Match.com has made a number of smart business moves recently. Today they continue the trend, announcing the acquisition of People Media for $80 million in cash.
Broad-based online dating site Match.com is buying into the targeted subscription dating business with the acquisition of People Media from private equity firm American Capital Ltd. and various investors for $80 million in cash. The deal will add 27 dating sites with a combined 255,000 paying subs to the IAC (NSDQ: IACI) unit, including BlackPeopleMeet.com, LDSPlanet.com, SingleParentMeet.com, SeniorPeopleMeet.com.
Spark Networks put on a nice dress and was asked to the dance, but Match went home with People Media. That has got to sting. How long until IAC buys Yahoo Personals?
I’ll dig into the details of the deal in a future post.
Via Paid Content. Full press release.
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{ 15 comments… read them below or add one }
Was Spark Networks actually in talks with Match? Very interesting. Match’s purchase appears to have 25% more paying members than Spark’s entire company including Jdate.
Back in December 2007 there was a story in the NY Times about Spark looking to be purchased, and the article included a valuation (I don’t know the source) of $195 million for the company. Two years later, a purchase of approximately the same size member base for only $80 million.
Very intriguing.
USD 80,000,000 / 255,000 paying clients = USD313.70 per client; a too high price for those low quality daters!!!
As online daters are using various sites at the same time, 255,000 paying subscribers from People Media not neccesarily will arithmetically add to IAC’s previous 1,450,000 paying subscribers.
Does IAC want to reach more than 2,000,000 paying subscribers before 2012?
But IAC will need to sustain more than 2,000,000 paying subscribers, because acquiring dating sites is a single use trick.
Remember UDate and NetClubEncuentro acquired by Match some years ago? They lost all their daters because they were “transferred” to Match.
Regards,
Fernando Ardenghi.
Buenos Aires.
Argentina.
ardenghifer@gmail.com
With them in talks to try and buy yahoo personals and probably eharmony as well the dating industry is starting to get very small.
Agreed.
Markus –
I’ll team up with you — and we’ll take them ALL out :)
But seriously, if these companies keep merging and continue to find the lowest common denominator of service, I’m all for it. It’ll make it that much easier for those of us who actually care about our members (especially the ones we don’t have yet) to attract, retain and truly help our members achieve their online dating goals.
This is a common occurrence in a growing market, the top players buy out promising or those they perceive as future threat to consolidate their position, in the long run there will be a few rather huge dating organisation and then a few small players who can offer niche services the large faceless one at the top cannot offer.
It’ll be very interesting to see what Match does with this – I’ve got a lot of respect for the guys at Match and IAC but running niche sites requires real market knowledge of the niche. We leave it to partners who know the niche to run their sites, I’m not sure whether the guys at IAC will know the niche as much as people within that niche do.
It’s a natural move for Match – if you can’t increase market share through marketing but have a big pot of cash, then why not use it to grow through acquisition? :)
R
Thats what they did in Asia, why launch something new when you can acquire. Match is a big-box retailer, not a niche player, something tells me they’ll leave PeopleMedia to the day-to-day operations and perhaps marketing. I’ll know more when I talk with them next week.
Right! Match is going to be the Wal-Mart in the dating industry.
This is a huge acquisition for Match.com. The industry is definitely consolidating. It will be interesting to see which dating companies will be around in 18 months. Thanks for the article.
IAC seems to be acquiring all the online dating traffic. But I don’t think that the industry is consolidating. It has a lot of room for product growth. The industry rather seems to be stagnant in terms of its offering for last 5 years
Ryan,
I tend to disagree with you a bit. I think that the larger companies in the industry have been stagnant, but there are newer sites like mine that are far different than what is currently out there in the marketplace.
Why would anyone want to buy Yahoo Personals? In my basic search on Yahoo, there are 250 matches. On Match, it’s 1120.
Maurice,
Perhaps your results aren’t representative for the rest of the site. But that said, acquisition cost is acquisition cost whether it’s advertising, affiliate marketing, live events or a purchase of another company. Even using your numbers, that would be an increase in network size by about 20%, which is not insignificant.
Dave could probably give us a better number, but I thought Yahoo was much closer in size to Match than that. I figured they were closer to 60 or 70% the size of Match.
Agree with Ross.