Tinder

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.

Dating is a numbers game, but what happens when you’re not 23 any longer – do the numbers start working against you?

No! The truth is, people are looking for partners of all ages. More than half the U.S. adult population is single, and many are baby boomers and Gen Xers looking to find love after a break-up or divorce, or want to get married for the first time. You are not alone.

The media would like us to think that young daters are the only ones out there who are actively dating and forming relationships, but that is far from the truth. Older daters are higher in number, but are slowly adapting to the technology available to them – specifically online and mobile dating. The stigma is gone for the most part, thanks to the ease, accessibility and popularity of mobile dating apps. How many 40-somethings do you know using Tinder? Probably more than you’d expect.

If you are over 40 and wondering how to approach this whole dating thing, here are some tips:

Try different sites and apps. Not everyone over age 40 should be on eHarmony. Not every guy should be on Tinder. Before you join, ask yourself what your goals are. Do you want to test the dating waters without getting serious? Do you want to get married? Or would you like to find a girlfriend/ boyfriend for companionship? Different sites and apps offer different experiences, so be sure to research first.

Be honest in your approach. So many women lie about their ages, and so many men lie about their height. They want to attract more people, but in the end when you are meeting dates in real life, they will be upset by the lie. Don’t start any relationship this way. The people who are right for you won’t let age or height be a factor, so don’t you either.

Let go of your baggage. There’s nothing more important than examining past relationships and seeing where we can get rid of old beliefs and thought patterns that aren’t serving us. Anger and fear are the two worst things to hang on to – for anyone. Go to counseling, talk with a friend, start a practice in yoga – do what it takes to help lift you beyond your current fear and anger, and into a place of greater peace before you date. It will be worth it.

Think about what you want in a relationship. It’s more important to understand how you want to feel in a relationship, rather than looking for a guy or girl who checks off those “boxes” – like being hot, or educated, or successful. These don’t matter nearly as much when you are in the relationship. Instead, think about the kind of person you’d like to spend time with.

Cultivate your own happiness and personal life. Do you enjoy travel, riding your bike, or cooking? Don’t wait for a partner to plan your next trip, or a cycling buddy before you research new biking trails, or a boyfriend before you start cooking elaborate 4-course meals. Do it for you! When you do things that make you happy, it puts you in a great headspace to attract others who are happy in their lives, too.

According to online security firm Symantec, everybody’s favorite mobile dating app is suffering from an “influx of spam bots and fake profiles.”

The presence of spammers and scammers isn't new to online dating sites, but so far it hasn't been a major concern for Tinder users. There are three kinds of spam campaigns currently targeting Tinder users. The first is adult webcam spam, in which bots engage real users in conversation and then try to persuade them to click on links to adult webcam websites.

A second common spam campaign promotes mobile apps, especially games, to Tinder users. Instead of directing people to adult webcam sites, this kind of spam tries to entice them into downloading and playing games like Castle Clash.

The third, and most common according to Symantec, kind of spam campaign involves fake prostitution profiles. These are typically identifiable by photos of women overlaid with text that details services, rates, and contact info. By including the info in photos rather than text, spammers can evade detection from spam filters searching for undesirable keywords in Tinder’s profiles.

What all three kinds of spam have in common is affiliate programs. In each case, the promoted destinations offer spammers money in exchange for converting leads. Spammers stand to make something like $6.00 per lead for a successful sign-up, and up to $60.00 for leads that become premium members. It may sound easy to avoid spammers, but plenty of people are falling for it. Symantec found that some spam links can get hundreds of thousands of clicks.

"For instance,” writes Satnam Narang for Symantec, “from the end of January 2014 until mid-April 2014, a campaign associated with a site called blamcams resulted in nearly half a million clicks across seven URLs. Depending on the offers given by the affiliate program and the number of successful conversions of leads, this particular spammer likely earned quite a bit of money."

So what can you do about it?

Report fake profiles to Tinder. Beneath every profile image there are three red dots. Click that icon to find the option to report the user. From there, a dialog window will open with three options. Select “Feels like SPAM”. It’s up to users themselves to police the Tinder community, so stay alert for fake profiles and spam bots and alert the app’s team so they are detected and eliminated as quickly as possible.

For more on this dating app you can check out our review of Tinder.

The online dating platform took several years for singles to embrace, undergoing much skepticism from the public. Does it really work? many would ask. It seems kind of desperate to join an online dating site, others might remark. There was a lot of judgment and confusion around the process, who joined, and what results it would yield.

Now all that’s changed because of our phones. According to a 2013 report from Pew Research, one in ten Americans have used an online dating site or app. And among singles looking for partners, that number is even higher, with 38% having used dating sites or apps.

It seems that dating apps have become a popular way to meet other singles, especially for people under 30. Gone is the stigma of looking desperate, or worrying about whether you’ll find “the one.” It seems instead people are opting for something that is simple to set up, simple to use, and completely accessible – scrolling through profiles and photos while you are in line at the drugstore, waiting for your friends at the bar, or bored with nothing better to do on Sunday afternoon.

Are people flocking to dating apps because we have become addicted to mobile technology? Or is it because online dating is much easier when you can access it over your phone? Perhaps it’s that meeting people through dating apps feels more like a game than something to take seriously, so it takes all the pressure off of participants?

According to a recent article in Business Insider, it could be all of these things. Regardless of the reasons, we’re starting to see a trend towards using technology for dating – with both online dating and mobile dating apps.

