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Match Made in Seattle

With a tight budget, big vision and persistence, Seattle’s Kiss.com has slowly but surely blossomed into a profitable, fast-growing Internet biz. Recently, Kiss.com had some 600,000 paying members (40% women), and the site averages 61 million page views a month.

BTW: Kiss.com has managed all this without outside financing. That’s because this six-year-old company has relatively low fixed costs. The biz plan is simple. Kiss.com posts online personal ads, photo included, for free. You can also browse their participant database free of charge. But to contact other participants, and to join chat rooms, you pay. The service is strictly digital (no big boxes to ship), and the participants provide virtually all the content.

Sound intriguing? To find out more, we tracked down CEO Duane Dahl, just as he was leaving for London.–SJ

Seattle24x7: Duane, there are lots of other online personals sites. Who’s your biggest competitor, and how do you distinguish yourselves?
Dahl: MatchMaker.com is certainly a major competitor. They’re owned by the TicketMaster group. The larger sites, like MatchMaker.com and FriendFinder.com, tend to include adult-oriented or alternative lifestyles [swinging, S&M, etc.]. We focus strictly on romance and personal relationships [both hetero and gay]. We have no advertising on our site, and we never provide our participants’ info to outside sources.
In the past 18 months, especially, we’ve found that “intentional” dating is coming into its own. Instead of waiting to meet someone at a bar, restaurant, party or gym, people are being more proactive, and online picture personals allow them to be as passive or as active as they want to be.

Seattle24x7: What’s your traffic and revenue like?
Dahl: We’re averaging more than 60 million page views a month. Currently, we have around 1.8 million different people using the site, and 600,000 of them are paying members. Half these members are on the monthly plan (they pay $16.99 for one month), and the rest have one of the other plans (three-month, six-month, annual, etc.).

Our revenue has been increasing recently by 10% month-to-month. And it’s rising consistently. To give you an idea, in the third quarter of 2000, we topped our revenue for all of 1999. Our cancellation rate is around 27%, with a good number of those people canceling because they’ve met someone.

Seattle24x7: The photos on Kiss.com seem to be crisper and generally more attractive than those on competing sites. Why is that?
Dahl: Our inhouse staff spends quite a bit of time touching up photos to make sure they look as good as possible online. About 40% of our 1.5 million users have posted photos, and we find that photos enhance response rate.

Seattle24x7: What’s your billing system?
Dahl: Our members worldwide pay via credit cards, so that the form of payment is tied to an individual and an address. And we are currently pursuing a relationship with a pay-by-check organization, because we do get a dribbling of inquiries from people who don’t use credit cards.

Seattle24x7: What’s your infrastructure like?
Dahl: We host the site ourselves, currently relying on four servers. And we’re in the process of updating our servers and increasing our capacity. We’ll also be moving soon to another downtown location where we can have access to T-3 connections. Most of our 30 employees live in Seattle proper, so we feel a need to stay in the downtown area.

Seattle24x7: How do you market the site, and who does your advertising?
Dahl: Our top three marketing vehicles are Yahoo.com, Excite and NCBi. And we do banner ads or co-branding agreements with these portals. At Yahoo.com it’s banner ads and key-word searches. But with Excite and NCBi we have a co-branded product [Kiss.com provides the content for the Personals section of these websites].

So far, we’ve done all our own ad-placement and creation. But we are just typing up our first-quarter budget, and in that, we are taking a look at offline advertising in radio and print.

Seattle24x7: This past fall, you hired Greg Heuss, who formerly led Amazon.com’s Events & Marketing initiatives. What is he bringing to the table?
Dahl: Greg is making sure that our marketing strategy is balanced, and that we’re not just putting all our eggs in the latest fad mentioned in eCompany magazine. He can look at the business and have confidence in doing more print and radio, developing an events strategy and international initiatives.

Seattle24x7: What are you doing on the international front?
Dahl: Currently, about 78% of our participants are in the U.S. Although we also have members in numerous other countries, we haven’t made any efforts to market internationally. Greg and I are leaving for London this week to talk with the Excite people about co-marketing Kiss.com in England. We’re currently getting a tremendous amount of traffic from the U.K.

Seattle24x7: What is your vision for Kiss.com?
Dahl: We see ourselves as much more than an online company, and we intend to expand into offline services that leverage our online operations. For instance, we’re about to launch local events for singles, marketed via radio and our website. And we’re planning to offer travel packages for active singles. In addition, we’re about to announce that a best-selling author on relationships is becoming Kiss.com’s resident expert.

Seattle24x7: What percentage of your members engage in instant messaging with each other?
Dahl: It’s about 15% right now, but that’s expected to rise. Overseas, instant messaging is much more widely used, and we see that pattern also coming to the U.S. Imagine being at a ski resort, finding out what other members are also there and then sending them messages.

Seattle24x7: What are your staffing needs?
Dahl: Our staff size will probably grow by about 15% in the next six months (from 30 currently). Our main needs are in web-development and marketing. One of the main benefits of working at Kiss.com is that you have the opportunity to make a difference, to sit around the table with the CEO and the VP of Marketing.

Soula Jones is Content Chief at Seattle24x7.

Offices: 85 South Washington St.
Seattle, WA 98104
Phone: 206-622-4631
Fax: 206-6222-4632

Year founded: 1994
Executives: Duane Dahl (CEO), formerly VP and COO of Zuno Travel, one of the leading travel agencies in Washington, Oregon and Arizona.
Greg Heuss (VP Marketing), formerly headed the Events & Marketing initiatives at Amazon.com, working directly for Joe Galli (Amazon’s former head of Marketing).

VC Funding: none
Paying members: about 600,000
Site users: 1.5 million (40% women)
Traffic: more than 60 million page views/month