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Match’s competitors, like e Harmony and the popular mobile app Zoosk, which is going public this year, have come to rely on so-called freemium models, which have grown more widespread in the online dating industry.
For instance, while both sites are free to join, Zoosk has been successful in getting customers to pay more for things like appearing higher on a search list or finding out whether someone whom you’ve pinged just hasn’t seen your message or is ignoring you.
As of the end of last year, IAC said it hosted 30 million active users among its dating properties, 3.4 million of which are regular paid subscribers.
The Match Group is now responsible for about one quarter of IAC’s overall revenue.“We are not just the acquirer of choice,” said Sam Yagan, chief executive of the Match Group, “we are the only acquirer.” But if IAC seems cocky, investors seem nervous.
In a conference call with analysts in July, he said the company assumed Tinder could eventually earn $75 million a year in earnings before interest, taxes, depreciation and amortization.
But the entire Match Group, by comparison, earned revenue of $788 million last year, about one-quarter of IAC’s $3 billion revenue in 2013. He points out that Tinder is the first dating site to crack the top five in the last decade.
Blatt, said one dating site, Tinder, could generate.
He said it could generate million a year in earnings before interest, taxes, depreciation and amortization — not million in annual revenue.
While such websites often have short life spans, they increasingly pull singles away from the larger, more general sites.
Moreover, increased competition for subscribers has increased advertising costs for most sites.
Dating through mobile is exploding and now accounts for roughly 27 percent of the dating site services, but it has remained a persistently weak spot for much of the industry.Tags: Adult Dating, affair dating, sex dating