Sites referenced:

http://www.moneycontrol.com/india/news/pressnews/juxtconsultshaadicom/shaadicomadjudg/market/stocks/article/271619 

www.shaadi.com

Shaadi.com is the number one matrimonial website in the world. A quick look at the website reveals it has recently won a spate of titles, including most user friendly matrimonial website in India, the subject of the article posted. Shaadi.com has capitalized on the role of the matchmaker in arranging in Indian weddings with its access to over 9 million users worldwide, one of the world’s largest matrimonial databases. How did Shaadi.com become so successful? By getting into the market early and capitalizing on a network effect. As they state on their website, “the number of members is directly proportionate to your chances of finding the person you are seeking.” As more people join, the worth of a Shaadi.com membership increases, and people put a higher premium on having a Shaadi.com membership, leading to higher potential profit margins and an exponential increase in membership. To get past the initial tipping point in getting people to purchase a membership in the first place, Shaadi.com allows users a limited profile and messaging opportunities for free with the idea that if you find someone you like, you can upgrade your membership in order to find out more about them and possibly even chat online with them. This strategy appears to be effective; Shaadi.com is enormously profitable, so obviously this limited trial version has convinced enough people to purchase a membership to get past the tipping point. However, this strategy could backfire. Having too many people with limited free profiles will cause congestion; these people are essentially freeloaders benefiting from the positive externalities of the network, being able to browse the full profiles of paying members without paying themselves. Since freeloaders neither interact with others to form matches nor pay membership fees, they clutter the system and lessen the efficacy of the matchmaking system, which will eventually discourage people from joining. If too many freeloaders amass, the site will cease to be profitable. In the meantime, however, Shaadi.com is doing well with 723,549 successful matches and counting.