That being said, I'm not sure where he's going with this. In many ways this seems like the beginning of the end for him. Granted, he knows his industry better than I do, but here's my take:
1. He runs a free service, at huge profit margins. His competitors all run paid services.
2. The likelihood that people would view paid dating as a luxury they can no longer afford is higher than ever.
3. He's worried about "hundreds of millions of dollars" that he's missing out on - that's usually a recipe for disaster.
If anything, I think he should stay as static as possible. The odds that much of the paid traffic from his competitors comes his way in the next little bit is extremely high. Moving to a paid site destroys the only competitive advantage he has. It's suicide.
I've seen this move before with other entrepreneurs, and I've never really seen success from it. What it usually symbolizes is that the particular niche has reached its potential, and no real innovation is required at this point. The founder is basically getting bored, and looking for new challenges. What needs to happen though is that the entrepreneur him/herself needs to leave/end the business. You can't evolve into new markets and bring your business with you without destroying the comfortable fit that your brand already has in the marketplace.
From my 2 cents, he should be looking for buyers, not trying to become one.