Category: Match Group
A Contradiction In Contexts :: Why Dating Is Deadly For Facebook
OPW – May 2 – Yesterday I sent out a request to IDEA members to comment about the news that Facebook is getting into Internet dating. Before I go through the responses and permanently bias my opinion, I thought I'd reflect on some key points first.
Facebook has captured the market for social networking. They just own it at this stage. But dating is different. Here's why. **Context matters**
CONTEXT MATTERS – Recently I studied under Professor Paul Dolan at London School of Economics for their MSc Behavioral Science. The one thing we heard from Paul over and over again, to the point that it became amusing, was that 'context matters.' Meaning, the way behavior works is extremely context sensitive. The rules may apply in one context, but than a perfectly good experiment and observation may fail in another context.
Facebook = place to stay in touch with friends = non-private
Dating App = place to meet new love interests = private
When people go on a social network they are there to communicate with people they already know. The dating context is the antithesis. When people go to their favorite dating app, they're seeking a private place to find someone new to meet. These contexts are at odds with each other. I don't see how Facebook will be able to overcome this in the minds of users.
I had a stint at Friendster in 2003, which was a precursor to Facebook (see thumbnail). The CEO Jonathan Abrams thought dating was cheesy. After his girlfriend dumped him, he decided to create a service that would do a better job than dating sites, and presumably, not be cheesy. He wanted to link people up online, but his model and site floundered in the end, and MySpace and then Facebook took market dominating positions. Key to them taking their dominant positions was that their context was more clear (and their sites actually worked). MySpace ended up losing to Facebook because their context was less clear, and people were allowed to create fakester accounts and link with non-friends on Myspace. It was the wild west, and a popularity contest. Facebook came in and encouraged people to think about who they were linking with. Consequently, the network was built on real friendships, and the context was and is beautifully clear.
Social networking was born with dating in mind. But noone's ever successfully pulled the trigger to really combine dating and social networking, because they are two entirely separate use-cases and contexts. I got recruited into FriendFinder in 2003 when the CEO insisted on turning half of FriendFinder into a social network. It didn't work. Social networking was deadly to dating.
Now, it seems, Facebook is going to experiment with dating, and I think this is dangerous for maintaining their clear social networking context. Dating is deadly to social networking.
MEETUP SINGLES EVENTS VOID – Where Facebook definitely wins out, is events. There's a significant void in the market for dating events since Meetup banned singles events and groups in 2016. That will certainly help them win favor and attention from singles. But to what ends? They will just erode their social networking context.
MATCH WINS, SO FAR – Match Group is the clear winner in the Internet dating game, at this stage. They've routed the industry with the combined force of Tinder, POF and Match. Match Group have the most to lose with the introduction of free dating on Facebook. But, I think the real losers will be all the small startups that will have an even harder time raising money and getting to critical mass. eHarmony, meanwhile, should be just fine.
EHARMONY IS LESS HARMED – Steve Carter was at eHarmony from its beginning, from 1999-2017. He was their Chief Scientist, the man behind their algorithm, basically. But he left eHarmony in July 2017 to join Facebook. For the last 10 months he's been at Facebook to help them "get even better at making meaningful and beneficial connections between people." See https://www.linkedin.com/in/docscarter/.
This is probably fine by eHarmony. They have a distinct offering in the dating market. It's the service that requires more of their users, and in theory, delivers more. eHarmony is positioned as a matchmaker, in a sea of dating apps. They're more thoughtful, take a bit more time, and take a bit more money from users who are more committed. I think Facebook dating directly competes with Match Group offerings, but eHarmony has a more resilient brand against Facebook's lite dating app. Perhaps its time for Match Group to take another look at eHarmony. After all, it's ok to look. (hint: before Facebook does!)
PERFECT MODEL, PROBABLY NOT REALIZABLE FOR FACEBOOK – I think the perfect theoretical model for the perfect Internet dating service is, one app with all the singles on the planet on it, with really great introductions algorithms, based on observed behavior. People often lie about what they want, and who they are, but by observing behavior, and preferences in-the-moment they can form a more accurate picture of true character. Having a window into user behavior is key for dating. Facebook has this window, but can't use it. It would be just too creepy for a lot of people. Facebook is just not the company that would be trusted to do this. Facebook might well do an end-run around Tinder, but I don't think they'll be able to deliver on the perfect theoretical Internet dating model because they will not be trusted to get enough access to observable behavior. (2nd hint: but eHarmony might!)
So in short, I don't think Facebook can deliver on dating, and by entwining the dating context into their social networking context, they risk confusing and alienating users. Tinder will suffer, and eHarmony won't. We'll all need to innovate faster and be more creative about marketing. Humdrum just won't work any more.
Feel free to blast any of these ideas with your constructive feedback. 🙂 What's your thoughts?
