Match

Steve Harvey has been dishing out dating advice to women quite successfully over the years, because he knows what it was like to be a man playing around without really wanting to commit. His book Act Like a Lady, Think Like a Man, was a best-seller among the hundreds of dating advice books to hit the market. Now, he’s teamed up with Match.com to create a dating site called “Delightful” that competes directly with marriage-minded sites like eHarmony.

"Women want to date with the goal that it turns into a relationship," Harvey told The Chicago Tribune in a recent article. "It kind of breaks my heart when I have women on my show who've been on 50, 100 dates. Something's not right if you have to go out with 100 people."

This comment made me wonder - has Steve Harvey actually tried online dating? Tinder? Most of us have been on at least 50 dates, if not more. I don’t think there’s something wrong with people dating in those numbers, because there are so many opportunities now to meet people.

But I do agree that most daters don’t really invest in getting to know the person sitting in front of them on any given date. There are too many options to be that committal, so they typically move fast. Steve Harvey’s comment rings true when we consider how much time we invest with such little return. I write about this in my book Date Expectations.

Website Delightful aims to change those statistics, with a little help from Harvey. Sam Yagan, CEO of the Match Group, said in a statement, "To take [Steve’s] power and his outlook on relationships and his views on love and combine that with the technology and algorithms that we know to work creates a powerful new category." In other words, the celebrity factor is key in the marketing of the new site.

Others have tried this before. Take the host of The Bachelor Chris Harrison, who last year launched a video-based dating app called At First Sight, hoping to capitalize on his celebrity. It hasn’t quite taken off like Tinder, despite its appealing premise of seeing a short video of potential dates, rather than just viewing photos.

Harvey and Match expect their approach to be different. After all, Harvey is a dating advice coach with his own TV show, and has helped many women find lasting relationships. He is an expert, not just a celebrity.

"We're going to help women get themselves out of the hunting game," Harvey said. "And we're going to make a concerted effort to get men on here who are looking more seriously for a relationship instead of just dating a lot of people."

As for how they will compete with successful marriage-minded sites like eHarmony, Yagan is a little unclear. Instead, he compares Delightful to OkCupid and Tinder, which are known more for their hook-up appeal, saying that at the end of the day when people want relationships, they will look to Delightful instead.

After teaching women to Act Like a Lady, Think Like a Man, Steve Harvey is gearing up for a new crusade to “help women become more dateable.”

Anyone else cringing, or is that just me?

It’s not that the man hasn’t had plenty of successful ideas. He’s made it as a comic, a talk show presenter, a game show host, and the author of two relationship advice books, so he must be doing something right. But if that mission statement doesn’t immediately raise a red flag, you’re not reading it correctly.

Here’s the deal: Harvey has launched a dating website, Delightful.com, as a joint venture with IAC (the company that owns Match.com, OkCupid, Tinder, and a slew of niche dating services). In addition to being the face of the site, he will supply articles and videos to help subscribers “find love and keep it.” So far so good.

But then you get to the philosophy behind the site, which Harvey kindly shared with Forbes recently.

“Women are wired differently,” he says. Online dating is great for people who want to go on a lot of dates - which means it’s good for men in Harvey’s mind, because only men are interested in playing the field. “A man doesn’t have any problem at all dating several or a wide variety of people until he finds the right one,” he says.

On the other hand, “women don’t really want to just date,” explains Harvey. “They want to date with the hope that it leads to a relationship.” And the reason is simple: “A lot of women have that biological clock that ticks in them.”

He’s not the first to say so. And undoubtedly, in some cases, he’s right. But it’s also a painfully problematic approach to 21st century dating. Just when you thought we were moving away from ideas that divide the sexes, here comes every “women are from Venus, men are from Mars” cliché that’s been ruining things so far.

Harvey goes on to say that women are too picky when it comes to dating, and that Delightful will include advice columns for women on important topics like “how to become more datable.” For men, Delightful will offer “instructionals on being the kind of man who knows how to treat a woman.” At no point does it appear Delightful will explain that it takes two people to make a relationship work, and that men and women need to learn to meet each other halfway for relationships to survive.

And what does Match CEO Sam Yagan have to say about Harvey’s prehistoric approach to modern romance?

“It’s not like we’re standing behind everything he’s ever said.” Well ok then.

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.”

A recent report of Tinder’s financial worth shows that its users aren’t going away anytime soon. The massively popular dating app is poised to increase its value and market share further over the next year. According to Market Watch, Tinder is growing at such a rate that Barclays predicts its valuation will reach $1.1 billion by the end of 2015, adding to IAC’s current $5.68 billion market cap. IAC owns many of the most popular dating sites, including Match.com.

What makes its value so high, considering the app is free for download? The answer is in the sheer number of users who download the app. As with most online dating sites, perception is key: the more users a site has, the more people will gravitate to it because they think their chances of getting a date, relationship or even hook-up increase.

Tinder’s popularity has taken off thanks to younger daters who embraced the mobile technology and liken Tinder to a game that is easy and fun to use. Plus, it has taken the stigma that is part of online dating away, because the app is mainly to support single people meeting each other casually as opposed to those looking to find serious relationships.

Tinder’s popularity is not just PR buzz. Its growth in the past year has been explosive, with 750 million swipes per day reported in February of 2014, up from 5 million in December of 2013. Today, it manages more than a billion swipes per day (resulting in 12 million matches each day). According to Market Watch, Barclays expects Tinder global daily active users to reach 20 million by April, or 40 million on a monthly active user basis. It also expects Tinder to generate as much as $180 million in revenue in 2015.

