February 12, 2004
Desperately Seeking Soulmates
The most successful matchmakers in the Jewish community don't want to talk romance.
His own romance "happened so long ago, there is really not much to say about it," Alon Carmel, the co-founder, of JDate.com, the largest Jewish online personals site, tells The Journal when asked for some personal tips of the romance trade.
Carmel's business partner, Joe Shapira, is even less inspiring.
"I have been on JDate," he said. "Every woman I contacted rejected me."
The fact that romance know-how isn't their strong suit just shows how much finding love in the Jewish community -- and in the wider world -- has changed with the advent of the Internet. No longer are matchmakers the hunchbacked yentas who finagled Tevye's daughters to marry someone who was "tall from side to side."
Now matchmakers are men like Carmel, an Israeli ex-pat who wears a cell phone on a necklace with a jaunty and annoying ring and commands an office on Wilshire Boulevard that has floor-to-ceiling windows, panoramic views of Los Angeles, sectional couches and a signed picture of President Bush.
Carmel is a calm man, and unlike "Fiddler's" meddling Yenta, he doesn't need to wheedle anyone into trying his product like he did in the old days, when JDate first started and he begged his friends to post their profiles as a favor to him. Now he concentrates on IPOs and increasing market share, growing the business while he lets the software interface do all that "romance" work for him. The modern day matchmaker is a laissez faire businessman who lets people find their own loves through his site.
And while JDate recently took over JCupid (its biggest American competitor) and Cupidon (JCupid's million-strong Israeli site), Carmel's business style is less corporate barracuda and more casual Friday, where millions of dollars can be made without anyone needing to shed their Abercrombie running outfit for a three-piece and tie.
"He's not very formal," said Adam Kravitz, general counsel to Matchnet PLC, JDate's parent company. "He's very Israeli in that way. He is very relaxed and friendly, very personable one to one, and a very good negotiator."
SO What's love got to do with it? Not much. It's like this weekend's overmarketed Valentine's Day , which is an opportunity for flower/chocolate/diamond sellers to market their goods. For JDate, it's an opportunity to hold parties in cities across the United States from Bethesda, Md., ($10); to Denver, Colo. ($20); to Los Angeles, Boston and New York ($25). (Parties, events and travel contributed $469,678 to total revenue -- or 2 percent of Matchnet's entire revenue of $25 million.)
For men like Carmel, matchmaking and romance have gone multinational and high tech. Instead of paying the matchmaker a fee or musing about love in the time of Pentium processors, you might want to think about getting in on the action and purchasing some stock options in an online personals company.
While there are more singles now than ever before -- U.S. census statistics show that people are getting married later, getting divorced faster and more are choosing to live alone -- there are also more people looking for someone to connect to, emotionally or physically or, preferably, both.
Even though the dot-com bubble has burst, and Americans are suffering from romance fatigue (according to a recent New York Times article), millions of Americans still visit online dating sites every month. According to Comscore networks, a site that tracks consumer behavior on the Internet, in the past two years spending for online dating sites has increased more than 500 percent, making online sites some of the most valuable Internet real estate on the web.
The Jewish community, too, has been affected by the paradoxical culture of fewer people getting married, more people looking for love. The National Jewish Population Survey of 2000-2001 found that Jews are getting married later in life than the majority of Americans, but that doesn't mean they aren't actively looking for love, and sites like JDate provide an outlet for those looking for Jewish hookups, Jewish relationships and Jewish marriages.
Since its inception six years ago in the crowded sea of dating Web sites, JDate has cornered the market and become the largest and most popular Jewish site on the web. While news sites like the Jerusalem Post's gets 55,000 unique visitors a month, JDate receives 247,000, according to Comscore networks. Among Jewish dating sites -- such as JMatch, JSingles, JQS, Frumster to name a few (see sidebar) -- JDate, with more than half a million members is the largest. By comparison, JMatch says it has 150,000 members; Frumster, an Orthodox-only site, has 11,000.
JDate is also the only site that is so part of the millennial Jewish zeitgeist, that not only has posting a profile on it become a rite of passage of sorts for most single Jews, but it has practically spawned its own lexicon. JDate is used as a noun, to describe not just the site, but also the type of date that results from the site ("he went on a JDate last night); a verb ("I'm so sick of JDating every night of the week"); even an adjective that describes a date that is like many others ("she was nice, but the whole experience was very JDate"). Most Jews know someone who dated someone they met on the site, and have heard of people who married from the site.
In other words, JDate has morphed from a Web site into a Jewish phenomenon, and it has made Carmel into a big businessman.
Alon Carmel's life didn't start out with much promise 48 years ago. His father died while his mother was pregnant with him. She struggled to raise him and his older brother in Haifa, but couldn't. When he was 5, she sent him to an orphanage, called, ironically, considering his later JDate career, "Mosad Ahava," an institution of love.
Far from being traumatized by the move, Carmel remembers the period with fondness.
"It was wonderful. I had a great social life there. Everybody was nice especially the kids. It was a good place," he said.
When he was 10, he went to live on a kibbutz, and three years later, he moved back in with his mother.
"We were the poorest family possible. We ate meat only on holidays," the millionaire said.
Carmel joined the Israeli army and then got a degree at the Technion in civil engineering, but he never worked in the field. "It was not my desire to be an engineer, not my personality. I always knew that I was going to be an entrepreneur."
He came to Los Angeles in 1981 -- without a plan. "I came here, my English wasn't so good, I didn't know many people. I met an old friend who was in school together with me. He was a supervisor on the construction site and he got me a job there. The first day I came to work, they said, 'Here is the broom, here is the shovel, now go clean.' I was making $3.25 an hour. It wasn't enough, so I had to valet park at night."
