The Internet has revolutionized the dating scene in the past 15 years. We have all heard of Tinder, OkCupid, and Match.com. Well, all these companies are digital innovators in their own right, but they are also part of The Match Group, a business segment of IAC Holdings. IAC Holdings has found a way to create value at every stage of our dating life, but doing so allows them to capture even greater value for themselves.
Swipe Right for Mr./Ms. Right Now
For casual daters, Tinder allows people to judge dateability based almost exclusively on appearance. We know to “swipe right” if you like, “swipe left” if you don’t. The app has functionality to filter contenders based on how far they are from your location. Bored on a Saturday night and would like to meet someone new with the least amount of work? Worry not! Tinder is there creating value for you! The app has made some money for its parent company through Tinder Plus (offering additional features such as finding matches in other cities) and, more recently, advertisement. However, the value capture point is in that Tinder serves as a gateway drug for serial daters.
Time To Date Someone Right
OkCupid, also part of The Match Group, is a free dating app that allows for a more detailed user profile and asks questions to give you matches based on your interests. So you have met a few creeps on Tinder, you want to get more serious about dating, but you are not yet ready to pay for it… OkCupid creates the value that you need! You will meet people who, like you, wanna go on a real date with someone they could actually date a few more times. Maybe you both like fly-fishing, sounds like a match made in free heaven. Wait, but how does OkCupid capture value? The site’s revenues come from advertisers and from users tricked into paying $4.95 a month to join the ‘A List’ and see their secret matches revealed.
Ready for Mr./Mrs. Right
Match.com, considered the largest and most popular dating site on the planet (75M users!), is also part of The Match Group. Match takes online dating to the next level by using machine learning to algorithmically learn your preferences and produce higher quality matches. So your 3rd 1.5 month relationship from OkCupid has ended and you are tired of being asked to be to be “the lover of an older man” or “the third to a married couple.” What now? Meet Match.com and its millions of paying potential matches. The Match.com fee filters out creeps and players. You know you are serious about dating when you are shelling $20-$40 per month to find that special one. In the end the site creates value for the customers (read their success stories here) while capturing the variable fee. This is hopefully the final destination for serial daters, unless of course…
The Value is Real
Gone are the days when people took the chance of meeting someone at a bar or at a friend’s party. Online dating reduces the time it takes to find a special someone, and increases the diversity of options. We have placed enough trust on online communities that we feel safe meeting strangers after a few digital conversations. Additionally, questionnaires and machine learning algorithms keep improving to find us increasingly better matches. The opportunities are vast for serial daters, but the value captured by IAC is real too. Tinder may not make big dollars for IAC Holdings at the moment, but by disguising itself as a “game that you would want to play even if you weren’t looking for a date”, Tinder serves as gateway for online dating. Tinder users are more likely to transition to a traditional dating site such as OkCupid or Match.com, sites that actually generate revenue dollars for IAC Holdings. Additionally, Match.com and OkCupid are dating-knowledge (data) repertoires that release somewhat anthropological studies about the dating scene in hopes lure potential users (and help current ones). This data it is shared (for a fee?) with advertisers/partners and (for free?) with other IAC companies, such as Plenty of Fish and SpeedDate.com. This incestuous data-sharing environment enables IAC Holdings to continuously improve its service offering.
Match.com was created in 1993. Its longevity, along with the $2B tag on the online dating industry, comes to prove that the value is real for serial daters as well as for digital matchmakers.