Plenty of Fish CEO Markus Frind, famous nerd hero for making over $10 million a year from Google ads on a free dating site he made and ran all by himself, now sees a problem with the free model:
The problem with free is that every time you double the size of your database the cost of maintaining the site grows 6 fold. I really underestimated how much resources it would take, I have one database table now that exceeds 3 billion records. The bigger you get as a free site the less money you make per visit and the more it costs to service a visit...There is really no money in being free and we have to start experimenting with other models now or we won’t be able to compete in 3 or 4 years.
As one commenter succinctly put it: the “golden time” of AdSense is over. Time to look at costs. The POF architecture is to run scarily huge tables on single machines. They also buy and maintain their own SAN. So it seems scaling up is what is increasing costs and decreasing profits. I wonder if the economics of cloud storage and cloud architectures might have a more linear cost curve?