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Profits Stand Up JDate


And shareholders are feeling jilted.

They say there are plenty of fish in the sea; there seem to be just as many online dating services.The social stigma of online dating is long gone, and more social networks and free sites that focus on pairing up the lovelorn pop up each year. This leaves those enrolled in subscription dating sites such as IAC/InteractiveCorp.'s (IACI) and eHarmony wondering whether their money's well spent.

Although and eHarmony maintain healthy traffic via prominent advertising, Spark Networks (LOV), the owner of niche dating sites such as JDate and, has seen a significant drop in the matchmaking game.

Subscribership in Spark's Jewish-themed service has fallen 3% in the first quarter. But they aren't the only ones in exodus: Spark has seen a 9% drop in its sites overall, resulting in a 13% drop in its stock value since the beginning of the year, and a whopping 44% drop since this time last year. Given all this mishegoss, Spark is planning to change its image and focus less on its prominent Jewish singles site.

While it's likely that the proliferation of free dating sites is at least partly responsible for JDate's woes, analysts have also attributed the site's negative growth to a hike in its membership fees two years ago. The steeper price, along with with the recent slash in JDate's advertising budget, by roughly $150,000, has left JDate members feeling cheated and neglected -- perhaps the very reasons why they joined the service in the first place.

But the company's top brass have taken note: During a recent conference call, they claimed to be considering lowering their fees. But, unless subscription costs are eliminated altogether, they may still face a problem.

Many consider Spark's 20% dip in first-quarter revenue to be a sign that the subscription model is no longer viable. -- one of the many free, ad-supported dating sites -- has enjoyed a nearly 100% increase in subscribers from a year ago. As long as there's a no-cost solution to the problem of finding a mate, users are likely to opt out of paid services.

And that desire to leave may just get more pronounced if Barry Diller -- chairman and chief executive of IACI -- makes good on his recent threat to purchase the rights to Yahoo's (YHOO) high-profile Personals site. Already struggling with fleeting brand recognition, Spark and its niche sites could just vanish.
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