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Strategy report
To: Proximity social networking team From: Lucas Gruber Date: October 3, 2009 Subject: eHarmony Strategy Report

This memo highlights the business strategies of eHarmony and compares it to other players in the online dating industry. We should also be able to determine the implications on Gen Y. Neil Warren founded eHarmony in 2000 in Pasadena, CA. Warren, who worked as a psychologist and marriage counselor for 35 years, used his knowledge to develop a model of compatibility that is now the basis of eHarmony’s match making service. eHarmony successfully matches men and women with singles of the opposite sex. With 20 million users, a successful match is very probable. On average, 236 eHarmony members marry every day, accounting for 2% of U.S. marriages (eHarmony).
 * Profile **

eHarmony was one of the first online dating websites, and its main focus is to connect its users based on compatibility. The rigorous 436 point questionnaire determines compatibility with other users based on things such as intellect, character, values, humor, spiritual beliefs, etc. Warren believed that people are very complex so the website should provide more than the stereotypical picture and short blurb, found on conventional dating services.

eHarmony has revenues of almost $200 million annually. The cost to the user is just $59 a month or $251 for a full year. For this fee the user gets to take advantage of eHarmony’s sophisticated match making algorithms. On average, 15,000 users register their answers to the questionnaire daily (Kirkpatrick).


 * Competitive Landscape**

The online dating industry is huge; $228 million is spent by users for online dating services. Most people feel that they should be looking for a soul mate and the fact that online there are many more options, drives this industry. Among this industry are many sites:
 * match.com
 * directdating.com
 * matchmaker.com
 * friendfinder.com

eHarmony does not allow the user to search its database for potential matches. The extensive questionnaire that Harmony uses makes for a much better experience than the competition. For example, it doesn’t make women feel like they are being judged on their photograph. eHarmony also utilizes TV advertising unlike its competition and has proved successful. eHarmony’s compatibility model has made this company’s service a niche site well into 2004 (Gabbay).


 * Business Strategy**

eHarmony’s business strategy is suited for people looking for marriage or serious relationships. Two financial benefits come from this:
 * Finding a soul mate versus a date provides for value to the user allowing eHarmony to charge more ($50/month versus $20/month)
 * eHarmony is able to do what other dating sites cannot and that is to make money from women instead of men. Almost 60% of their paying users are women where for most of the competition the opposite is true (Gabbay).

The company took 18 months to gain its first 100,000 users. In the second year, the company could finally start to generate real success stories and they made there way into mainstream media.


 * Gen Y Implications**

Online dating has grown among young people because of Gen Y’s large social networking scene (Facebook, MySpace, Friendster). In 2007 eHarmony lowered the membership age from 21 to 18. Gen Y is used to having the world at their fingertips and is more demanding of a good match. And so, today’s 18 – 22 year olds are far more likely to look for love online than previous generations were (Bennett).

The younger generation is not generally looking for a soul mate or someone to marry. The dating scene for younger people does not match eHarmony’s business strategy. This will all change in the future as Gen Y begins to frequently look for love online. eHarmony will become very appealing. For a generation hooked on instant gratification, eHarmony has not reached its climax and does not have a challenge ahead of itself because the younger generation is the primary candidate for online dating.


 * References**

(n.d.). eHarmony. Retrieved from [|http://eharmony.com]

Kirkpatrick, David (2007, September 14). eHarmony does what tech ought to do. Fortune, Retrieved from [] Gabbay, Nisan (2006, December 10). eHarmony Case Study: Offline advertising the key to scale.StartupReview, Retrieved from []

Bennett, Laura (2009, June 24). Dating from the dorm room. Retrieved from []

Blog proposal
TO: Proximity social networking team FROM: Lucas Gruber SUBJECT: Blog post proposal DATE: Oct. 26 2009

I propose that our blog post cover the topic of business marketing in the form of Social Networking. This post will give our clients information on a new approach to Social Networking.


 * Rationale**

Analysts have been talking about how Social Networking will be transformed into a new Business Networking platform in 2009. In today's economy, everybody from small businesses to major corporations have been cutting back on their advertising budgets and moving towards Social Networking as the next phenomenon in business marketing.

Networkers United Worldwide (www.nuworldwide.com) is a brand new community of social business networkers that are exchanging tips and ideas, educating, and promoting on a local and global basis.


 * Sources**

I recommend that we organize the post around [|Social Networking Takes on New Approaches by Dr. Cindy Gordon]. She is the CEO and Founder of Helix Commerce International Inc and goes into much detail about Networkers United Worldwide. I have found more information highlighting Networkers United Worldwide as well.

