This post was written by guest contributor Mark Brooks, an analyst/consultant whose blog Online Personals Watch summarizes the daily internet dating industry news.

In the internet dating space, bigger is not always best. According to the latest U.S. numbers from Hitwise, the top niche dating sites are steadily gaining market share while their big mainstream counterparts stagnate.

We compared the overall dating market share of the top 5 sites – Singlesnet, Plentyoffish, TRUE, Yahoo Personals and Match – to the market share of several top niche sites to see how their growth rates compared. In March 2008, the top 5 overall sites held 7% less market share than they did one year ago (Plentyoffish and Singlesnet were the only sites to buck this trend individually). Meanwhile, the top sites from the top five major niche dating categories made considerable gains, with the gay dating and religious dating categories growing the fastest.

It’s apparent that a growing proportion of users is looking for more focused experiences with those who share particular interests and desires; this despite the fact that users can find more fish in the proverbial sea at mainstream sites.

The particular interests mainly relate to sexual preferences, races, and religions. Top sites include Adam4Adam, Manhunt, Gay.com for homosexuals; BlackPeopleMeet, BlackSingles, BlackChristianPeopleMeet for African Americans; and ChristianMingle, JDate, and Christian Café for the religiously-oriented.

Another top niche – and the biggest niche in terms of total traffic – is casual dating, which consists of sites like Fling, AdultFriendFinder, and SexSearch. Although I’m not sure casual dating can really be called a niche. As Adam Small, CMO of SexSearch has put it bluntly: “Our target market is anyone over the age of 21 who is interested in sex, which is almost everybody.”

Casual (or “adult”) dating sites are the antithesis of eHarmony and are definitely not focused on helping people find long-term relationships. Instead, they help the more “casually inclined” to find the people who fit their specific physical and sexual preferences. Very specific preferences in some cases.

These casual sites have shown solid gains in the internet market as a whole. While the top 10 mainstream dating sites gained only 0.01% of total Internet traffic over the past year, the top three casual adult sites gained 0.07%. That’s a hefty 56% increase in the traffic to adult dating sites, although it’s important to remember that smaller sites have an easier time showing big gains in their traffic.

Disclosure: Brooks has worked for FriendFinder and has advised Manhunt. Plentyoffish is presently a client of Courtland Brooks, his consultancy.

When it comes to connecting with new friends safely and privately, Jangl fits the bill. The “Social Communications Widget” lets you make calls, send SMSs, and leave voice mails without exposing anyone’s phone number through a simple widget.

In contrast to their competitor, Jaxtr, they’ve been mainly spreading through a series of direct deals with social networking sites (Match.com, Tagged, AdultFriendFinder, and Fubar) and a Facebook/Bebo application (potentially on 80 million profiles). Jaxtr, on the other hand, has been spreading mainly through email links and personal websites (5 million users in under 5 months).

Now they’ve forged a deal to be featured on the maverick of dating sites, PlentyOfFish. PlentyOfFish is like every other dating site you’ve heard of, but free. Free has actually paid off pretty well for founder Markus Frind, who runs the site from his Vancouver apartment and takes in over $10 million a year in advertising.

Comscore ranked the site the number one dating site in December 2007, with an average of 1.3 billion page views a month (70,000 sessions and 3 million page views an hour).

Jangl’s widget will let daters call each other, send SMSs, and leave voice mails all without sharing a real number. The functionality makes it easy to take the next step in a relationship without sacrificing privacy, or just discreet phone sex. Calls will be terminated on Jajah’s servers as part of their existing relationship. Like PlentyOfFish itself, Jangl will be monetizing the service through text advertising; a first for the company. On other sites, the service is either ad-free or paid for as part of membership (match.com).

I’ve found social calling widgets (particularly Jaxtr and Jangl) to be the most attractive part of the VOIP market because they’re not competing in a race to the lowest calling rates, but adding real utility to our existing phone lines. Other voice widgets include Ccube, Tringme, and Snapvine. While monetization is still somewhat up in the air, both companies are testing out business models (paid Jaxtr minutes, or Jangl’s revenue sharing). Going forward we’ll see which models do and don’t work. I also expect both companies to continue adopting more advanced features similar to Google’s GrandCentral.

Online dating is big business, drawing about 4 million U.S. Internet users daily in June 2006 (and 25 million monthly), and they spend a daily average of nearly 17 minutes each on these sites. That adds up to a lot of page views – almost 4.5 billion per month (source: Comscore). And that doesn’t take into account the billion-a-day Myspace page views, which many people argue is basically a very large dating site. All told, at least 15% of U.S. Internet users visit an online dating site each month.

The two largest dating sites are Yahoo Personals and Match.com, respectively, with a combined 9.3 million monthly visitors. Both allow free browsing, but to communicate with other members you must pay a fee. Match.com charges $30/month for the basic plan; Yahoo’s fee is $25/month. Both sites also offer premium plans that attempt to help you find a compatible mate.

An entire batch of next generation dating sites have emerged that are starting to nip at the established players. One, PlentyofFish, launched in 2003 and has over half a million monthly U.S. visitors. Recently, even Google has entered the space through their Google Base product.

One big difference is that these sites are (mostly) free, making revenue from ad sales alone. But many of these sites are also experimenting with new ways to introduce people who may be a good match. More on each below.

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