Online Dating

Image: Newsweek

In today's highly competitive business environment, companies are constantly fighting for consumers’ attention and loyalty. Those that manage to secure it set themselves on a path to market domination and financial success. Those that cannot face an uphill battle. Though we’re used to hearing that “the customer is always right,” the reality is that not every company lives by that credo.

Few industries are more competitive today than the online dating industry. From the major players of Match Group and Spark Networks to countless hopeful startups, dating services around the world are locked in a fierce feud to become the go-to matchmaker of tech-savvy singles.

IAC has announced its plan to spin off its most profitable company, Match Group, to create “two independent public companies,” according to a company statement.

Match Group is a publicly traded company and owns a suite of star dating apps like Tinder, PlentyofFish, Hinge and OkCupid among others, but IAC is still Match Group’s majority owner (with 80 percent of Match Group’s holdings). According to Tech Crunch, when the spin-off occurs, IAC says it would distribute its Match Group shares to IAC stockholders, which means IAC shareholders would have shares in both companies.

The move would allow Match Group to become a fully separate, independent company.

Badoo and Mel B Partners with a Podcast

Badoo is the latest dating service to venture into the world of podcasting with a new show that takes an honest look at the highs and lows of modern romance. “The Truth Flirts” is an eight-episode series hosted by Melanie Brown, aka Mel B or the Spice Girl formerly known as Scary.

Speaking to the British newspaper The Independent, Brown revealed that she doesn’t currently use dating apps because she is “perfectly happily single” but that she finds the concept “fascinating.”

“I was on a dating app a couple of years ago but that was because my friend set my profile up as a joke,” she said. “It was a picture of me and my friend and I would scroll through it on a Thursday or Friday night and see how people reacted. It was fun at the time. I understand why people find it quite addictive.”

Dating app Tinder introduced its new interactive series Swipe Night in early October, hoping to attract young users with compelling content. As it turns out, it may also help lagging user engagement, and give users a reason to stay on the app.

Tinder is parent company Match Group’s star app, and the company has seen incredible growth in both users and revenue. Tinder’s active daily users grew 3.1 percent year-over-year for Android users, from 1.114 million to 1.149 million according to data from SimilarWeb, and installs grew 1 percent.

Bumble founder Whitney Wolfe Herd has secured a 4 million pound dividend payout from parent company Magic Lab, who saw record earnings thanks to its star dating app.

According to The Telegraph, the Bumble windfall is the result of a dividend payout of 20 million pounds from its parent company, and Herd owns about 20% of Bumble. Magic Lab saw earnings skyrocket at the end of 2018 to about 270 million pounds, up 51 percent from the year before. This quarter, the company reported a loss of about 4.8 million pounds.

Bumble’s revenue made up about 48 percent of Magic Lab’s overall business.

How Couples have met from 1940 to 2017

Image: Spark Networks

Despite completing a $255 million acquisition of Zoosk in July, and becoming the second-largest online dating company in North America by revenue, Spark Networks has struggled this year. Shares of Spark have lost more than a third of their value thus far in 2019 and over 50 percent since the deal to acquire Zoosk closed on July 1. To address its poor stock market performance, Spark Networks has released an open letter to its shareholders.

The letter expresses disappointment at the company’s falling stock price and suggests that the losses were primarily due to “concentrated share sales by a minority of our shareholder base,” not the result of under-performance. Spark Networks speculates that the shareholders in question were primarily early stage investors in Zoosk and Affinitas who were looking for liquidity after 10 years.

Spark Networks explains in part their optimism, by pointing to recent studies that shows that the online dating industry continues to grow in leaps and bounds. In 2010 online dating was responsible for 20% of how couples met. By 2013 it had past "met through friends", and by 2017, had reached 39% with no signs of slowing down.