Finances

Earlier this month Spark Networks released their first quarter earnings for 2010. Revenue in this quarter overall dropped 12 percent to 10.5 million when compared to the same period last year. When compared to the last quarter in 2009, revenue dropped 5 percent. Net income for this quarter was $929,000. This is a 3 times increase over the same period last quarter of $311,000. Average paying subscribers for the whole company was 169,833. This is an increase of 1 percent when compared to quarter 1 of 2009.

Spark Networks dating sites that fall under the Jewish Networks banner (made up mostly of JDate) had revenue of $7.1 million. This is a decrease of 7 percent when compared to quarter 1, 2009. Some good news is found here because subscribers did increase 10 percent too 93,235. The last time JDate had this many subscribers was back at the end of 2007.

The other important division for Spark Networks is their Other Affinity Networks (the MingleMatch sites). For this quarter they earned $3 million which is a 10 percent decrease when compared to the same quarter last year. Subscribers were up though, by 6 percent to 68,124.

For the full 2010 Q1 release visit Spark Networks News Room.

Related Story: Spark Networks Fourth Quarter 2009 Financials

It looks like the domain name Dating.com was sold yesterday at auction on DomainFest for $1.75 million US. The domain was sold by Oversee.net to an unknown buyer. Currently the Dating.com domain hosts a World Dating Partners while label dating site. I wonder what the new owner plans on doing with the domain? I am going to assume they have plans to launch a dating service since that type of website potentially could generate the most profits. With the money the buyers spent on the domain it looks like the new owner plans to invest a fair bit of money in the new service. It should be interesting to see what they come up with.

For more on the story read TechCrunch.

Classified Intelligence Report disclosed today that they have estimated for 2010 that Craigslist will generate $122 million in gross revenue with profits ranging from $88 to $99 million. This works out to about $4 million per employee. Last year (2009) revenue was estimated to be $100 million and back in 2003 revenue was estimated at $7 million for Craigslist. According to the report, half of their revenue in 2010 will come from recruitment advertising while 30 percent comes from the Adult Services listings and a further 17 percent coming from apartment ads in New York City.

In 2009 Craigslist was accused of being a large source for prostitution. In a bid to appease lawmakers Craigslist renamed their "Erotic Services" category to "Adult Services" and upped the fee per listing to $10 (it was $5). Craigslist also agreed to manual approve each listing. When the Erotic Services category was around Craigslist donated the proceeds from these listings to undisclosed charities. Since the name change, Craigslist has stopped this practice.

Find out more at AimGroup.com and for further details about this classifieds website, read our review of Craigslist.

Early in March Great Hill Partners offered to take Spark Networks private by buying all of the shares they did not own for $3.10 per share (see Story). Great Hill currently owns about 25 percent of the stock so the deal would have cost them about $64 million. Spark Networks said they would consider the offer, much to the dismay of a number of share holders.

Yesterday, a Spark Networks special committee on the offer unanimously rejected the proposal from Great Hill Equity Partners. No reason was given about why they rejected the offer but they did say that they will continue to consider other alternatives.

For more on the story, read the Spark Networks press release.

On March 4th, 2010 Spark Networks reported quarter 4 earnings for 2009 and their year end results (which was on Dec. 31, 2009). Revenue for the fourth quarter was $11.1 million which was a decrease of 16% from the same quarter last year. Spark Networks reported a lost for this quarter of $9.6 million and for the full year, a net loss of $6.4 million. Total revenue for 2009 was $45.4 million; in 2008 it was $53.7 million. CEO Adam Berger is quoted in the press release about this the losses:

It’s no surprise to anyone following us this past year that 2009 was extremely challenging for us as revenue declined by 21% with nearly half of the decline coming from our highly profitable Jewish Networks segment ... We accelerated our cost cutting program to offset the revenue decline but were unable to overcome the $8.9 million contribution1 decline and ended up suffering a $5.7 million decline in Adjusted EBITDA

Average paying subscribers for Spark Networks was 168,646 for quarter 4 2009 which is a 5 percent decrease when compared to quarter 4 in 2008. For the full year, average paying subscribers was 166,267. This is down 11 percent from 186,957 in 2008.

While Jewish Networks revenue fell 11 percent to $7.1 million, their subscribers grew by 4 percent to 90,567 in quarter 4. Average paying subscribers for General Market Networks (Spark.com and others) was 9,594. This is a decrease of 58 percent when compared to the fourth quarter of 2008. The Other Affinity Networks (MingleMatch) had better subscriber news and posted a 4 percent increase in subscribers to 67,725 during quarter 4 2009.

While Spark Networks continues to struggle, their balance sheet shows as of December 31, 2009 cash and cash equivalents of $6.2 million with no outstanding debt.

For the full 2009 Q4 release visit Spark Networks News Room.

Related Story: Spark Networks Third Quarter 2009 Financials

In 2005 Great Hill Partners bought about 25 percent stake in Spark Networks. Just recently we learned that the PE firm offered to take Spark Networks private and buy all the shares it does not own. This would cost them about $64 million USD. Spark Networks announced their intentions to evaluate the acquisition proposal.

Spark Networks stock in 2008 was worth about $131 million. Since then they have struggled and seen their value drop to about $84 million. Spark Networks flagship dating site AmericanSingles.com during this time saw a huge drop in membership numbers (it has since been renamed Spark.com). Other dating sites they own like JDate.com have remained strong though.

Great Hill Partners stated that if they took Spark Networks private, the company could then focus on long term growth without worrying about pleasing stock holders with short term profits.

For the full story read Gigaom.