Working at L'Orangerie whetted his appetite for a finer life.
Having no money forced Carmel to work around-the-clock, and it also provided him with the seed to make his first $100 million. He worked on construction in the morning, in the afternoon he volunteered as a gofer with a real estate broker, and in the evening he parked cars.
"I offered my services for free so that I could learn the real estate business. I was busy and happy," he said.
By the late 1980s he had accumulated close to 1,000 apartments and was making a lot of money. By the early 1990s, he had more than $100 million in real estate equity, which he lost when the bottom fell out of the real estate market. Carmel went bankrupt and had to sell his house.
"I was extremely depressed," he said. "But my wife was very supportive of me," he said, referring to the woman he married in 1984 but prefers not to discuss.
The low was also the start of the current high. At around the time he went bankrupt, Carmel met Shapira, the man he now calls "his better half." The two started a video manufacturing business that they sold in 1996. In 1997, Shapira got divorced and was considering signing up with Great Expectation, a dating service where people pay more than $1,000 to make a video of themselves that is shown to other members.
"We were sitting at lunch and Joe was telling me about the Internet and he was saying that [Great Expectations] should be online, not offline," Carmel said. "I didn't have a computer then. He went home and he logged onto his computer and found that there were 100 Jewish dating sites, and 3,000 dating sites at the time. We said 'So there will be 3,001.'"
Carmel and Shapira then started researching and developing their business model, aiming to make a site that was more user-friendly and sophisticated than the other sites.
The issue, though, was naming the site. JDate got its name through a fortuitous accident of slim pickings.
"Everybody had taken all the possible names," Carmel said. "AOL had bought the name Jewish, everybody else got all the other names. The only name left was JDate, and we were really unhappy about it. We thought, 'God, how are we going to market a name like that?'"
They ended up marketing it through search engines and small newspaper ads. They provided 24-hour customer service for people who had trouble figuring out how to post their profiles, with Shapira doing a lot of the customer service himself, and Carmel increasing his computer literacy by having his son teach him how to crop and post photographs. Word of mouth about the site started to spread, and the number of members who signed up in the first year (about 10,000) doubled, then tripled, then quadrupled and then started multiplying so fast to the point that JDate now says they have "thousands joining each day."
"It wasn't like we were a company," Carmel recalled. "We were part of the community, part of the social setting."
Being part of the community or, more accurately, creating its own community, meant that JDate started making a lot of money. Matchnet PLC is now a public company traded on the Frankfurt Exchange (because the initial investors in the company came from Germany), and a possible NASDAQ offering is being planned for later this year. It did more than $25 million in revenue last year -- the projected revenue for 2004 is $40 million, of which they hope $15 million will be profit. Matchnet has 10 subsidiary companies, including Americansingles.com, which according to Nielsen/Net ratings is the third-largest personals site; glimpse.com, a gay and lesbian relationship site; and collegeluv.com, a site aimed at college students. In the first nine months of 2003, more than 5 million new members joined Matchnet sites.
Carmel loves what he does. It's a constant refrain in interviews: He has a dream job, he feels like the luckiest person on earth, he loves what he does.
For Carmel, an observant Jew, JDate is more than just a business. It's a mission. "Alon has a personal attachment to JDate," said Kravitz, Matchnet's general counsel. Although the company has grown to 138 employees, Carmel strives to engender a family atmosphere, and is friendly and approachable.
Carmel believes JDate is the high-tech antidote to intermarriage. And with openings planned in Spanish, French and Portuguese, Carmel thinks JDate can be a community unifier that brings Jews of all creeds, colors and languages together.
"The short term is to bring all Jews around the world into one place, one big happy place," Carmel said. "When we have 1 or 2 million Jews on our site, I don't know what can happen. But we can deliver. We are inventing the future."
That future includes a recent change in the business model of Internet dating. Like many Internet sites which started out providing services cheaply or for free and later started charging, JDate recently changed its business model. Originally, posting a profile on the site was free, as was reading messages received from other members; the only people who had to pay were those who wanted to initiate contact with other members. Last summer, JDate began to charge its members to both send and receive e-mail on the site, and to access a mailbox there.
While anecdotal evidence suggests that this change has soured a number of existing members from using the site because they do not want to pay, it is hard to figure out the effect it has had on JDate and the Internet community at large. Carmel will not disclose individual JDate figures, but will only say that 27 percent more people have subscribed to all Matchnet sites since they implemented the new policy. (That's about 170,514 total subscribers out of 16 million across the board.) Carmel asserts the reason for charging more people was not just a business decision: he did it to make the JDate community more active.
"I hope that nobody expects [his or her] love life to be free," he said. "A lot of those who posted their profiles for free actually did not answer e-mails. They felt that they were above the rest. Once you pay, you start to respect the other side. The business has to be profitable, but [this new system] also allows us to weed out the fly-by-night and uninterested and unserious members of the site."
Carmel said that recent changes are not unlike changes they had made in the beginning. "The first year it was for free, and we had around 10,000 or 20,000 users. In those days of the Internet everything was free. When we started charging a few people dropped off, but only a few."
Six years ago, who could have known that this weirdly named Web site would become so profitable?
"I did everything I could to keep JDate alive for the first three years," Carmel said. "It was impossible. I sold everything we had, we sold almost any asset, and even the ones that we didn't have. We borrowed from family and friends to keep it up," he said.
Who could have known 48 years ago that this boy from an Israeli orphanage would become one of America's most successful and richest matchmakers?
"JDate happened not because we were really smart," Carmel said, "but because it was meant to be."