hookuparea.com and BeNaughty.com. And when a marriage is under strain, spouses no longer have to go very far out of their way to cheat. Illicit Encounters asks on its homepage: 'Married but Feeling neglected? Illicit Encounters launched in October 2003 and now has 245,000 members, mostly in the UK. 65% of them are male. The site provides a guide on how to conduct an illicit affair, with advice tips including using a separate SIM card in their mobile phone, paying with cash instead of credit cards and never giving their surname, exact location or workplace. FULL ARTICLE @ GUARDIAN.CO.UK 

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Fling Now #1 Casual Dating Site

OPW -- Sep 9 -- AdultFriendFinder and Fling have been running close on traffic for a while now, but Fling.com just overtook AdultFriendFinder.com for total traffic according to Compete.com. See graph. I included Match.com to give some perspective on the graph.  Fling is up 7.4% for the month with 22m unique visitors, and AdultFriendFinder is down 3.5% for the month with 21.7m uniques. AFF has a LOT of momentum, but Fling rides on a very considerable affiliate network of its own. AFF still has a considerable lead for user engagement and visits. These collossals of the adult dating world will be duking it out for a long while to come but without Andrew Conru at the helm, will AFF be able to maintain a lead? Your comments please. (Disclosure: Fling is a client of Courtland Brooks).

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FriendFinder IPO Delayed As Developers Mutiny

VALLEYWAG -- June 27 -- The effort to migrate into an online publishing and social networking powerhouse is being hampered by developers dissatisfied with working conditions and an inability to hire new staff.  An internal email obtained by Valleywag features Anthony Previte scolding the mutineers for disappearing from work early and being insubordinate. This news might put off the investors necessary to bankroll the company taking itself public — assuming the rumor that the big money has already demurred, delaying the planned $250m IPO, isn't true. FULL ARTICLE @ VALLEYWAG

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Clean Up Those Bogus Profiles, Pronto!

PUBLIC KNOWLEDGE -- May 19 -- Over the years, the CDA (Communications Decency Act) has been criticized for giving Web sites too much of a free pass. Under the act, website couldn't be held liable for content posted by others. The scope of the CDA's immunity has been called into question. The Fair Housing Council filed suit against Roommates.com because the site provided pull-down menus that allowed users to choose what kind of roommate they wanted based on race, sexual orientation and gender, the court found that they were responsible for developing content and that they were not entitled to immunity under the CDA. Another suit has been filed against AdultFriendfinder because someone created a fake profile that "reasonably identified" someone. They complained and FriendFinder removed the profile, but it continued to appear in "teaser" ads. The court dismissed the plaintiff's tort claims for defamation and intentional infliction of emotional distress—but didn't dismiss her claim based on her "right of publicity". Since right to publicity claims vary from state to state, sites would have to tailor their practices to the lowest common denominator and make sure they followed the most restrictive state laws, or face the possibility of being liable for violating a state intellectual property law. FULL ARTICLE @ PUBLIC KNOWLEDGE

Niche Dating Sites Grow Steadily As Mainstream Ones Flail

TECH CRUNCH -- Apr 24 -- In the internet dating space, bigger is not always best. According to the latest U.S. numbers from Hitwise, the top niche dating sites are steadily gaining market share while their big mainstream counterparts stagnate. In March 2008, the top 5 overall sites held 7% less market share than they did in 2007 (Plentyoffish and Singlesnet were the only sites to buck this trend individually). Meanwhile, the top sites (Adam4Adam, Manhunt, Gay.com, BlackPeopleMeet, BlackSingles, BlackChristianPeopleMeet, ChristianMingle, JDate, and Christian Café) from the top five major niche dating categories made considerable gains. The biggest niche in terms of total traffic is casual dating, which consists of sites like Fling, AdultFriendFinder, and SexSearch. While the top 10 mainstream dating sites gained only 0.01% of total Internet traffic over the past year, the top three casual adult sites gained 0.07%. That's a hefty 56% increase in the traffic. (Authored by Mark Brooks)
FULL ARTICLE @ TECH CRUNCH 

Andrew Conru Engaged To Church Lady

VALLEYWAG -- Mar 24 -- What happened to Andrew Conru after selling Various Inc., the parent company of Adult FriendFinder, to Penthouse for $500 million in December. He's getting his personal life in order. He's still working at Various, but planning his departure. Conru also launched -- and sold along with FriendFinder -- a religious social network, BigChurch.com, where he met his fiance Lois. Andrew is also very interested in aquaculture. He has purchased a small boat, and is somewhere in the Pacific ocean at this very moment, accompanied by Lois. FULL ARTICLE @ VALEYWAG

Mark Brooks: I talked with Andrew in Nov '07 and he mentioned an interest in fish farming. Its plausible.

