AOL Launches Love.com Online Dating Service

The new service, Love.com (www.love.com), is being built on the AOL Instant Messenger service, which already has 50 million users. It will compete with longstanding online dating services like Match.com, which lets users communicate by traditional e-mail.

Love.com is initially being offered at no cost, but AOL, the Internet unit of media conglomerate Time Warner Inc. <TWX.N>, said it will begin charging by Valentine's Day.

The service is expected to add immediately to earnings once fees are charged, a company executive said.

"They're gunning after the big guys," said David Card, vice president of Jupiter Research.

AOL has found it difficult to churn out profits despite its membership size. AOL Instant Messenger, or AIM, launched as a separate service to its flagship online service in 1997.

Love.com is the second consumer business initiative from AOL, following the debut in September of an online games service feature, that is also played over the instant messaging service. AOL declined to disclose specifics about the service.

Love.com will require users to register and create a user profile on a separate Web site. The profiles will be linked to a user's instant message identity, allowing Love.com members to send and receive messages without revealing their real identity.

But while AOL aims to get the lovelorn to eventually pay for Love.com, industry analysts said AOL faces tough competition from entrenched incumbents, most notably Match.com, which has 12 million registered members and close to a million paying customers.

"To get people to pay for (Love.com) will be challenging," Card said.

AOL also faces a new category of competitors, online "social networking" services like Friendster that have stoked the interest of Silicon Valley venture capitalists Kleiner Perkins Caufield & Byers and Benchmark Capital.

Friendster lets users connect with other members through a web of known contacts, in an homage to the notion of six degrees of separation. That idea and its explosive growth of users helped rake in $13 million in financing in October.

LOVE ON THE ROCKS?

AOL could also be competing against itself in a sense. It currently has a long term partnership deal with Match.com, owned by media mogul Barry Diller's InterActiveCorp <IACI.O>.

Match.com currently programs AOL's relationships channel on the online service.

Michael Osterman of Osterman Research, which tracks the instant messaging industry. said it was unlikely AOL would run afoul of its lucrative deal with Match.com.

Match.com President Tim Sullivan agreed. "It has no impact on our deal with AOL," he said, adding that AOL was one of the largest contributor to new members for its service. "We expect our business with AOL to continue to be very very important to them and important to us as well."

An AOL spokesman said Love.com will not be advertised on the AOL service.

For now, a more pressing concern clouds its launch, said analysts.

"Flirting in a real-time anonymous conversation mode is well established," Card said. "But usually you can do it for free."