Nice synopsis on the advertising debate. I do not see advertising going anywhere, but I do see it changing. I believe that we will see advertising converging with new media, given to the audience in ways that are much more ingrained in their experience, such as with video clips. Advertising that attaches itself to required actions users take on the site, such as giving virtual gifts that represent real products for example.

-Veronica

Re. valuation – effectively what some of our partners now have is a good site generating $100k/month or more. If they put no more marketing into the site then the following month it will still generate around $80k/month – the month after that (again, with no marketing by them) the site will still generate around $64k and so on and so on. This is because the site sites on a network which is still generating new members through other sites on that network – so even if the site owner stops marketing, new members will appear on their site via the network.

This revenue without spend is pure operating profit.

The value of any business is influenced heavily by the systems it has in place – eg. if you strip out the owners of the business, does it have the right systems in place to ensure continued profitable growth? Partners on our platform provide the marketing system (eg. spend X, generate Y) and we provide the rest of the systems – this is why it’s an attractive opportunity to investors. Once the partners have established their sites with a good brand and a marketing system, they require very little extra input.

This isn’t the place for a debate on the issue – I’d be very happy to debate this at the next iDate or other conference. I would, with respect, suggest that the numbers speak for themselves – online marketeers will choose the option that makes them the most short, medium and long term profit and value – and in all those cases they’re finding that a white label platform is the better option and that’s why there has been such significant growth over the last couple of years in this area.

Anyway, this post is about advertising killing free online dating – it’d be great for Markus to post more info on growth of his revenues or profits.

And remember what happened to the Radio Star:

Your website states “You provide your brand, website design and marketing and we do the rest.” To me that makes White Label an affiliate program. Saying someone can have their own website design is just adding fluff to an affiliate program in my opinion.

My site wouldn’t even register on the dating site scale but our emphasis is on members, so we don’t display ads and they know who owns and runs the site they choose to join. It’s never going to make me rich but I sleep well at night.

What I meat about DTE is Match.com, or more appropriately IAC – Match’s parent company, may cut loose DTE if the revenue stream is not meeting their expectations. I could see them being jaded by their pay-for sites. Just because DTE is outpacing growth in the free dating arena doesn’t not necessarily translate into revenue performance that satisfies Match’s or IAC’s boards.

On the flip side, DTE could be justified as a funnel to the pay-for dating sites, or any of the other IAC site. In which case they would be stupid to close it down.

2009 is going to be an interest year.

– Michael

FYI, IAC stock performance isn’t doing so hot these days. High of ~$135 back in April 2004, tanked on August 21st 2008 from $35 to $16, and has been hovering at or below $15 ever since. Also, for the last two years the company has been operating at a loss. Income is down from $870M ending 2007, to $374M ending 2008. This might have some any effect on Match as IAC tries to return to profitability.

Anyone know what happened to IAC on 8/21/2008? This was a couple months before the general stock market crash.