Lavalife gets into ring tones.

http://investors.vertrue.com/phoenix.zhtml?c=60678&p=irol-newsArticle&ID=923816&highlight

“a 22% increase in Personals revenues. The increase in Personals revenues was primarily due to the acquisition of certain assets of Mobile Lifestyles, Inc., an online provider of a variety of text alerts (i.e. daily horoscopes, jokes and relationship advice) and unlimited ringtones. Excluding revenues from Mobile Lifestyles, Inc., Personals revenues would have increased 3% from last year”

Vast majority of lavalifes revenues came from their late night phone lines.  Looks like the loss on lavalife.com  is being offset  by growth  in the offline phone business.

Match.com also released earnings today,   22% increase in revenue this is a lot better than Lavalife’s  3%

Orkut #2 site in India.

I was a little surprised to see the Orkut is the  number 2 site in India,  maybe it will become the number 1 site like it has in Brazil.

The interesting thing about india is it has 350 million english speaking users,  when I launched my site in 2003 it had explosive growth in India,  the only problem was that In a short time I signed up over 60,000 men and 1500 women,  an extremely large percentage of messages from the indian men where about sex…   I ended up blocking the entire country because you just can’t create a business out of that for many reasons, not the least of which is the ratio of men to women.   Also they would have ended up destroying the entire site.   Dating is a very local thing and hard to export/impose a western culture.  In India the matrimonial sites are seeing insane growth as a result Jeevansathi.com  IPO’ed today and Shaadi.com plans to IPO soon as well.

My experience is that for Indians social networking/dating  is treated as a form of porn.  
It is no surprise that not many social networks there and no dating sites dare venture there.
Exporting social networking/dating  other other countries results in culture clashes,  I wonder what it is about  Orkut that makes it so successful in places where others fail.

 

Union Square Ventures funds OKcupid ???

I noticed this new post on  Fred Wilson’s blog mentioning Sam at Okcupid.   He mentions he recently met Sam got to know him etc.    Okcupid which is based in Union Square NYC raised 6 million from a mystery firm earlier this year and I now suspect it is Union Square Ventures. 

Okcupid got some publicity in the New York Post last week.

“OkCupid’s rapidly growing base of users sends 1 million e-mails and 4 million instant messages to each other per month, he said, adding that the site’s traffic now stands at 3 million page views per day.”

Sounds impressive  but those are the exact same stats okcupid release over a year and a half ago.  

Okcupid is a site that offers free tests and when you signup  you also become a “dater”.  The site gets massive traffic from all the links to its tests out there.   Check out technorati
and this google search for  “Commonly confused words” leads to 28,000 backlinks to okcupid alone.

Indeed.com shows that they are looking for 2 more workers  and they already have 12+ employees.  The site will no doubt continue to grow and get bigger as they put the 6 million to use.  

I wonder what will happen when Matchdoctor and others copy okcupid’s distribution strategy,  ie give away free tests to get 2-10k signups a day.

New FREE Ranking System better then Alexa By Far

It used to be that alexa was the only free ranking system in town.  Unfortunately alexa is skewed and manipulated beyond belief.    I found a new service called compete.com a few months ago and it has changed a lot since then.  In the last little while it has got super useful as they have added things like number of unique visitors to the site per month,  average pageviews and average session time.

Compete.com  currently only tracks traffic in the USA.

	Unique	Pageviews/session	Avg Session time
Plentyoffish	1114k	27.3	16:40
okcupid	500k	37.7	14:08
matchdoctor	180k	17.2	10:02
true.com	9100k	9.6	6:13
match.com	6300k	22.7	13:26
singlesnet	3000k	22.2	9:26
eharmony.com	2600k	20.7	13:44
americansingles.com	2400k	28.7	10:57
Mate1	2200k	3.6	2:25

To see for your self  check out  compete.com  you can also click on the pageviews tab to get a trend of pageviews over the last year or session time.

