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Whether it’s romance or finance, the key to a winning relationship is the potential for growth. And whether it comes from the heart or the wallet, a significant investment is made in every relationship.

No one understands this better than online dating-solutions provider SNAP Interactive Inc. (OTC BB: STVI). After starting out as a stand-alone online dating website, the New York-based company quickly transformed itself into a developer of online applications for social-networking websites like Facebook, MySpace, hi5, and Bebo.

This strategy has been immensely successful for SNAP, allowing the company to combine its unique applications with the vast library of each site’s user base. It’s been a match made in heaven ever since.

“The beautiful thing is that we’ve developed an online dating model that works very well on the social networks,” says CEO Cliff Lerner, who co-founded SNAP with his brother, Darrell Lerner. “People are engaged; they come back over and over. As these new opportunities open up, we can duplicate what we’ve created. There are many other large social networks that we haven’t begun to leverage. We have a product that works and will [bring] incremental users and revenues.”

Incorporated in 2004 as eTwine Holdings Inc., the company operated a stand-alone dating site called IamFreeTonight.com. After recognizing the potential within surging social-networking sites, the company adopted a strategy to benefit from that trend. In May 2007, SNAP launched the first of its online dating applications, which includes brands like “Are You Interested,” “Meet New People,” and “Flirt With Me.” The company now boasts more than 17 million installations of its application on various social-networking sites.

“Online dating sites haven’t evolved much,” Cliff Lerner says. “They’re static sites with searchable databases of people, and you haven’t really seen any creativity or evolvement of features. But if you’re able to build an appealing application for these social-networking sites, there are many viral channels that you can leverage. You can gain significant traction quickly.”

This strategy has allowed the company to become profitable quickly. Despite focusing primarily on growing its user base early on, SNAP has been able to generate considerable revenue and profit growth year-over-year.

In fact, the company turned in its best results yet, nearly tripling quarter-over-quarter profits in the third quarter. For the quarter, SNAP reported net income of $410,283, or 4 cents per share, compared to net income of $144,862, or a penny per share, in the second quarter. On an annualized basis, that represents a P/E ratio of around 2.8, using its recently closed trading price of $0.45. To put that in perspective, the P/E ratio of the S&P in 2007 was 16.8.

Revenue, which is generated primarily through advertising sales, grew to $871,324 in the third quarter from $533,257 in the previous quarter.

“Including our Q3, we’ve increased revenue each of the past five quarters, and a large part of that is because we don’t have substantial marketing expenses,” Darrell Lerner says. “For a company like ours, marketing is often a large expense. We’ve been able to build a substantial member base quickly and inexpensively. We run a pretty lean ship, and that’s allowed us to generate quite a bit of revenue and get to profitability early.”

Establishing critical mass is a vital achievement for SNAP because one of the main factors that attract new users to online dating destinations is its large user base. A site with more users presents a larger pool of potential connections.

“That’s the positive thing about our position right now,” Cliff Lerner says. “When it comes to the online dating business, the most important thing is critical mass. We’ve built a large user base, and all our competitors have pretty much fallen off the map due to the lack of critical mass while we keep growing.”

Another wrinkle that SNAP benefits from is the networking aspect from sites like Facebook and MySpace. Where a stand-alone website has to invest in establishing its own network of users, SNAP Interactive has the ability to take advantage of networks that have already been created.

“Something that’s very appealing about the social networks is that when you think about stand-alone dating sites, one thing they don’t integrate is access to your friends,” Cliff Lerner says. “However, we have the ability where people can browse their friends and say who they want to date. This is a unique concept and something that’s appealing for users. That’s one of the reasons why our applications have become so successful.”

One trend helping SNAP is the widening gap between online traffic to social-networking sites like Facebook, which grew 84% over the past year in the United States alone, according to traffic analytic site compete.com. Stand-alone online dating sites like Match.com and AmericanSingles.com were down 35% and 68%, respectively, from the previous year.

“When Facebook and MySpace opened up, a lot of the stand-alone dating sites started to suffer some declines in their traffic, revenues, and income for the first time,” Cliff Lerner says. “There’s really not much incentive for users to do their dating on the stand-alone sites anymore. If we’re able to offer the same feature set, we’re taking traffic from these sites. And a very good thing for us, fortunately, is that these social networks continue to grow at an astounding rate.”

The company is also planning to implement new premium features intended to provide additional revenue streams. SNAP is especially excited about the potential in mobile devices like the iPhone and BlackBerry. “One of the strengths of our company, and it’s evidenced by the quick shift that we made to Facebook last year, is our ability to react, move quickly, and capitalize on new opportunities,” Darrell Lerner says. “This is a brand-new industry that’s evolving, and we’re keeping ourselves in a position to take advantage of the different opportunities that emerge on a daily basis.”

The company has managed to achieve all this despite focusing on maintaining a lean operation. However, with its critical mass in place and its proven core strategy, SNAP Interactive is strategically positioned to maximize its potential for growth.

“Right now, we’re growing at over 20,000 net installations per day,” Cliff Lerner says. “And the future looks even brighter. We’re growing nicely as it is, and there are opportunities for a lot more growth. We’ve just begun to attack resources at monetizing our applications. That’s what you saw in the third-quarter growth, and we think there’s a lot more we can do.”