Making money off of matchmaking on Facebook

Can Facebook-funded Thread take a piece of the billion-dollar online dating business?

Playing matchmaker online can be a lucrative business. Hundreds of dating sites are raking in a total of a $1 billion dollars each year, with popular sites, like Match.com, eHarmony, Yahoo Personals and Plenty of Fish, taking the lion's share. But there's always room for newcomers who design a different offering for today's generation.

One such newcomer is Thread, whose co-founder and CEO Brian Phillips would describe his rationale for starting the online dating site that leverages Facebook like this: "Not everyone is on dating site... But the best people are all on Facebook." See my first interview with Brian, in which he explains how Thread works as an online dating site on top of Facebook.

In this second part of our two-segment interview, Brian and I discuss how Thread plans to make money and get to profitability. Brian estimates that it'll take the company 18 months to reach cash-flow positive with the $1.2 million recently raised from Sequoia Capital, Founders Fund, First Round Capital, and high-profile angels, such as Ron Conway and Reid Hoffman. 

Most dating sites charge members over $50 monthly, and offer psychological reports, or analysis on chemistry vs. compatibility, etc. to make members feel as though they're getting more than just access to people - they're learning more about who they should be matched with.

On Thread, there's none of that matchmaking magic, at least not yet. Thread plans to let Facebook friends do the matchmaking. The premium products Thread is thinking about include:

- Paying to see who viewed your profile (something LinkedIn charges for)

- Paying for A/B testing to see which photo received the most clicks

- Paying for a glass of virtual wine to a new interest

- A cheaper subscription service

- Paying for endorsement badges (i.e., if I endorsed Brian as my top 5 eligible bachelors, he can have a badge on his profile reflecting that)

How do you think Thread should make money?