I have asked them to dig a little deeper into the data and give a break down of monthly logins of dating sites.    This is something the industry desperately needs a ranking based on USER ACTIVITY and we all know how much the useless “unique visitors”  number from comscore,  nielson and others are quoted.   
I will post the numbers when they send them to me next week.  No doubt compete numbers will be extensively quoted in the media :).   Ranking sites based on user activity will certinately spark a PR war.

My Vision of where the web is going.

I’ve wanted to write a post like this for a while.  Here is my view of what is happening on the web today and what is driving innovation.

Phase 1.    The first great change on the web that created a real big enconomy was when Ebay came along.    To cut a long story short,  Ebay now allows 750,000 people to make their living off of ebay each year.  These people aren’t employees of ebay but they are using ebay as a platform to generate a living.

Phase 2.   Affiliate programs.  thousands of people have made millions off of affiliate programs,  started by amazon and perfected by many other companies hundreds of thousands of people are recieving payments each month for promoting various products and services.  There have been many many millionaires created in this space and a lot of companies.

Phase 3   Google Adwords.   Before google adwords affiliate marketing was just something that people with websites could do.  With the advent of adwords and its massive traffic now suddenly everyone could mass buy traffic and resell it for a higher price.  Overnight another industry was created employing tens of thousands of people who make a living off arbitrage.

Phase 4  Google Adsense.   This was the real game changer, before people could only monitize content via affiliate links.  The problem there is that if you had repeat traffic you wouldn’t make much.  If you had traffic from countries other then what the merchant would cater to you were out of luck.  Google provided a steady stream of constantly changing advertisers for your users.  This allowed you to monitize them somewhat effectively for the first time.

The first several stages were all about empowering people to make money using someone elses platform.   Once google adsense came along you could for the first time make money off your own platform.  People could build hobby sites or anything else they desired and monitize it to some extent.  Now several years after adsense’s launch we have several hundred thousand people making money off adsense and slowly building up digital empires.

Ebay Created a economy of 750,000 people making a living off its site.  Google created a program where  a couple of hundred thousand people could monetize their sites.  Now thanks to google, huge drops in hardware costs and better software  individuals and small companies can build sites that were impossible only a few years ago.  At the moment there is no better example then me,  if you would have said 3 years ago that someone was doing 600 million pageviews a month out of their apartment with no employees you would have been laughed at.  There are thousands of other people who in the past 3 years have used adsense to grow and build large sites.  In the next 2 or 3 years we are going to see thousands of these sites run by little groups taking over industries.   This is because they will have reached critical mass.   Even if only 1 in a thousand is successful  that will still hurt established players in a big way.

So what will happen to the “build anything with ajax and get funding right now” mentality?

I think that VC’s will start to wake up and realize that Ajax is a feature and not a product,  at the same time  how are 100-1000 or so VC funded companies going to compete with a couple of hundred thousand webmasters who have created sites wanting a piece of the action?  Many of these webmasters would be perfectly happy with $100/month.   But if even if 1 in  a 1000 of those adsense driven sites is very successful your entire industry could be screwed.  Just look at online dating.

Ebaumsworld… Kid makes $10 million a year from a farm.

For those seeking more inspiration read the wired article below.   He was one of the first people to see my site as I bought some real cheap advertising off him  back in 2003 or 4…

http://www.ebaumsworld.com/wired-page1.html

$10 million bucks a year for a joke site,  not to bad…   One day i’ll have to start selling fixed text links on my site for $3,000 a week with 20 some spots

Michael Birch, CEO Bebo.com

When I first heard of the social networking site bebo.com I thought it was nothing more then a front/spam  for other services.    Boy was I wrong,  the CEO Michael Birch has built many sites over the past few years and sold a lot of them.

Bebo has grown huge in the UK,   I didn’t start watching the UK market until recently, but from what I can tell Michael has taken the company from 4 million daily pageviews to  60-75 million a day in the UK.   The company has also recently taken funding to the tune of $15 million.    I don’t really like the idea of taking VC money as it signals that you are most likely going to sell the company in the next 3 years.   Given that Michael starts one company after the next I don’t think he cares to much…  For a quick laugh take a look at alexa,  suppidly 7 million pageviews a day Digg.com is 10 times bigger then 100 million pageviews a day  bebo.com

Bebo just recently hired away MSN’s European sales director. and the company is expanding rapidly in all english speaking countries and now building its own Adnetwork.    In the long run I think that Bebo will beat myspace.   Like me the founder designed most of the site and he lives close to the data.    The closer you are the raw data/traffic the more informed you are about what makes your site work and what people really want. 