How Tinder will get this kind of revenue is unclear. Lately though, they have been floating a few ideas, including a “freemium” service where basic use of the app is still free but restrictions are in place that can be lifted for a fee - like the number of matches you get, or how many photos you see, or the ability to communicate. The founders don’t want to advertise on the app, but they are open to partnerships that would generate revenue from “real world behavior,” though they don’t define what that looks like. They are also focused on the age of Tinder users, and how they might evolve in their dating preferences as they get older. Right now, Tinder is mostly a product that young people use, especially teens and young twenty-somethings - those who might later graduate to a more serious pay service like Match.com.

Eyeballs are currency however, at least to investors, who see Tinder as a golden opportunity. For more on this dating app you can read our review of Tinder.

It’s no secret that eHarmony and Match.com are old rivals in the online dating space. Match.com has been building its empire through its parent company IAC, which has bought several successful dating sites and apps, including Tinder. eHarmony has remained focused on its technology and matching success, and has expanded to include matchmaking services for VIP clients who are willing to pay. In December, eHarmony plans to launch a new career-matching site as well.

Now it seems despite the different directions the companies are going, they still remain fierce competitors, especially when it comes to marketing and attracting new users. eHarmony recently ran a “#1” campaign, citing its success in making more long-term matches than any other online dating website. The problem is, without concrete numbers from all sites, it’s a little tough to prove. At least, according to the National Advertising Division (NAD), an investigative unit of the advertising industry’s system of self-regulation. The unit is administered by the Council of Better Business Bureaus.

This week, the National Advertising Division (NAD) recommended that eHarmony discontinue using certain “#1” advertising claims for the company’s dating website, including “#1 Most Marriages,” “#1 Most Enduring Marriages,” and “#1 Most Satisfying Marriages.” It seems that Match.com was the first to ask the regulators to look into the matter.

NAD reviewed claims made by eHarmony in broadcast, print and Internet advertising, following a challenge by Match.com, LLC. Match claims that this is advertising is misleading, as the numbers of marriages produced by both sites is extremely close. Also, eHarmony didn’t take into consideration Match’s entire network of sites co-branded under different names. This makes Match.com’s numbers much larger, and perhaps greater than eHarmony’s.

NAD concluded that, although the number of marriages that should have been attributed to Match could not be pinpointed, the actual difference between the number of individuals within the sample who met their spouse on eHarmony versus Match.com was even smaller than reported by eHarmony’s survey, or possibly favored Match.

In addition, eHarmony claimed its study was independent, although its co-authors included a former director of eHarmony Laboratories and a scientific advisor to eHarmony. When NAD informed the company of their findings, eHarmony agreed it would no longer describe the study as “independent.”

eHarmony, in its advertiser’s statement, said the company “respectfully disagrees with much of NAD’s analysis of our specific advertising claims.  However, because eHarmony values the NAD process and appreciates the NAD’s efforts, we will take NAD’s recommendations into consideration in our future advertising.”

IAC fell slightly short of expectations in Q2 2014, but nevertheless had a solid second quarter.

Subscribers are up where IAC's dating sites are concerned, but revenue dropped in its Search & Applications unit. Match Group revenue increased 8%, as paid dating subscribers grew 10% to 3.5 million globally.

The Media segment fell 36% to $36.7 million, due primarily to the closure of the Newsweek print business and the sale of its digital business. However, video site Vimeo increased revenue over 45% and reached nearly 500,000 paid subscribers. Websites revenue also increased 1% and page views grew 8% to 8.5 billion.

Search & Applications was the weak link in the chain for Q2 2014. Revenue declined 7%, enough that it could not be offset by growth elsewhere. On the whole, consolidated revenue declined 5% year-over-year. Consolidated Adjusted EBITDA dropped 10% compared to the previous year. Total revenue for Q2 2014 is $756.3 million, down from $799.4 million in Q2 2013 and below the $796.6 million consensus estimate of analysts consulted by Thompson Reuters.

Looking to the future, IAC will push forward with its new marketing campaign for Match and plans to put a renewed focus on native mobile apps. IAC will also acquire the Princeton Review, an in-person tutoring service that publishes college rankings, via its online-only tutoring firm Tutor.com. And then there’s one thing that gets more attention than any other: Tinder.

IAC says it intends to monetize the popular dating app this year, and stands to make quite a hefty sum. Greg Blatt, chairman of IAC’s Match Group unit, said recently that Tinder has the potential to generate as much as $75 million a year in earnings (before interest, taxes, depreciation and amortization).

“It’s growing like a weed,” Blatt said, but earning money from Tinder is still “a work in progress in terms of exact manner and timing.” Several monetization possibilities are available to IAC at this point. Back in April, IAC chairman Barry Diller said three approaches are currently under consideration:

• Subscription
• Advertising
• Freemium (which offers basic access for free and charges for additional services)

Tinder certainly isn’t hurting for opportunities, so at this point any direction seems like a real possibility. “I have been developing online businesses for quite a while now,” Diller claims, “since the Internet started. I have never had the number of people banging through our doors to see if we would sell them a little piece of Tinder.”

So far it hasn’t happened, but don’t think he doesn’t have something up his sleeve. “We have got lots of little areas marked for revenue,” Diller said. “You bleed into them over time.”

For more on these 2 dating services you can read our reviews of Tinder and Match.com.