Online love sites face mid-life crisis

TORONTO - With an estimated 40 million people seeking love online, internet romance is big business, reportedly worth more than half a billion dollars in North America.

In recent years, the number of people visiting web romance sites rose as dependably as Valentine's Day returned every Feb. 14.

But the data suggest that while fools will continue to fall in love – or lust – the number of people seeking Cupid's virtual arrow is no longer growing as rapidly as before.

This Valentine's Day, fewer Canadians will be trying to meet someone special through the internet, experts say. Revenue growth is slowing and the number of visitors coming to the sites is in decline.

Nate Elliott, an analyst with U.S.-based Jupiter Research which tracks internet commerce, says that after years of double- and triple-digit growth, the first bloom is definitely off online romance.

"I think what you're seeing here is just the natural maturation of the industry," he says.

Bruce Croxon, chief executive of LavaLife, an early pioneer of online dating sold to an American company for $153 million in 2004, concurs. "The industry has plateaued," Croxon says.

"What we need to do is make sure that as we move forward we're ... innovating and coming up with smart, effective ways to put people together," he adds.

In order to counter the decline, some online dating sites are specializing in niche demands, such as people's statistically documented proclivity to stray outside their relationships for extracurricular liaisons.

Darren Morgenstern's company, AshleyMadison, targets the cheaters' market.

"We have a built-in recession-proof component to our business model. People don't stop having affairs for any reason," he says.

Morgenstern claims his business has doubled every year since it started in 2002.

"We know that as many as 70 per cent of men and 50 per cent of women will stray at some point in their relationship. And because we have that unique niche in the marketplace I truly feel that we'll continue to grow..." he says.

So while the online dating industry may not be in any imminent danger of calling it quits, it looks like it may be facing a mid-life crisis.

©  Copyright 2005 CBC