IAC Continues To Make Big Moves In The Online Dating World

  • Thursday, September 25 2014 @ 07:23 am
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I could say something about how hard IAC/InterActiveCorp is trouncing the competition, but…um… It hardly has any competition. The media conglomerate, helmed by Barry Diller, has been killing it in the online dating realm for years and shows no signs of stopping.

Thanks to its two massive dating sites, Match.com and OkCupid, IAC was already the biggest player in the game when it decided to shake things up last December by creating a special division for its online dating holdings called the Match Group.

This year, IAC has made more powerful strides in its quest to dominate online dating. It increased its majority stake in Tinder, the mobile app at the top of the mobile dating heap, and acquired most of the Brooklyn-based dating site HowAboutWe.

Slowly but surely, IAC has bought its way into the dating market. By the end of 2013, IAC reportedly hosted 30 million active users throughout its dating properties, 3.4 million of whom are paying subscribers. The Match Group is now responsible for approximately one quarter of IAC's total revenue. And they're not shy about singing their own praises.

“We are not just the acquirer of choice,” said Sam Yagan, chief executive of the Match Group, “we are the only acquirer.”

Investors, on the other hand, are a little more wary. Analysts are convinced that online dating's growth is likely to slow, despite the fact that the market has never been stronger in the US or abroad. The primary bump in the road is free mobile dating services, which are making it increasingly difficult for other dating services to generate a profit.

Mobile dating now accounts for around 27% of dating site services. As mobile audiences grow, dating sites are finding it challenging to turn those users into paying members. They are also challenged by a crowded market, which becomes more congested all the time as various niche sites pop up. Although many don't last for long, they're still successful in drawing audiences away from larger, more general dating sites.

With that in mind, IAC’s future may lie in Tinder. So far the app has put growth above revenue, but it is estimated that Tinder could eventually earn $75 million a year. First, the company has to figure out how to monetize it without losing users or slowing growth. Yagan is feeling positive about the future.

“It is not a winner take all dynamic,” he said. “There is a lot of concurrent usage. Unlike a car, the majority of online daters use multiple products, so you want to have a portfolio — a multibranded approach.”