Milestones

Zoosk just filed for IPO last month, but already the hype is huge. Upon the announcement of its plans to go public, Zoosk was dubbed ‘the Netflix of dating’ by the media and investor interest shot through the roof.

The "dating services" industry was valued at $2.1 billion in annual revenue by IBISWorld in September 2013. 68.7% of that figure comes from online and mobile dating services. IBISWorld predicts that the market as a whole will grow by 5% over the course of the next four years. The biggest players in the industry are names that are familiar to everyone, whether or not they have ever used the services: Match.com, OkCupid, eHarmony.

Zoosk may be smaller, but it’s no slouch. The online dating platform has over 26 million members, including approximately 650,000 subscribers across 80 countries. Zoosk’s membership grew from 18 million in 2012 to its current numbers, while the number of paying subscribers over the same period grew from 483,000 to 650,000. The company anticipates continued revenue growth based on its unique business model that’s similar to Netflix or Pandora.

What Zoosk has in common with those two Internet giants is its complex proprietary behavioral matchmaking engine. The technology analyzes your behavior on the site – from who you click yes on to who you linger on a little longer before saying no – to get to know you better (possibly even better than you know yourself). By tracking your actions on the website and evaluating your preferences based on it, Zoosk hopes to be able to anticipate your love life's every need, in the same way that Pandora guesses what kind of music you’ll like and Netflix suggests movies it thinks you should watch.

Of course, the stakes are a little higher when you can't just press pause or hit a skip button when you're not satisfied with the choice. Still, Zoosk is thriving. At the end of 2013, it was the highest grossing dating app and one of the top 25 highest grossing iPhone apps of the year. With a 2.9% market share, according to the IBISWorld report, Zoosk is one of the biggest players in the game.

That being said, Zoosk is not profitable. The company posted net losses of $2.6 million last year and admitted that it “may not achieve or sustain profitability in the future" in its S-1 filing with the SEC. For the future, if the IPO is to be successful (and the company as a whole), Zoosk will need to increase brand awareness via public relations, social media, and advertising. Zoosk must also create an effective system for retaining users and continue to expand its presence on mobile.

For more on this dating service you can read our Zoosk review.

This week’s round of congratulatory applause goes to Zoosk, which just filed its S-1 registration statement with the SEC and announced its plans to raise $100 million in an initial public offering.

The company will trade on the New York Stock Exchange under the symbol ZSK, with Merrill Lynch, Pierce, Fenner & Smith, and Citigroup Global Markets underwriting the IPO. Oppenheimer & Co. and William Blair will also be joining as co-managers.

As part of its filing, Zoosk provided details of its global online dating business.  The company states that the website now has 26 million members across 80 countries, including 650,000 subscribers (users who pay for access to additional features and products). The company also states that its user base grew from 18 million at the end of the year in 2012 to its current numbers, a 44% growth rate. The number of paying subscribers grew to 650,000 in 2013 from 483,000 in December 2012.

As those subscriber numbers have grown, so too has revenue. Revenue increased 63% from 2012 to 2013, rising from $109.1 million to $178.2 million. Net loss also decreased drastically during that period, from $20.7 million in 2012 to just $2.6 million at the end of 2013. Subscriptions account for much of that revenue ($153.8 million), but Zoosk also has a rapidly growing virtual currency business that jumped from $5.4 million in revenue in 2012 to $24.3 million a year later.

On top of that, Zoosk has raised more than $60 million since being founded in 2007. Investors include Crosslink Capital, Keating Capital, Canaan Partners, Bessemer Ventures, ATA Ventures, Jeff Epstein, Plug & Play Ventures, and Amidzad Partners.

While it started out on the web, Zoosk has been hugely successful in the mobile arena. In the Apple App Store it's the #1 grossing dating app and a top 25 grossing app overall. Much of that success can be chalked up to the site's proprietary Behavioral Matchmaking engine, which learns from a user's clicks, messages and other actions to produce more compatible matches. The better the data it gathers, the better its recommendations get.

Looking to the future, Zoosk knows the biggest challenges it will face. The service must optimize its strategy for retaining current members as well as its approach to attracting new members and subscribers. Zoosk must find a way to retain high levels of user engagement and subscription rates and, most importantly, must continue honing its Behavioral Matchmaking engine in order to connect users with mutual attraction.

To find out more about this service you can read our review of Zoosk.

If anyone knows how to crack the code of online dating it’s Greg Liberman. Liberman has been president and CEO of Spark Networks since 2004, giving him more insight into the industry than almost anyone else in the biz. He spoke with The Forward in early February about the tremendous success of JDate, the Internet’s most popular Jewish dating service.

Liberman chalks the company’s success up to one simple thing: “this company was built out of a need.” And not just any need – one specific person's need. One of the founders had recently been divorced and was looking to expand his social circle of single Jewish women. Out of that quest, JDate grew organically.

Once the site had gotten its start, it set itself apart from the competition by creating a strong culturally focused community. “Religion is obviously at the core,” says Liberman, “but the majority of the members are Conservative and Reform and interested in a more culturally based identity.” The site provided a meeting place for Jewish singles who wanted to continue the traditions they were raised with, but weren't interested in a heavy emphasis on faith.

When asked how things have changed over the course of JDate’s history, Liberman nominates mobile dating as the decade’s biggest innovation. Mobile is becoming an increasingly important part of our lives, and that includes our love lives. “We saw in 2013 a 114% increase in log-ins via mobile,” Liberman says of JDate. “People are connected all the time, and for us it’s really important. I mean, it’s a huge opportunity for us to continue to drive our mission.”

