Late last year, Friendfinder sold its adult operations to Penthouse for some $300-500M. The deal size was nothing to sneeze at, but the deal came in at a paltry 1x revenues. One reason for this low multiple had to do with the fact that the owner is looking to IPO and wants to get out of the seedier side of the business.
Another reason was that the online personals space is largely a mature, shrinking business. Online personals - the original ones - were all subscription-based businesses powered on monthly charges.
Plenty of Fish, a Canadian site that offers free online personals, has certainly disrupted the market and become (if not the) largest player in the space. I wrote about my experiences dealing with online personals site and offered 10 tips / lessons here. I wrote that when Spark Networks (folks behind the AmericanSingles property and many private label sites such as TheOnion, etc.) were all early on disrupting the newspaper, magazine and TV personals services. Many of the online personals companies were in fact repositioned companies from old media (Lavalife, for example). But now you are seeing a site like Plenty of Fish disrupt the disrupted.
It’s interesting to examine the main reason for success is not a better user experience, or superior customer service. It boils down to one word: free.
The NY Times rightfully makes the parallel to Craigslist, who also free has disrupted the classifieds industry enormously. But it is very interesting that one of the main pluses of Craigslist (which is customer service) is nowhere to be seen on Plenty of Fish.
This does destroy the myth that CSR is all that valued across the board. I think as the article suggests, because the site is free, people put up with a lot more… maybe this is just one more nail in the coffin for anything paid.
We already know consumers do not want to pay for content, but not for services either?
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June 26th, 2008 at 3:52 am
I think plentyoffish.com will never be for sale, it is generating over $6 mill a year for the owner. I can just see it becomming bigger and bigger in years to come.