$100.000.000 for Tinder?


Last week Match Group announced their IPO. Probably you’ve never heard of Match Group before, but when I tell you it is the parent of Tinder most of you might know it. With this IPO they’re planning to collect $ 100.000.000,- . It made me wondering how it’s possible that an in essence free dating app can be worth so much.

The first thing I found out is that Match Group, also owner of OKcupid and Match.com, managed quiet well to create revenue. With total revenues of $ 883.300.000,- dollar and a net income of $ 148.400.000 for 2014 they are a big player in the booming market of online dating. For the U.S. the use of dating sites increased the last five years from 2,7 million in 2009 to 5,6 million in 2014 (Datinginsider, 2015). And U.S. has with its 2% “online” citizens active on dating sites a far lower number than Europa, with 15%. According to Egan (2003) the online personal category is one of the most lucrative forms of paid content on the web.

Why is online dating so popular? In their research Ellison et all (2006) have a quite logical answer to that. Mediated matchmaking isn’t something new and overtime the social stigma on online dating was diminished. That combined with only needing an internet connection and the possibility to date within your comfort zone and the affordable cost of internet match making results in low barriers. Another upside from online dating is the possibility to build your own profile and what is seen is that people often present the ideal version of their selves: their profile represents a combination of who they actually are and who they want to be. But, with a possible offline encounter in mind, they also tent to create a reliable presentation of theirselves.

Tinder was a first mover regarding location-based real-time dating (Handel & Shklovski, 2012). According to CEO of Match.com, Sam Yagan, Tinder gives the people what they want: an easier and faster way to meet someone new in real time. “This device is the thing that marries online dating and offline dating…. Mobile dating is one of the few digital products that, when you use it, is designed to lead to a meeting.” (James, 2015). And maybe that is why Tinder became so popular: It is free, easy to use (just link it to your Facebook and you’re online) and it creates a bridge between online and offline. By adding paid features they are able to create revenue. The question is, is it worth another $ 100.000.000 ?

References:

Ellison, N., Heino, R., & Gibbs, J. (2006). Managing impressions online: Self‐presentation processes in the online dating environment. Journal of ComputerMediated Communication11(2), 415-441.

Handel, M., & Shklovski, I. (2012). Disclosure, Ambiguity and Risk Reduction in RealTime Dating Sites. Proceedings of the 17th ACM international conference on supporting group work. 175-178.

James, J. L. (2015). Mobile Dating in the Digital Age: Computer-Mediated Communication and Relationship Building on Tinder (Doctoral dissertation, Texas State University).

Wells, J. & Armental, M. (2015) ‘Match group files for IPO’, The Wallstreet Journal, 16 October 2015, Available: http://www.wsj.com/articles/match-group-files-for-ipo-1445032992

Unknown author:

Dating Insider (2011) ‘Vijftien procent internetgebruikers gebruikt wel eens datingsite’ 23 December 2011. Available: http://www.datinginsider.nl/vijftien-procent-internetgeruikers-gebruikt-datingsite

Dating Insider (2015) ‘Gebruik van datingsites in de laatste vijf jaar verdubbeld (VS)’ 7 March 2015. Available:http://www.datinginsider.nl/gebruik-van-datingsites-in-de-laatste-vijf-jaar-verdubbeld-vs

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