Perfect Match has more than 4 million users and is the second-largest player in the relationship space, though it's nearly 10 million shy of eHarmony's numbers, and luring potential customers is the hardest part of the game.

Typical methods of attracting members are e-mail, direct mail, banner ads, and expensive media such as TV and radio.

EHarmony got an infusion of $110 million in cash from Sequoia Investment and Technology Crossover Ventures two years ago, and spent a reported $50 million in 2004 and $80 million in 2005 to create a slew of now-recognizable eHarmony TV spots.

"It's very expensive to go out and do big TV or radio buys as eHarmony did," said Dahl, whose company spent less than $15 million on advertising last year. "They got a bunch of cash and carpet-bombed the airwaves, and that's not something everyone can afford."

Rocky times

For eHarmony, the challenges don't stop there. For one thing, there's been management turnover lately.

Waldorf, one of the founding investors in the company, stepped in as permanent CEO in November. He had taken the position in an interim capacity earlier in the year when former Chief Executive Jaynie Studenmund resigned just weeks after assuming the role in February.

Co-founder Greg Forgatch had stepped down as chief executive in January to "pursue other interests," but he maintained his position on the board. Forgatch's father-in-law, author Dr. Neil Clark Warren, is the other co-founder and highly recognizable from his role as the face of eHarmony in TV ads.

"The candidates coming forward were some good people, but at that point I had already been doing it for six months, so it was an easy decision for me to stay," Waldorf said. "It is a difficult job. This is a much larger company than most private companies; we are the largest venture-backed private company in California."

In addition, eHarmony intentionally cuts out some potential clients.

It doesn't do same-sex matches, which knocks out about 15 percent of the online dating market. And as a "relationship" broker, it does not seek customers who are looking for a fast hook up. At least 16 percent of those who fill out the site's initial 436-question survey are rejected because they are considered poor marriage prospects. That includes individuals who are under 21 years of age, twice divorced, people with depression, those seen as impossible to please and those who the system believes are lying. Also, the site doesn't initially allow users to see photos of one another.

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