Mobile isn’t the only change in store for JDate. The site announced the launch of a new marketing campaign on Valentine’s Day 2014 that further stresses the “J” half of its name. The rebranding initiative – JDate’s first – is called “Get Chosen.” Liberman hopes that it will help strengthen the Jewish community and ensure that Jewish traditions are passed on for generations to come. He calls it a “fun, living, breathing campaign” designed to “remind Jewish singles of the cultural ties, not just the religious ones, that make dating, and ultimately marrying, someone else who is Jewish so special.”

The multi-platform campaign will begin immediately across various channels, including print, digital and social. In addition to adding the tagline “Get Chosen” to the logo, JDate revealed a new homepage design for the website. The company also plans to run digital billboards in New York’s Times Square and a street sign campaign throughout Chicago. Other creative elements, including television and web videos to support the “Get Chosen” theme, will roll out later this year.

Zoosk's domination of the online dating scene isn't ending any time soon. The online dating site, which first rose to popularity by making romantic links between Facebook users, is preparing to create an important connection of its own - with investors in public markets.

Zoosk was founded in 2007 by Iranian entrepreneurs Alex Mehr and Shayan Zadeh, who met as students at Tehran's Sharif University of Technology. They moved to the U.S. in 2000 and launched the company seven years later. Zoosk acquired users quickly by tying itself to Facebook and the hundreds of millions of users who already used the ubiquitous social networking site to post personal information and photos. It's since branched out to mobile, the most rapidly-growing sector of the dating market, and has raised more than $60 million from investors including ATA Ventures, Canaan Partners, Bessemer Venture Partners and Crosslink Capital.

Zoosk is now taking steps to go public in 2014. The San Francisco-based company has picked Bank of America to lead its initial public offering, along with Citigroup and Royal Bank of Canada. Oppenheimer & Co. and William Blair & Co. will serve as co-managers.

In the $2.1 billion dating services business, Zoosk has a 2.9 percent market share, trailing behind Match.com and eHarmony in the competitive industry. Zoosk currently has more than 40 million active members, a success rate that can be attributed in part to the additional features the site offers. The challenge faced by most online dating sites is that, if their service is successful, their users have no reason to continue using it. Forward-thinking companies like Zoosk are counteracting that problem by offering other social features - like sending relevant discounts to couples or making date suggestions - to keep users coming back.

The approach is working. Close to 4,000 businesses compete in the dating services market, according to IBISWorld, yet despite that heavy competition, Zoosk said in May that its first-quarter revenue topped $40 million and that visitors to the website more than doubled from the prior year.

There's no question about Zoosk's impressive track record, but there are some questions about the success of these kinds of sites' attempts to go public. Following Facebook's troubled IPO in May 2012, there was a lull in social-networking deals. But Twitter Inc.'s debut last month seems to have put some people's fears to rest, and Twitter is now up 89% from its IPO price. Whose footsteps Zoosk follows in remains to be seen.

HowAboutWe is about to take over the world - literally.

The dating service has announced the launch of the first internationalized versions of its iOS application. Though the web-based version of HowAboutWe already had international users, the app was only available in English, significantly limiting its reach. Now it's available in 15 new languages that cover more than 30 countries, including France, Russia, and Japan.

And it gets even better. The company says it's also making all features in the mobile application available for free to international users. (Sorry, America, you still have to pay. Premium features for United States-based users, like unlimited membership, will continue to cost between $8 and $35 per month.) In addition to full access to all of the exclusive features offered to American HowAboutWe members, global users will also enjoy:

• Browsing date ideas suggested by local singles
• Finding people who want to meet in person
• Checking out profiles and full-screen photos
• Posting their favorite nearby places as date ideas - instantly
• Seeing who's online now, nearby

When asked why the company was choosing to offer services entirely for free, HowAboutWe's head of PR, Jade Clark, explained that their primary concern is to extend their reach as a brand and become an established figure in a new market before weighing monetization options.

HowAboutWe isn't just planning to bring its emphasis on real-world activities to the international stage. Half a million members are signed up for HowAboutWe for Couples. When asked about mobile and international plans for the couple's product, Clark adds that the company is working to expand their mobile offerings and plans to make some major announcements in the early parts of 2014.

To celebrate the launch of the app around the world, co-founder and co-CEO Aaron Schildkrout posted a guide to his blog called "10 Things You Need To Know Before Internationalizing Your App." I'll spare you the details, because many of them are quite technical, but Schildkrout did speak of the challenges that come from language barriers and different cultural expectations. His final piece of advice is something we can all understand, regardless of your location: "It will always take 3x longer than you think!"

I'm intrigued by this new development. Just think of all the opportunities for cross-cultural connections that might now be possible. Imagine being an American tourist in a foreign land, connecting with locals (and possible tour guides) using the same dating app you're already familiar with. It could add a whole new dimension to travel.

For more on this service you can read our HowAboutWe review

It seems that the desire for online dating has reached even the most religiously conservative societies. According to The Jerusalem Post, the Palestinian Authority's Supreme Council has legalized online dating, but with a catch. Daters must abide by Shari'a rules, which means communication between members must be with the intent to marry.

Though Islamic scholars have dismissed online dating in the past, the council stated that the mingling of men and women online was now "a central characteristic of our time" and "unavoidable." This opens the door for many Muslims to date outside their social circles and provides more opportunity for meeting people than ever before.

Islamic dating websites have emerged in recent years, modeling themselves after other popular religious dating sites like JDate. But many Islamists, including Palestinians, already converse freely over social networks like Facebook and Twitter, according to The Times of Israel. It seems that allowing online dating was the obvious next step.