MatchNet's recent IPO filing, star-crossed as it may have been, hinted at what I have suspected for some time: Online dating, once viewed as the realm for losers and geeks, has become a regular part of Internet social life -- and another type of content Netizens will pay for.

Strong trends cue explosive growth, like the fireworks that started "Love, American Style" off with a bang. High-speed broadband and muscular new computers ease clicking through pages of profiles. Increased transience and demanding schedules make it hard for singles, and the bar scene gets old. Moderns get married later, leaving lots of time for dating around. Last, our woefully high U.S. divorce rate leaves many re-released into the field.

There's proof in the numbers. According to Jupiter's Internet research, online dating is expected to grow by 60% to $642 million by 2008. As it stands now, two out of five singles have tried it.

MatchNet may have withdrawn its IPO filing, citing the "faltering" climate for Internet IPOs (despite Google), but it contained good info on the industry. There are 86 million single American adults. According to the Online Publishers Association, online dating was the No. 1 segment of content purchased online this year, growing 49% to $450 million.

MatchNet -- the name behind JDate, American Singles, and several others -- would have been the first publicly traded online dating pure play in the U.S. There are likely plenty of investors waiting to get in on the action, since the other companies in the space are either private or simply pieces of larger publicly traded entities. Is there reason to weep over what might have been? Probably not. Let's not forget, with starry-eyed romance comes risk.

Love in all the wrong places?
Since 1999, MatchNet's sales have grown 460% to $36.9 million, mirroring the upward trajectory of online dating. Last year, its net revenues increased 125%, with a 61% increase in "active members" and a 138% boost in paying subscribers.

However, MatchNet also disclosed a sharply wider net loss for the year -- $10.9 million, or $0.57 per share, from a loss of $0.5 million, or $0.03 per share the year before. Revenue per subscriber decreased by 17%, while subscriber churn increased by a few percentage points.

The company's swelling expenses are largely a result of increased marketing costs -- up 233% last year -- because of competition. Partial justification for the IPO was to fund additional marketing and advertising.

Then there was the little disclosure that MatchNet's co-chairmen received 265% bonus increases in 2003, giving each a $1.4 million payout -- in my opinion, overly lavish compensation for a company poised to drum up public funds.

An IPO withdrawn just eight days after filing gave me the creeps. MatchNet's press announcement also disclosed the resignation of CEO Todd Tappin (formerly of Overture and News Corp. (NYSE:NWS)), who has been on board since only February, and the fact that it now plans to cut 40 positions to trim costs.

Love competition
Regardless of how investors might yearn for a slice of the online dating pie, there's tough company. The big brands include IAC/InterActiveCorp's (NASDAQ:IACI), as well as Yahoo! (NASDAQ:YHOO) Personals. Privately held Spring Street targets hipsters through sites such as sexy and my favorite humor site, The Onion.

Social networking sites have served many of the same hook-up purposes, free of charge, though Friendster seemed to lose momentum once Internet denizens saw how "connected" they were (and how slow the site was!).

Bulletin board site Craigslist quietly turned into a hip way to meet romantic prospects. (It's free, but it recently added New York and Los Angeles to San Francisco as cities for which it charges for employment ads, as it, too, is funding expansion.) Orkut is a social networking site still in beta and loosely affiliated with Google. InterActive is planning its own foray into social networking (which certainly could have some synergistic relationship with Match).

Social networkers likely changed the fee-based Internet dating space. Instead of being a virtual "meet market," there seems to be demand for complex psychological profiles, a valuable differentiation from offline personal ads or social networking -- enter eHarmony and

In fact, eHarmony shook Match up with its claims of compatibility accuracy and resulting successful marriages (indeed, eHarmony patented its formula); Match now offers compatibility profiling as well.

Fear factor
Another hurdle -- indeed, risk to the effectiveness of the sites -- is quality of users. Credibility is a serious concern in the industry, and any highly publicized dirty dealings could result in a PR nightmare for any of the players.

Males tend to complain about "false advertising," such as old photos. ( supposedly may offer a service to "certify" photographs.)

Women, on the other hand, complain about married or unavailable men preying on single females. That's how goes for rivals' jugulars. "Warning: Married people need not apply," the site says, adding that such an act constitutes fraud and it can nail people for it. also offers background checks to protect users from creepy criminal types.

So, True already capitalizes on one major barrier to widespread consumer adoption -- those paranoid of "stranger danger."

All's fair in love and price wars
There's also a lack of pricing stability. Already, Match, which seems to have service plans that charge anywhere between $19.95 to $29.95 depending on its latest whim, is contending with formidable foes such as eHarmony, which bills a whopping $49.95 introductory premium. (Maybe it should be called "eHarmoney.") However, True sees opportunity in the middle ground, charging $29.99 for a month.

It's likely perceived that people will pay more for real "matching," which eHarmony and True both claim to provide. Hold your criticism: many users probably feel the higher prices insinuate users who are more serious about "real relationships."

eHarmony picks specific "matches" (which can be few and far between) using its complex profiling. The emphasis on "quality, not quantity," and its four-step program of anonymous communication before "open communication," represents a departure from Match, through which users post profiles and then get flooded by the messaging masses.

JDate, MatchNet's most popular site, sits at the high end of the spectrum, at $34.95 per month for its targeted, niche offering, while its AmericanSingles service is $24.95.

However, many of the sites now feature lowered fees for commitment-phobic, serial-dater customers. (I couldn't resist. What I mean is, customers who commit to more than one month of the service.) That, of course, digs right into the top line.

Cold feet?
Not to mention, there are intrinsic challenges, including continued industry evolution.

A recent Wired article showed there are already hackers and geeks monkeying around with online dating, even one guy who wants to use Google as a dating platform. (I joked about "Google Dates" a while back, but I can imagine some possibilities, such as text-related ads for activities that key off common interests.) There will be no resting on laurels. The name of the game will be "innovate."

Ultimately, the marketing implies that singles will meet their matches (and get out of the game). For the services, it's sort of "damned if you do, damned if you don't." They need success stories -- and to make sure that users don't burn out or get burned -- to survive.

With the current emphasis evolving from speed dating and buffet-style trolling to one of true "matching" based on compatibility and a desire to find "The One," financial success may become a paradox. As long as love exists and the industry evolves, maybe there's only so far any of the services can go.

So, if MatchNet decides to revive its scuttled IPO filing later -- or if the other privately held contenders decide to go public themselves -- my advice would be: Look out, investors; when it comes to this industry, you may have to kiss a lot of toads.

Alyce Lomax does not own shares of any of the companies mentioned, though she'd like to point out that the Fool pulled a rather prescient April Fool's Day prank in 2002, before she worked there. Did she fall for it? Naaaaah. The Motley Fool has a disclosure policy.