I also think that now that myspace is owned by news corp the founders don’t really have that much incentive to make waves and most of myspace focus is now on making money off users  not making them happy.   I think 2007 is going to see a big clash between bebo and myspace with bebo coming out ahead.

Dating Industry today.

A lot of people think that my site got big because I was first to have a free dating site.  That is not true,  Spark,  matchdoctor and webdate all had a million members before I even started and there were  10’s of smaller sites as well.

Today I see on average of 3 new free sites per day and I highly doubt any of them will go anywhere.  The problem is 30-50% of your members abandon you on the first day.  If you are a free/paid dating service you will lose another 30% of your regular members per month. For this reason many of these sites just vanish after a few months.   Its much easier to make a social networking site which is nearly the same thing but doesn’t have the rentention issues.

David rants about the dating industry, telling them to innovate etc.   From my point of view the paid industry is screwed.    The only way you can stay in business is if you keep members around and paying for a long time.   If your company is successful then you lose that paying member and you can’t compete because your average revenue per member goes way down.      So how is the dating industry innovating?    True.com forces you to call in during business hours to cancel your subscription.    Most paid dating sites force you onto a automatic renewal system  during signup.  You can of course cancel if you read the fine print and then go to the settings section and remove the auto renewal.   Of course the favourite tactic of late which is leading to lawsuits is these companies will throw your profile to the top of the search results a few hours after your subscription expires.  You get a lot of messages  come back to the site and have to pay a new $50/month subscription to be able to read it.

We can sum up the paid dating industry pretty easilly.    Screw your customers as much as you can and extract as much money as you can.    For free dating sites its the exact opposite.  Give people exactly what they want, and hope it generates word of mouth so you can grow!

Mega Adsense Earning site.

Paidcontent is great at keeping track of business info…   Today they had a little blurb on WSJ’s earnings.   Revenue at About.com soared 29.3% to $18.3 million from $14.2 million amid higher advertising and e-commerce revenue. Profit jumped 68 percent to $6.4 million from $3.8 million.

It looks like  most of that money is coming from adsense,  not a bad little business.    Makes you wonder just how much money a site like wikipedia could make with ads all over it.

The death of Silicon Valley.

Someone Called Paul Graham  talks about mistakes that kill startups.

http://paulgraham.com/startupmistakes.html

Reason 1.   I think he is totally wrong,  just look at me.
Reason 2.   Wrong again..  look at all the companies outside the USA doing stuff.

he goes on to list 18 more reasons.

If we define a startup as  “New business venture”  then hundreds of thousands of people on the Internet qualify for this definition.     There are maybe 100 backed VC companies a year on the net ?

Up until  last year or so the only companies that had a chance of making it big were VC backed companies.  But as technology costs fall and it gets better at the same time the number of things that small 1 person companies can do rises expotentially.    We are going to get to a point in the next 3 years were many of the top 100 companies can be run by someone working at home  with little to no help.    I’d say within 20 years someone can clone what google does today and run it off a single machine at home.

my point to all this is beginning about 2 years ago  everyone and their dog could start to create a website online and build a huge business and run it in their spare time  or even full time.    Before this time the only way to create a successful site was to hire a lot of people.     What we are seeing is the long tail of the internet being empowered to create sites.   

I imagine a world in a couple of years from now,  where your mom or dad could create a Site and compete with you.   We aren’t there yet,   we have just gone from only VC funded entities have the ability to create  large companies, to small bands or individual programmers having the ability to create big companies.  Many many business models are going to change as a result of corporations having to compete with  companies of 1 -10 people.  This in turn dramatically reduce the importance of Silicon Valley.