Plentyoffish Paid Virtual Goods…

Plentyoffish paid goods are up,   this will hopefully help us keep some of the users who feel spending money is a sign of quality.

Facebook Ditches 3′rd party ads.

Everywhere on facebook at least in canada they are running nothing but social ads.     It used to be only 1 ad per page but now its three of them.      I’ve long said that  text ads and banner ads will be dead as a business model.    The only reason that text ads are more profitable than banner ads is because you can promote 4 products in a 728*90 space instead of 1 product being promoted by a banner.   I figured out years ago as did many people that sticking pictures next to text ads greatly increases CTR and revenue.     So you get the benfits of a banner ad,   with the ability to promote multipul products at once.

I think facebooks Social ads  if syndicated like adsense will be the future of online advertising.   Every single ad on facebook is an ad for a local restaurant or business.     In Canada facebook owns local advertising in a way no other company has ever come close to.

Listening to users is bad…

When it comes to building social sites listening to users is a bad idea.    The ones that want something the most are usually fringe users who want something very specific.    For instance on my site there are 900,000 dailly users  of which 2,000 use the forums.    Of those 2000 users who use the forums less than 50% are actually single and even fewer are actively looking for someone.

Over 90% of suggestions for changes to the site come from this group of users,  but these users represent less than 1/450 users on the site.    Basically if there are good ideas out there that users are suggesting its ones that are standard features on other dating sites.    Users do not suggest game changing features,  in fact users are usually against them.     Just look at facebook’s  news feed,   or  eharmony,   or match.com  when it first launched etc etc.    To create something game changing  you have to be like apple,   you just build interesting stuff and test it on users until you find something that works and then you release it to everyone.

I think the best example of a company doing that kind of stuff online today is Google,   it acts like a cult,  all the employees believe in google and believe they can do anything  so they try everything.   At google if anything goes wrong they will always put you in contact with the right person, and they build products that are dead simple and easy to use.

On the other hand you have companies like yahoo  that are completely disfunctional,   last year they owed me a few hundred thousand $.   It took months and months of being passed along to different people who couldn’t make a decision  or want to be responsible for anything until i finally got paid. 

At google everyone acts as one,   at yahoo it seems everyone acts for themselves.   I have always followed a google like model since the very start.    Name me a single  hugely successful internet company that is driven and built by user suggestions.   I can’t think of a single one,   but I can think of a lot of sites/companies that have been created based on ones persons vision/execution.

Monetization free verse paid.

Looks like snap is making some money  but compared to the traffic they have and ads it doesn’t amount to much.

Snap has  1.4 Million visits a day and made $533,000 in 3 months,  that works out to .4 Cents a visit.   Once they introduced all these paying features and multiple banner ads etc it increased to .6 cents a visit.

Eharmony makes about 75M a quarter on 52 million visits,  that works out to $1.45 a visit.  Even if i’m off by 50 cents its still 200 times as much revenue per visit as snap.

The problem with free is that every time you double the size of your database the cost of maintaining the site grows 6 fold.   I really underestimated how much resources it would take,  I have one database table now that exceeds  3 billion records.    The bigger you get as a free site the less money you make per visit and the more it costs to service a visit.

We are going to start introducing some products and features to try and get some of the 10 to 20 million dollars a month my users are spending elsewhere.     There is really no money in being free and we have to start experimenting with other models now  or we won’t be able to compete in 3 or 4 years.

Plentyoffish is hiring.

A few months ago I gave up customer service completely,  now i’m looking at getting out of the systems adminstration job.   Building machines,  making sure all the storage arrays work and everything is patched is becoming to much of a pain, especially when traveling.    I have no desire to fix hardware failures or server issues in the middle of the night,  or to figure out how to program routers and load balancers from the command line.

I know a lot of dating site owners read this, what have been your most important hires?