Casual Dating Affiliate Payouts Top The Industry

OPW -- Feb 15 -- Does anyone know of any dating affiliate programs that pay out higher than casual dating sites?  The super fast growing dating sites Fling and SexSearch are topping my research on payouts. SexSearch is paying out $90 and Fling $50 per paid sign up over Valentines. Adultfriendfinder is definitely feeling the heat on its tail from these two. I'm surprised how many dating sites don't have affiliate programs. Match, eHarmony, Perfectmatch and Yahoo! have good programs, but many top and second tier players have relatively small programs, if they have them at all. From the affiliate perspective adult dating sites just plain convert better, which would partly explain the rise in popularity of casual dating sites over the last few years. CJ, Linkshare, Azoogleads, Shareasale, Primary Ads, and Link Connector all drive significant amounts of traffic to dating sites.  CJ seems to have the most offers. Email me at mark@onlinepersonalswatch.com for a copy of my spreadsheet listing all the dating offer payouts on the top affiliate networks. - Mark Brooks 

Penthouse To Discuss Its Acquisition Of FriendFinder At iDate

MARKET WIRE -- Jan 24 --  Marc Bell, CEO & Owner of The Penthouse Media Group Inc., will discuss the acquisition of Various, which included the popular dating website FriendFinder, at the Internet Dating Conference taking place on January 31-February 1, 2008 at the Miami Beach Convention Center. Based upon current registration figures, this event will be the largest gathering of online personals executives in history. FULL ARTICLE @ MARKETWIRE

 Mark Brooks: This sets a few precedents. #1 The very public acquisition of an adult dating company, #2 FriendFinder actually coming out and talking. Definitely a good thing. This will be one of the best attended sessions at iDate.

FriendFinder (Various) Acquired Seniors.com Domain

OPW -- Dec 21 -- Apparently Various recently bought seniors.com for $1.8m. It's now forwarding into SeniorFriendFinder.com. - Mark Brooks

Penthouse Buys FriendFinder

NEW YORK TIMES -- Dec 12 -- Penthouse Media, has acquired Various (FriendFinder) and its subsidiaries as part of a plan to expand its reach. Various operates more than 25 sites including AdultFriendfinder, and has more than 260 million members and 1.2 million paying subscribers. The combined revenue of both companies is projected to be $340 million in 2007. Penthouse was purchased in 2004 by PET Capital Partners, a group of private investors. FULL ARTICLE @ NEW YORK TIMES

FriendFinder HAS Been Sold

OPW -- Dec 10 -- It's confirmed. Rumors have been piling up, but I've confirmed that FriendFinder was indeed sold to Penthouse for ~$500 million last week.

AdultFriendFinder Rapped For X-rated Pop-ups

TECH CRUNCH -- Dec 7 -- Federal Trade Commission (FTC) restricts AdultFriendFinder's promotional activities. AdultFriendFinder affiliates used pop-up ads to drive traffic to the site, and exposed consumers, including children to sexual explicit images when search for terms including "flowers," "travel," and "vacations."  AdultFriendFinder and it's affiliates have to stop displaying sexually explicit ads to consumers unless they are seeking this kind of content. AFF has to make sure that its affiliates comply with the restriction, and end its relationship with any affiliates who do not comply. FULL ARTICLE @ TECH CRUNCH

FriendFinder Donates $200k

PRESS RELEASE -- Nov 29 -- FriendFinder Network is giving $200k to charity and members can suggest the charities to distribute the $200k to. Top charities picked by members so far (30k votes) include: American Red Cross, St. Jude's Children's Hospital, American Cancer Society and Make a Wish Foundation. FULL ARTICLE @ PR WEB