Finances

Anupam Mittal, Founder and CEO of Shaadi.com, has stepped down from his role as CEO of the company. According to reports, he will now focus on Shaadi's corporate developments, new businesses, and international expansions. Gourav Rakshit, former chief operating officer, will take over Mittal's role as CEO of Shaadi.com.

“Day to day responsibilities will now move to Gourav, while I still continue to guide the company with a focus on corporate development and acquisitions,” said Mittal.

Rakshit, who has already been looking after day to day operations of the venture, will take on full responsibility for Shaadi.com. He is an MBA alumnus of IIM-Ahmedabad who has held various positions at Shaadi since October 2007. Previously, he worked at Infosys, Planetasia, and Nestle.

The change comes after a few major moves in Mittal's world. His People Group, which includes app store Mobango and mobile media firm Mauj, merged its property listing portal Makaan with online property broker Proptiger for an undisclosed sum. Makaan continues to operate as an independent entity following the deal.

In January this year, People Group acquired a 25% stake in dating app Thrill, which merged with People Group's dating website Fropper.com.

People Group hopes its next big move will be a new round of funding for Shaadi. The company is looking for at least $100 million to finance its expansion plans.

In preparation, Shaadi has hired Aditya Save, former head of Marico's global centre of excellence for digital and media, to replace Abhishek Maloo as chief marketing officer. Maloo will join Mittal in the corporate development team.

Finally, Shaadi has brought on Ketan Doshi as chief technology officer. Doshi is an IIT-Bombay and Stanford graduate, as well as the former director of product development at BMC Software. Both Save and Doshi will report to Rakshit.

Mittal started Shaadi.com in 1996 before forming People Group to look at other opportunities in the technology arena. He is an active angel investor who has contributed to over 60 startups. According to reports, Shaadi has made over 3.2 million matches as of 2013.

IAC is no doubt a leader in the dating market, with such prominent online dating brands as Match.com, Tinder, and OkCupid, which make up a company subsidiary called The Match Group.

The Match Group has announced its plans to launch its first IPO, making the company available for investment dollars from the general public. Match.com has long been a cash cow in the online dating industry with its paid subscription service, and Tinder with its new premium paid service has been reported to be worth about $1 billion by the end of the year. In fact, the combined revenues of all the companies in The Match Group accounted for nearly one third of IAC's overall revenue in the most recent quarter. They're also growing rapidly, surging 13% year-over-year in the most recent quarter to about $239 million.

Greg Blatt, Chairman of The Match Group said in a statement: "The Match Group is poised for substantial growth in the coming years. The dating industry has come a long way since its inception, but the category remains underpenetrated.  We believe the combination of our more established businesses such as Match, Meetic, and OurTime, and earlier stage businesses such as Tinder and OkCupid, creates an attractive combination of significant cash flow generation, strong margins and meaningful growth potential.” 

This comes at a good time, as Zoosk recently pulled its plans to launch an IPO, leaving the dating space wide open for potential investors. Ashley Madison, a dating site for infidelity, was quick to throw its hat in the ring, too. They are planning a second attempt at an IPO for later this year after a forfeited attempt in 2011.

The Match Group joins other prominent and publicly traded online dating services, notably Spark Networks, which owns several niche dating sites such as JDate, Christian Mingle, and BlackSingles.com, as well as Jiayuan.com, the largest online dating site in China.

After the IPO, investors will be able to buy stock in the company, although the ticker symbol is not yet known. Notably, IAC made the decision to split The Match Group from its parent company to do the IPO.

Barry Diller, IAC’s Chairman and Senior Executive said in a statement: "As many know from our actions over the last 20 years, I'm not a believer in simply agglomerating assets in perpetuity.  I've long felt that as entities grow into size and maturity it's healthy to give them separation and independence from a mother church.”

Spark Networks – owner of ChristianMingle.com, JDate.com, BlackSingles.com, and more – has released financial results for the first quarter of 2015.

Revenue in the first quarter of 2015 was $13.5 million, a decrease of 19% compared to the year ago period and a 5% decrease from the prior quarter. The decrease was primarily driven by a 25% drop in average paying subscribers, particularly in the Christian Networks segment.

Direct marketing expenses in the first quarter of 2015 were $6.1 million, a decrease of 47% compared to the year ago period and an 18% increase compared to the prior quarter. Much of the decrease resulted from a new marketing strategy for Christian Networks.

Dating website Plenty of Fish (POF) has been making headlines recently for its longevity and user milestones, as well as its recent disclosure of financial information about the company. But thanks to the new anti-spam law in Canada, POF now has an unwanted headline that they have to deal with - the popular dating website has been ordered to pay $48,000 in fines for its email practices.

Canadians complained of Plenty of Fish’s marketing tactics, which launched an investigation by the Canadian Radio-television and Telecommunications Commission (CRTC) and the Competition Bureau into the company’s practices. Specifically, the agencies examined how the company handles commercial emails to subscribers.

