May 30, 2004 IT E-Commerce 53-751-02

Lavalife

By

Youness Derouiche

Wainaina Mwangi

Michael Timofeyev

May 30, 2004 IT E-Commerce 53-751-02

Lavalife

‘We recognize that all human beings have the need to interact. Our history is filled with elaborate courting rituals and traditions. While our society may have changed, our need to be social and to connect with each other hasn't.’

May 30, 2004 IT E-Commerce 53-751-02

Lavalife Origins

• Lavalife Inc. formerly Interactive Media Group (Canada) Limited conceived in 1987, with a number of products based on interactive-voice-response technology, the most

notable being Telepersonals®. • Lavalife became profitable within 5 years

• The company developed core capabilities in interactive-voice-response technology, interface design, real-time transactional billing systems, operational management of 24/7 transactional systems and direct response advertising management.

May 30, 2004 IT E-Commerce 53-751-02

Lavalife Evolution

• The 1990s internet potential to redefine the companionship market identified

• 1996, Lavalife bought the Webpersonals® URL and launched its first-generation web site in 1997

• In the first years the site was free and the company concentrated on building a critical mass of users and on rewriting the product.

• In April 1998, IMG began charging users transactional fees for the use of its web services,

• Launch of next generation launch as www.lavalife.com.

May 30, 2004 IT E-Commerce 53-751-02

Personals/Dating Industry

• Over $917 million dollars a year, according to a study done in November of 2002 by

MarketData • 66% growth since 1998• Online dating segment now accounts for a

third of the total dating services market, estimated by Jupiter Networks to exceed $300 million in 2003

May 30, 2004 IT E-Commerce 53-751-02

Personals/Dating Industry

• The online dating services have been growing at a phenomenal rate - 20% a month

• Personals/Dating is the leading Paid Content web service accounting for nearly 30 percent of all paid content spending

May 30, 2004 IT E-Commerce 53-751-02

Lavalife Present

• Lavalife markets its web and telephone products in over 66 markets across the US, Canada and Australia

• Serves over 700,000 active customers principally in the U.S., Canada, and Australia.

• Lavalife.com had 8.2 million unique visitors in January 2004, ranking 5th globally

• Lavalife has over 6 million unique members who exchange 1.3 million messages every day.

May 30, 2004 IT E-Commerce 53-751-02

Present and Future

• Revenues were CAD $102.6 million • EBITDA was CAD $17.4 million for the fiscal

year ended September 30, 2003 • MemberWorks acquired Lavalife for

approximately CAD $152.5 million in cash. • Lavalife will acquire ClubTread (online

community dedicated to the outdoors) for approximately CAD $15.25 million in cash .

May 30, 2004 IT E-Commerce 53-751-02

Website Presentation

• First page:– Inviting warm colors, “red” for Love and developing

relationships between people

– Introduction image of a group of people from different ethnic origins, personalities and life style.

– Easy and free sign up and registration

– Trusting atmosphere

– Privacy and security policy

– http://www.lavalife.com/

May 30, 2004 IT E-Commerce 53-751-02

Website Presentation

• After registration– Enables to build your own profile

– Enables to add pictures and videos to the profile

– Unlimited browsing and search by categories

– One can choose three types of interactions• Dating

• Relationship

• Intimate encounters.

Each of these corresponds to people’s wants and needs http://www.lavalife.com/118/member/ll.act;jsessionid=DA368E05FA25F3B5FA191F2953A627CB.118

May 30, 2004 IT E-Commerce 53-751-02

Business Model

• C2C oriented website– Low setup cost– No inventory, non-perishable product– Builds a huge database based on free subscriptions– Fees are only needed in order to

• Send an (instant) message• View backstage pictures or videos

– The product is a service that connects people– Wide range of “products”– Affiliate programs that save money on advertising

May 30, 2004 IT E-Commerce 53-751-02

C2C

• Critical mass of buyers and sellers exchanging “goods” and “services”

• Discovery of rare and specialized goods

• Trust management

• “Price” discovery

May 30, 2004 IT E-Commerce 53-751-02

Focal point

• Gives people one common place to offer themselves and search for others

• Sellers profiles have to be approved by the management (QA)

May 30, 2004 IT E-Commerce 53-751-02

Discovery of rare goods

• For some date is a rare “good”

• “Buyers” and “Sellers”- very fine line

• Easier to advertise yourself and search for a specific profile

• People are much more open to offer or show certain things without seeing the other party face-to-face

May 30, 2004 IT E-Commerce 53-751-02

Trust Management

• No private information is disclosed

• Non-threatening way of meeting strangers

• Members are able to block those they do not wish to communicate with or report abuses

May 30, 2004 IT E-Commerce 53-751-02

Price discovery

• Can you put a price on a “date” or “love”? Apparently so…

• Allows to compare prices with similar services– Match.com– QuestPersonals.com– Eroticy.com

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Value to company

• Wider geographical outreach

• Exposure to larger group of potential customers (e.g Hotmail users)

• Easy way of promoting new services

• Building close relationship with customers by offering safe and easy-to-use service

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Value to customer

• Variety of choice• Customization upon login based on the profile• Safe way to meet strangers• Enables better screening based on images and

videos• Unlimited geographical scope• Several easy payment options • Secure transactions

May 30, 2004 IT E-Commerce 53-751-02

Value to customer (Con’d)

• “Emotional” benefits– Easier to make initial contact

– E-rejection does not hurt as much

– Can take time to think of actually a smart thing to say

– Self esteem building (khe-khe)

• Great way to waste time and bandwidth