[wschroter]

Agreed. Part of what I'm wondering is how viable the venture model is when the amount of revenue a category can generate gets quickly reduced from a free competitor that can operate at a fraction of the cost.

That's why I mentioned PlentOfFish. Probably not the best example, but if they are doing $10m as one of the leaders in the category, that doesn't spell a great future for others in the classified dating model. There are only so many of those major categories (like jobs, autos, dating) available.

The other trend is that advertising just doesn't pay the bills, even in mass amounts. I'm familiar with a handful of private companies that are doing millions of uniques per month and can't even pay a modest staff and support cost to stay afloat. The idea in the past was that with enough traffic the ad dollars would pay for free, but even that's not entirely working.