See all posts on Facebook Dating
Post by Mark Brooks, CEO IDEA
Facebook To Launch Opt-In Dating Feature
by Deepa Seetharaman & Georgia Wells
See full article at Wall Street Journal
See all posts on Match Group
See all posts on Facebook Dating
Market Swipes Left On Match Group
REUTERS – May 2 – Shares of Match Group and its parent IAC plunged, wiping some $5B off their combined market values, after Facebook CEO Mark Zuckerberg said Facebook would enter the online dating world. Match fell 22% and IAC fell ~18% in its biggest daily loss in about 13 years. Spark Networks, owner of Jdate and Christian Mingle, also closed 4% lower. Although analysts said Facebook's initial foray would not likely be a threat to established dating sites.
See all posts on Match Group
See all posts on Spark Networks
See all posts on Facebook Dating
Facebook Is Taking On Tinder With New Dating Features
by Nick Statt
See full article at The Verge
Match Group’s Long Term Sustainable Competitive Advantage
OPW – Apr 25 – I came across this great article on sustainable competitive advantage by the V.C. company Greylock Partners. It got me thinking about Match Group. They're the clear leader in the dating industry now, of course. But what aspects of their business are contributing to their long term sustainable competitive advantage?
Let's look down the list that Greylock Partners' article lists…
- Network Effects – NO
- Scale – YES, ABSOLUTELY!
(i) Negotiated Leverage – YES
(ii) Amortization of Fixed Costs – YES
(iii) Product Density – YES, VERY SUBSTANTIALLY YES - Brand – YES
- Non-Network Switching Costs – YES
- Regulatory – NO
- Technical Advantage – YES
- Cornered Access to Limited Supply – NO
Read the full article on IDEA blog
Post by Mark Brooks, CEO IDEA
A Match.com Glitch Reactivated A Bunch Of Old Profiles
THE VERGE – Apr 23 – A Match Group spokesperson confirmed that a "limited number" of old accounts had been accidentally reactivated recently and that any account affected received a password reset. Match.com's current privacy statement says that the company can "retain certain information associated with user account" even after they close it. The company plans to roll out a new privacy policy in order to comply with the EU's General Data Protection Regulation (GDPR); under the new policy, all those years-old accounts will be deleted. Although there is no federal data destruction law in the US, 32 states have data disposal laws that require "entities to destroy, dispose, or otherwise make personal information unreadable or undecipherable."
10 Reasons To Invest In Match Group
SEEKING ALPHA – Apr 17 – Buy and hold MTCH for at least three to five years. Here's why:
- An emerging and fast-growing online dating services market
- Limited competition Tinder just made $0.4B revenue in 2017 and its closest competitors also are Match Group properties such as Match.com or POF.
- Tinder is a worldwide brand with no close number two internationally
- A strong leadership. An industry leader enforcing its patent
- Multiple growth – users, subscribers and revenue
- A scalable platform that costs little to operate. Operating profit already is at 27% in 2017, and projected to be above 30% in 2018.
- Higher barrier to entry for new entrants as the industry matures
- M&A history of Match Group
- Price appreciation. Since its IPO at $13.5 a share, Match Group's share price has been climbing steadily and is now very close to its all-time high.
- Valuation – Match Group is richly valued if we consider the price/sales ratio of 9 or the trailing P/E of 38.
Match Group Appoints Malgosia Green CEO Of Plenty Of Fish
PR NEWSWIRE – Apr 12 – Green founded and led various consumer and education tech companies in Toronto and has a strong track-record building and leading product and engineering teams. Most recently Green served as the Chief Product Officer of Top Hat, an innovative education technology business where higher education instructors can create content to engage students both in and outside the classroom.
The full article was originally published at Match Group website, but is no longer available.
Bumble Is Suing Match For $400M For Fraudulently Obtaining Trade Secrets
TECH CRUNCH – Mar 28 – Two weeks ago Match Group sued Bumble for patent infringement and misuse of intellectual property. Bumble has now filing a separate lawsuit accusing Match of multiple improprieties in regards to interactions between the two companies over the past few months. The lawsuit acknowledges that Bumble and Match Group were in acquisition talks over the last 6 months. Bumble alleges that once Match Group found out there were other companies also interested in either investing in or acquiring Bumble, Match Group filed their aforementioned lawsuit to make Bumble less attractive to those other companies. Secondly, Bumble alleges that during the acquisition process Match Group fraudulently requested that Bumble provide "confidential and trade secret information" which Match Group said they "needed to provide a higher offer for Bumble". Bumble alleges that no subsequent offer came, and Match Group instead requested and obtained this information solely for "the financial benefit of its dating app businesses". The lawsuit requests relief in the form of monetary damages, which Bumble estimates at $400M.
by Fitz Tepper
See full article at Tech Crunch