[|http://www.nuworldwide.com/]

[|http://helixcommerce.blogspot.com/2009/02/social-networking-takes-on-new.html]

Report proposal
TO: Proximity Social Networking Team FROM: Lucas Gruber DATE: November 20, 2009 SUBJECT: Proposal for report on eHarmony

eHarmony has dominated the online heterosexual dating market. Now they are expanding their niche site and launching a site dedicated to same-sex relationships. I propose to write a report on how eharmony is positioning itself to completely take over the dating market with its new same-sex relationship service.


 * Need**

e  Harmony, the top online dating service is finally expanding its services to include all types of relationships. This all stems from a discrimination case against the company. > > >
 * The successful compatibility system will now be used to match those of the same-sex.
 * Homosexuals will not be discriminated against.
 * Many sites already offer a same-sex match making service. Compatiblepartners.net must find a way to separate itself from the rest.
 * Users of compatiblepartners.net must not feel like they made a copy of the original site just to please a smaller market.

The creation of a site dedicated for same-sex relationships that uses the same compatibility model is going to have a hard time catering to gay men and women.

The new role that eHarmony is trying to fill with its new same-sex website is not going to go unnoticed, however, it will have a hard time gathering a positive reputation if they do not put forth the resources that the original eHarmony service received. Gen-Y consumers need this report to understand how online dating services are changing.


 * Topics**

The proposed report, “eHarmony’s Wider Commercial Appeal”, will cover the following topics: Houran, J. (2008). Eharmony - niche service or a business that discriminates?. // Online Dating Magazine //, Retrieved from http://www.onlinedatingmagazine.com/columns/2008editorials/eharmonylawsuit.html
 * Will eHarmony be able to maintain a competitive advantage in the market?
 * How eHarmony will try to build a new niche site at compatiblepartners.net
 * How eHarmony will market their new site compared to their old site.
 * So urces**

Houran discusses the interesting changes eHarmony has made in that a new same-sex matching website is being developed. He poses the question; Was eHarmony discriminating or providing a niche service?

Sales letter and report prospectus
Mrs. Tarahlton, Director of Marketing The Maxell Corporation Dear Beth:

I enjoyed talking with you the other day at Proximity’s Next Generation Media seminar regarding Maxell’s need to promote its brand to Gen Y consumers. Enclosed you will find a prospectus for the report I mentioned describing the new strategy to tackle the problem of unsuccessful advertising on social networks.

As you noted yesterday, Maxell feels that it must establish brand identity with Gen Y now in order to sell its products in the future as blu-ray and flash memory become more important. I believe Proximity can work with you to devise a comprehensive campaign that uses targeted advertising as well as individual creativity to get the brand into places never thought possible.

We will be able to use uVizz (a video sharing platform) for user-generated advertising and brand promotion on social networks. uVizz offers advertisers a unique, cost-effective model that rewards their online communities for creating and sharing content. Our faculty consultants can advise your sales force on how to plan the campaign and launch it on uVizz with ease while receiving the best results. Maxell will eventually be all over MySpace, Facebook and Twitter and as an advertiser, you will be able to sit back and watch as the brand promotion spreads.

I invite you and your staff to join us at Proximity’s Towson office for a special focus group session on Maxell’s Gen Y brand image. After that session, you can meet with members of our group to discuss how Proximity can help you meet your marketing goals.

Sincerely, Lucas Gruber Associate Media Analyst

enclosure

 //connecting with Gen Y using targeted social network advertising// ||^  || Lucas Gruber //Targeted advertising will take the waste out of current irrelevant social network advertising// ||
 * **//PROXIMITY//** **//reports//** || [[image:http://docs.google.com/File?id=dgc69xmq_6f3hpqh2n_b]] ||
 * **Social Networking: The Advertising Problem**
 * **//__The p__//****//__roblem__//**

It’s no secret that social networks are struggling to generate advertising revenue. There are articles and blog posts published daily that give the numbers. The social network advertising problem comes from the inability to give the user advertisements that are relevant to what the user is doing and are therefore ignored.

|| The solution is uVizz. Advertisers create campaigns and then choose how much they’ll pay someone to create a video and refer it to a friend. Ads are created by the users. Video quality doesn’t matter, its all about the message. The ads then spread across the network and those who created the ad get compensated when the ad is viewed. || **A****vailable now at www.****proximity.****edu**
 * **//__Proximity’s on-demand media solution__//**