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Adult dating sites such as adultmatchmaker.com.au allow people to find sexual partners without the "moral difficulties" of visiting a brothel, said analysts IBISWorld.
"Internet sites promoting sexual rendezvous between strangers with no exchange of funds have seen strong growth in recent years," said IBISWorld general manager Jason Baker.
"These negate the need to pay for sexual gratification and sidestep many of the moral difficulties posed by soliciting prostitutes, making them a popular alternative."
But while the industry's traditional customers – young men – were spending more time hooking up online, Mr Baker said the number of female clients was set to grow.
"Given the increasingly sexual liberalisation of society, and particularly the sexual freedom of women, we anticipate the female customer segment will grow," he said.
"We predict an increase in the number of women not only paying for sexual services, but visiting strip clubs and accessing sexual material via the telephone, internet, pay TV and DVD."
High-end escort agencies were expected to be buffered from the impact of online dating, as they offereda more glamourous alternativethaninternet sites.
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