Two years ago primary school teacher Anna Loose met the man of her dreams online. The only problem was she was living on the Isle of Wight and he was in Bermuda. But love found a way.

Loose, 32, had been looking for a boyfriend online for a while. “It started as a laugh. I used the free sites but I was looking for someone for life and most of them were looking for the lighter side, if you know what I mean,” she said. She knew she wanted something more serious and so like 20m others she signed up for Eharmony.com, a pay site that with arch-rival Match.com now dominates what analysts calculate is already a £1 billion a year matchmaking business.

It took an hour for her to complete Eharmony’s 250-question battery of psychological tests and in return she was matched with 300 people who the company believed would best make a match. When she found Andrew Holland, 33, in Bermuda, she said: “I knew straight away that this was him. It took him a little longer.”

Months of emails led to a face-to-face date at Beaulieu Palace House in Hampshire. A year later, in July 2008, Holland took her back to the rose garden at Beaulieu, got down on one knee and proposed. The couple, now married, spent a year in Bermuda before moving to Essex last year. “I don’t think any of this would have been possible without the internet,” she said. “Because of those tests I got a clearer idea of what I was really looking for.”

The private company now claims that 2% of all American marriages start on its website.

Eharmony doesn’t release its financial figures, but Match.com, which also claims 20m members and charges a monthly fee, does. In the last reported quarter, Match’s parent Interactive Corporation said the division had revenues of more than $83m. Free sites may have larger numbers of users but they make far less money. The big two online dating sites appear to have found the magic formula. “This is an unusual business,” said Greg Waldorf, Eharmony’s chief executive. “There are few paid services on the internet where you are not getting a box delivered in the mail.”

Last year was a tough one for business in general — and love was no exception. Globally, dating services saw a small decline of 1% but in Britain visits to sites were up 16%, according to Comscore, the online analyst. With the American market flat, the US giants are increasingly courting foreign lovers. After a soft launch in Britain in July 2008, Eharmony is in the middle of a big ad campaign. It seems to be working.

The site added 130,000 UK subscribers in January, according to the firm, and now has more than 800,000, paying up to £34.95 a month, depending on length of subscription. Match.com, longer established here, has more than 6.5m subscribers in the UK.

Worldwide, 1.2 billion people logged on to dating sites in December, according to Comscore, and their subscriptions and advertising have created a $1 billion business. The biggest free site, Plentyoffish, is an internet phenomenon. Worldwide it has 19m users and doubled in size last year. Last month Plentyoffish attracted 933,000 visitors in Britain alone, said Comscore. Founder Markus Frind has said it makes $5m to $10m a year in advertising. No wonder everyone wants to be in the online love industry. But online dating can also be a heart-breaking business.

Joe Tracy, publisher of The Online Dating Industry Journal, said he sees up to five dating sites launched every day. Services targeted at niche groups have become particularly popular after the success of sites such as Jdate, aimed at Jewish singles. There are now dozens of online sites for religious groups, including Catholic singles, Episcopalians and Mormons. But their chances of success are minimal, said Tracy. “We estimate that 99% of those who start a site will fail,” he said.

Leaders of the online love industry such as Match.com and Eharmony now make so much money they can afford to spend millions on advertising, recruiting more and more singles and making their sites more attractive. At the same time, they are spending millions more sharpening the technology they use to bring those singles together, said Tracy. Globally the top-ranking sites are locked in a marketing and technology battle that makes it “almost impossible for new players to break in”, he said.

Analysts are watching 2010 carefully to see if the global decline for paid sites last year was economic or due to the amount of time people are now spending on Facebook and other social networking sites. The roaring success of Plentyoffish may in part suggest it is economic.

Kate Bilenki at Plentyoffish said the site appeared to be picking up business that would otherwise have gone to the paid sites. “If you are on Match then you may find that the same people are also on Eharmony. So a lot of people are signing up with us as well because we are free,” she said.

It may seem that the online dating market is proving to be yet another battleground between free and paid-for content on the web, but Waldorf said there was room for both.

He said free sites would always attract people looking for casual encounters but those looking for a serious relationship were increasingly willing to pay for a service that helps them find what they want.

Waldorf is betting that he can stay on top of the dating game by sharpening his psychological tools. The firm is serious about serious relationships and is conducting what is probably the largest scientific survey into the psychology of true love. It has a team of researchers assessing successful relationships and what makes marriages work, and is changing its questions to suit local markets.

In Britain, for example, marriage is less important than in America. “People still want long-term relationships but marriage is less of a priority,” he said. What Waldorf said holds true across the different countries: what people think they want and what will make them happy is often not the same thing. It is a problem to which online dating offers a solution, he believes.

Eharmony was founded by Neil Clark Warren, a clinical psychologist. His research found the old saw that opposites attract was true but that compatibility was at the heart of happy long-term relationships. The internet offers the illusion of infinite choice and selecting from that array is rarely more important than when choosing a long-term partner, he said.

Waldorf said that if people are going to pay for a service, the quality of matches has to be good. “People have high expectations knowing that they have to pay for it,” he said. Love is a serious business. Happy Valentine’s.

Source: business.timesonline.co.uk

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