There does seem to be a generational divide. Younger singles under 30 prefer to use dating apps rather than online dating sites, and app developers are going after this market. There are an endless amount of new dating apps popping up every day, each offering something different, but all still relying on a hefty user base. Baby boomers and older daters however, still opt for the more traditional online dating options, which means Match.com and others share a good percentage of the market.

Most dating apps steer clear of the traditional online model of a monthly subscription service. Instead, they are offered for free, as this model tends to attract most users (and let’s face it – the value of any app or online dating site is in the numbers). In order to make money, several app developers have started offering a “freemium” model which gives users the option to pay for added features, like being able to search through more matches at a time, filtering their searches according to specific preferences, or chatting with someone they previously passed on.

Some are making money through advertising, though this can be distracting for users. Wyldfire, a new dating app, has made their advertising model a little more enticing by offering ads as incentives. When members get a certain percentage of likes, they get a discount on a service like Uber as a reward.

Some dating app developers speculate that the market will trim down over the next few years, and only two or three apps will be real contenders. Considering IAC owns most of the market – Match.com, OkCupid and Tinder are part of their roster – they may be right. In the meantime, we’ll have to see how it evolves.

Tinder has hit a bit of a rough patch lately. The company behind the hyper-popular mobile dating app was recently slapped with a lawsuit by its former VP of Marketing, Whitney Wolfe. In the suit, Wolfe alleges that she was sexually harassed and discriminated against at work, stripped of her co-founder title, and forced out of the company when she complained.

There’s no question that Wolfe’s accusations have affected the people involved, one of whom was suspended indefinitely, but what remains to be seen is whether they affect the company as a whole and its majority shareholder IAC.

Investors have been hoping that IAC, which also owns Match.com and OkCupid, would use Tinder’s success to spin off its online dating businesses into a separate company, thereby making IAC shares more valuable. But now that Tinder’s in trouble, that prospect could be in trouble too. “Given what’s going on at Tinder, I would assume that probably would cause IAC and Match to think a little bit longer and harder about pursuing that at this juncture,” Scott Kessler, an analyst with S&P Capital IQ, told Bloomberg News last week.

I’m just guessing here, but IAC and its shareholders probably aren’t too pleased at this complication throwing a wrench in a very lucrative opportunity. Investors have been encouraging IAC execs for months to speed up the process of making Match its own business, but now their plans may be thwarted (or at least slowed down).

Last year, IAC made $788 million in revenue from membership and subscription dues for dating services – well more than twice what it had made five years earlier, despite the fact that they have yet to monetize Tinder. What's more important than revenue for investors is market value, which Tinder has in spades. Tinder is one of the hottest commodities on the market right now, and creating the separate Match group could cause spikes in the stock prices of both IAC and the newly formed company.

History has shown that this is a good move for IAC. When the company separated Match from its search business, its stock price jumped significantly. Barry Diller, IAC’s chairman, has also seen huge profits from spinning off businesses from IAC. The question now is whether or not Tinder is damaged goods and, if so, just how damaged. So far the company is remaining frustratingly tight-lipped about both Tinder’s trouble and the possibility of Match becoming its own company.

Most things are going brilliantly for Tinder these days, but one thing most certainly is not. Whitney Wolfe, Tinder’s former vice president of marketing, slapped the company with a sexual discrimination lawsuit at the end of June.

In the suit, Wolfe claims her former boss called her a “whore” at a company event in the presence of Tinder CEO Sean Rad and that she was stripped of her status as a Tinder co-founder. When she complained about her treatment to other executives, including Rad, she says they forced her out of the company.

The story goes back to 2013, when Wolfe and chief marketing officer Justin Mateen dated for several months. After they broke up, Wolfe claims Mateen sent her a series of inappropriate text messages and e-mails filled with racist and sexist language. When she complained to Rad and Match.com CEO Sam Yagan, they allegedly ignored her repeated complaints about his behaviour.

Wolfe also contends that Mateen told her she was not listed in Tinder’s press materials as a co-founder because having “a girl founder” who was just 24-years-old (at the time) would devalue the company. Later, after Mateen allegedly called her a “whore” in front of Rad and other co-workers, Wolfe says she offered to resign in exchange for “modest severance” and the vesting of her stock options. Instead, she claims, she was fired.

John Mullan, one of Wolfe’s attorneys, said in a statement that Wolfe “lost her job simply for refusing to take the abuse any longer.” Another one of her attorneys said “IAC and Match.com, which own Tinder, allowed this culture to exist and did nothing to prevent the discrimination or harassment. IAC and Match.com need to be held responsible for their failure to supervise the executives at Tinder. There really was no ‘adult in the room.’”

In response, IAC indefinitely suspended Mateen. “Through that process, it has become clear that Mr. Mateen sent private messages to Ms. Wolfe containing inappropriate content,” the company said in a statement. “We unequivocally condemn these messages, but believe that Ms. Wolfe’s allegations with respect to Tinder and its management are unfounded.”

The story gets more complex when you try to determine who actually is a legitimate co-founder of Tinder. TechCrunch did an in-depth examination of the people involved in Tinder’s creation and it’s…convoluted, to say the least. It’s hard to see how they themselves can keep up with it all (and maybe they can't), much less anyone else.

Wolfe is seeking compensatory damages, including for lost pay and benefits, as well as punitive damages for emotional distress.