Web Dating Game Heats Up

This column was originally published on TheStreet.com on Nov. 15 at 6:53 a.m. EST.

Troublemakers on the online dating scene may have met their match in a group of increasingly brand-conscious Internet giants.

Yahoo!'s (YHOO) Yahoo! Personals and IAC/InterActiveCorp's (IACI) Match.com, two of the largest Internet dating sites, are stepping up their efforts to weed their services of abusive, obnoxious or married people.

Earlier this year, Yahoo! instituted a code of conduct for online daters in which they must swear that they are single and won't be abusive toward other members. The company also has made it easier for members to report misbehavior. Match.Com has added additional people to its fraud and abuse unit, says Thomas Enraght-Moony, a Match.com senior vice president.

The effort comes as the online dating market consolidates and surviving services fight off competition for loyal users from social network sites like Friendster.com and News Corp.'s (NWS) Myspace.com, which also offer free dating, and smaller upstarts such as True.com.

"They have got very significant brands that they have to protect," says Mark Brooks, who runs the blog onlinepersonalswatch.com. "They can't have people who are scamming, spamming, being obscene or being obnoxious. It's very bad for their brand."

Building a brand is key for Internet sites as they vie to win the public's attention. Over the past few months, Yahoo! has added financial columnists to its site and reports from war correspondent Kevin Sites. New York-based InterActive has sought growth through acquisitions, including July's $1.9 billion purchase of the Ask Jeeves search engine.

The enormous emphasis that Web companies place on drawing new users is evident in the recent surge in attention paid to Time Warner's (TWX) America Online. After years of subscriber losses, AOL has emerged in recent months as a hot property because of the reach of its Web sites.

For Yahoo! and IAC, online dating is a serious business because it helps drive traffic, though the dating sites themselves aren't big revenue generators. Sunnyvale, Calif.-based Yahoo! doesn't release specific earnings results for its services. Revenue from fees Yahoo! customers pay for offerings such as dating and fantasy football rose 55% in the third quarter to $170 million, representing about 13% of the company's overall sales in the quarter. Third-quarter sales at Match.Com were $66 million, up 33% from a year earlier.