According to the disgruntled users, POF sent them commercial messages without a noticeable “opt out” or “unsubscribe” feature. One of the key requirements in the law is that each commercial email contain an unsubscribe mechanism to allow recipients to opt-out at any time. Also, according to the wording of the law, the unsubscribe feature has to be prominently displayed and “readily performed.”

Plenty of Fish agreed to paying a $48,000 penalty and developing a new compliance program to address its problematic email practices. The compliance program will include training and education for staff, as well as corporate policies and procedures regarding email marketing.

The new anti-spam law has been in effect since last year, but the Canadian agencies have had their challenges in enforcing it because of how vast and pervasive the problem of spamming seems to be. Millions of spam emails are sent every day by spammers from all over the world. Experts argued that the Canadian Radio-television and Telecommunications Commission (CRTC) and the Competition Bureau were not equipped to handle such a pervasive issue.

The agencies however, are proving the critics wrong. The Competition Bureau recently alleged that rental car companies Budget and Avis engaged in false and misleading advertising when they failed to disclose numerous additional fees as part of their car rental promotions, including their email promotions. The Bureau is seeking $30 million in fines and reimbursement to customers. And the CRTC discovered that Compu-Finder, a Quebec-based corporate training company, sent commercial emails without consent and like POF, without proper unsubscribe mechanisms. The company was hit with a $1.1 million penalty.

CRTC notes in a press release that POF did not argue with the fine or the accusation, and hopes that by example, other companies will be inspired to change their own email spamming tactics. As for POF, the company continues to grow its subscriber base despite its setbacks, recently announcing its user base has grown to 100 million worldwide.

Back in December of 2014 Zoosk abandoned their IPO and hired a new CEO Kelly Steckelberg. This month she did an interview with Fortune in which she discussed the future of the dating service and how she plans to turn it around.

Zoosk earned over $178 million and was profitable in 2013. In 2014 the company earned more than $200 million, but they again slipped into the red and lost money. For this reason they let go 15% of their staff and canceled the planned IPO.

With her eye on Zoosk being profitable again, this pass November Kelly switched Zoosk to a premium model. This means a subscription is now required for Zoosk members to send messages. It is still free to create a profile and search for other Zooskers though and this is the same model that other companies like Match.com, eHarmony and Christian Mingle uses. Zoosk also plans to introduce a number of other new features for their premium service to entice more users to pay. This includes a photo verification system and a badge to identify members who have been verified.

So far it appears the turn around of Zoosk (or at least the start of it) has been a success. Kelly Steckelberg says Zoosk will soon announced that the first quarter of 2015 was profitable.

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

IAC, the company who is the majority stakeholder in popular dating app Tinder, no longer wants Sean Rad in the driver’s seat. As of late March, the company has named the new CEO who will be taking his place: Christopher Payne.

Payne previously worked for eBay as a senior vice president in the company’s marketplaces division, where he was responsible for the North American market. He also founded Positronic, a search technology company, which eBay acquired in 2008. Before that, he worked for 13 years at Microsoft, including heading its search unit, which was then called Windows Search Live.

“Christopher brings invaluable experience running consumer technology businesses that operate at massive scale,” Mr. Rad said in a statement.

But the change might not be completely embraced by Rad, who was embroiled in a very public sexual harassment lawsuit brought about by former employee Whitney Wolfe. They settled out of court for an undisclosed amount, and she has now launched a new dating app of her own that directly competes with Tinder. Rad will remain President of Tinder and retains a seat on the company’s board. According to reports, he will still be in charge of product and marketing, but Payne will take over everything else.

The spotlight that has been on Rad the past few years has not been flattering, and the most recent scrutiny has come as a result of the new premium service Tinder Plus, which is costing as much as $19.99 US per month for two additional features. Users have asked to be able to use Tinder in multiple cities, as well as to “go back” and swipe right on matches they’d previously turned down. The new service offers these features for a price – but if you want to just keep the basic free service, the company has also put limits on the amount of swiping you can do in a 24-hour period. This caused controversy when it launched in the UK, and the app’s rating in the iTunes store went down to one and a half stars as a result.

Another controversial decision was pricing for the new service, which is based on age. For users under 30, Tinder Plus costs $9.99 per month, but for those 30 and older, it goes up to $19.99, and even more in European countries. Rad says a lot of research went into the pricing, and he stands by what he says customers are willing to pay.

Tinder also plans to launch an ad product, but has not disclosed how this will affect the service or user’s experience. Until now, advertising revenue has come from product placement, but the app has a lot of valuable user information for marketing departments to tap into.

IAC hopes that Payne can refocus Tinder’s business goals and help it grow into a more profitable as well as popular company.

Read our review of Tinder to find out more about this popular dating app.