The excuses for not sharing revenue seem disingenuous. Nothing was stopping them from just writing fat profit sharing checks every month. Perhaps that's not an ideal way of creating a sense of ownership, but it certainly aligns interests well. The guys developing the site would lose money if they messed anything up and make more if they did well. Much of the financial world operates on this type of model.

As for the change in direction, why not just start a new site and promote the heck out of it on HOTorNOT? Something like what Evan Williams did with Odeo/Twitter. That seems like the truly risky and adventurous path.

Risky for the employees, but the founders are already wealthy enough that taking the risk probably doesn't bother them much.

Those guys are well-known in The Valley and there's a lot of eyes on anything they do. They'd be risking their reputation as successful entrepreneurs. Staying with their successful site is a way of preventing total failure. Playing it safe.

The article makes reference to the fact that once a dating site becomes free, you don't have to scan user content for contact info any more. I think this is a buried lede; free sites aren't just paid sites with lower costs, they have different (and sometimes better) characteristics than their paid counterparts:

1.) Easier to signup - no need to force users to drag out their credit cards

2.) Enhanced anonymity - no need to tie an account to a real person

3.) Simpler operation - the site owner doesn't have to worry that the users are ripping him off/subverting his business model

4.) Lower expectations - how much can a user complain if he's getting something for free?

"no need to tie an account to a real person"

So now fat girls that pretend they are thin models to get dates is a feature?:)