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Tuesday, Oct. 30, 2007 at 3:28 pm

How to Make a Billion Dollars in Your Underwear

By Robert Gorell
October 30th, 2007

plentyoffish.comA few months ago, we blogged about Markus Frind, a lone entrepreneur and founder of the popular dating site PlentyOfFish.com. On a panel interview with Guy Kawasaki (watch it here if you’ve got 30 minutes), Markus claimed that he was his only employee, and that he basically spends a couple hours each day maintaining the site — that’s it — in his underwear.

Fast forward to yesterday, when Read/Write Web‘s Richard MacManus caught up with the entrepreneur, who’d just hired his first employee. Apparently, the site may now be worth a billion dollars — billions, maybe. (And hey, if Microsoft thinks Facebook’s worth $15 bills, why not?) Says MacManus:

Markus told me that per page view, Plentyoffish has 5-10 times the click through rate of Facebook. So by his calculations, POF’s 1.2 Billion page views per month is the same as 5-10 Billion Facebook page views per month. Facebook “only” generates 40 billion page views a month and yet it has a $15 Billion valuation. But the crux of Markus’ argument is that despite having about 33 times the monthly traffic of POF, Facebook’s poor click-through ads should bring the valuation models closer. Markus said that “over 40% of Facebook’s pageviews are image related, ads in bad positions and users just generally looking to waste time.” He said that “there are only a handful of sections on the site [Facebook] that will generate good click thru rates for advertisers.”

So getting down to nitty gritty metrics, Markus concluded that “Facebook is only able to generate 10 to 15 times as many clicks on ads as my site and it’s valued at 15 billion. Needless to say I’m watching ad supported business model valuations very closely.” What’s more, some of his direct competitors – e.g. Eharmony and match.com – are apparently valued in the billions.

Kind of amazing how a cheap-looking site with virtually no overhead, aside from server costs, can be worth billions.

Whether or not you believe in these fishy valuation schemes, it’s still pretty cool, isn’t it?  Here’s a guy who’s only invested in the things his business requires.  Oh, and he’s clearly more focused on ROI than his competitors.

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Comments (10)

  1. The thing that I can’t get past on plenty of fish, is how clunky and ugly the site is. Not to be negative, but it is really bad. Maybe there is a lesson here. I think I’ll go design an ugly site and get rich.

  2. I think the fact that it’s free and that it (apparently) takes no time to register has more to do with its success than the ugly design. But, wow, is that site a beast!

    Doubt we’d advise our clients to forgo web design in hopes of making billions ;)

    Anyway, it probably says more about the online dating market being under-served — over-served? — than anything else. I mean that in the sense that people are asked to fill out exhaustive profiles when some folks (apparently) aren’t that picky!

    Is it just as much a numbers game for the PlentyOfFish online dater is it is for its single owner?

  3. I think this is another good example of sites that focus more on the basic stuff e.g craigslist.org, google, just to name a few. There is always going to be a thin line here where you have to decide to either make the site as simple as these sites or add some graphics to it.
    As long as the sites are solving users problems, I don’t think users will care whether it is a ugly site or not.
    If it is free and solves my problems the way(s) I want it. What do I care?

  4. Plenty of fish is a great example of how small ideas can turn into big ideas, and how people can really make the most of the skills they have when it comes to the web.

    I’ve recently started a free dating site for Australians, and within the first week have over 100 users. So this example is somewhat inspirational, to know that opportunity exists for smart marketing and ability in the world of online dating.

    Plug plug: http://www.1stdate.com.au

    That’s my latest venture, and what led me to read this article.

  5. Simpler ideas may turn into wealthy results

  6. Plentyoffish.com’s success is staggering, it is worth also the same as Eharmony and other players in the market.

  7. I think this will be very helpful thank you.

  8. Oh! Really.

    It’s can make a billion dollar.

  9. Plenty of Fish is the Craigslist of online dating. Both websites are ugly and plain, but are very profitable. If you have a Twitter account follow me at cmccall1987.

  10. Everyone knows that Facebook is way overvalued at $15 billion. They still haven’t found a way to effectively monetize the site, and it’s becoming increasingly unlikely that they ever will. With their current revenu at approximately $300 million per year, it would take over 50 years to simply recoup your investment (figures adjusted for inflation).

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