That's not the whole story. Plentyoffish is highly profitable. Why not other social networks? Because they have a less-effective ad model but think they can spend like a search engine.

A lot of people (whether or not they "get" Web2.0) have unreasonable expectations for demographic and behavioral targeting of ads. When you advertise on Google you are targeting not only a specific word, not only a specific person who is interested in that specific word, but right at the moment they are looking for it.

For this reason I believe search advertising will always be an order of magnitude more effective than demo-targeting, and at least a few times better than the loftiest pipe-dreams of behavioral targeting.

So. Your ad model is 0.1X as lucrative as search advertising, yet your infrastructure costs are comparable to a search engine. You lose. PoF wins because Markus doesn't have 100 employees.