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Match.com Acquires OKCupid

Match.com acquires NYC’s OKCupidMatch acquires OKCupid dating site for $50 million cashToday Match.com, announced that it has acquired OkCupid, the U.S. online dating company, for $50 million in cash, plus potential future payments contingent upon performance.

Its about time.

OKCupid is the fastest-growing ad-supported dating site, catering to a younger casual crowd. Everyone knows I’ve been a huge fan and supporter of OKCupid, and I’m extremely happy for the the entire OKC team.

Match should be pumped as well. They are getting access to a brain-trust bringing a lot of dating industry experience that Match simply doesn’t have.

Match has executives that do laps around IAC properties, receive some Match experience, then move on whereas OKCupid are a bunch of heads-down computer scientists who could care less about Match or any other dating site for that matter. They do what they do better than anyone else hands down, and thats all the matters. Last time I was at their offices in New York one of their staff thought I was delivering lunch.

From an inspirational, feature and design standpoint Match needs OKCupid more than OKCupid needs Match. Probably not going to happen but how much do we hope that the OKC design sensibility and feature set rubs off on Match’s aging look and functionality? I know Lavinia from Thought-Rocket has been working with People Media after the Match acquisition, but the whole Match patchwork quite of sites is beginning to look like Spark Networks.

OKCupid simply needs Match’s resources for television commercials and other marketing and advertising channels and maybe help with international growth. I mean, what else can Match do for them that they can’t do themselves?

In general, lets hope Match keeps their paws off of OKCupid.

One would expect Sam Yagan, Chris Coyne Max Krohn Christian Rudder and the rest of the team to stay on board until performance payouts are due. Sam and his group have made a fortune taking things that are traditionally fee-based and making them free. I wonder what industry they will free up next?

Match CEO Greg Blatt seems to see all of their acquisitions as feeder sites for the Match mothership.

We know that many people who start out on advertising-based sites ultimately develop an appetite for the broader feature set and more committed community, which subscription sites like Match.com and Chemistry.com offer.

[This was cribbed from Markus at Plentyoffish, who built his entire dating empire on the fact that people quickly get tired of his site, click an affiliate link to another dating site and Markus makes $50. Absolutely brilliant five years ago in terms of raking in the cash, this model doesn’t work very well from a branding perspective.]

While Blatt’s statement makes sense from Match’s perspective, it doesn’t apply to OKCupid in the least. People are on OKCupid because they don’t want to be on Match. And OKCupid members certainly don’t want anything to do with Chemistry.com. Approaching OKC like a training ground for future Match members doesn’t make sense. Maybe for other IAC (owners of Match) properties but Chemistry.com? Please.

And Match’s broader feature set? Go compare Daily5, date matching and MatchWords to all of the features at OKCupid. Match does have more customer service reps than OKCupid, which doesn’t have any because they don’t need them.

The argument that Match members are more serious about dating vs. OKCupid has some merit, but there really is only one serious dating site now and thats eHarmony with Chemistry right behind them. Match is simply too large now to be considered for serious daters.

Speaking of not wanting to be on Match, last year according to Dad’s House:

OKCupid analyzed the success rate of match.com and eHarmony, piecing together numbers from their websites and press kits and press releases, and arrived at an interesting conclusion – you are 12 times more likely to get married this year if you DON’T subscribe to match.com!

Rivals turning into friends, isn’t that sweet?

Any time I hear executives say things like “coordinating the adjacent business models will help fuel continued growth for both” I get nervous. That’s what eBay said about Skype and look how that turned out.

Match had 1.4 million paying members for years and finally last year that number grew to 1.8 million which I was pleased to see. Match finally seems to be turning on the afterburners, and OKCupid is the most recent booster rocket, providing additional thrust to a business that has in recent years attempted to fuel growth via feeder sites they acquired like People Media, SinglesNet and the international partner deals with Meetic and Yahoo (and lets not forget Match powers a lot of Microsoft sites).

Its time to officially declare online dating a mature industry and with that the realization that 2002- 2005 were the glory years. The dating industry is about acquiring traffic as cheaply as possible and wringing as much revenue out of members while moving chess pieces around a board and maximizing shareholder value.

Part of me is disappointed that my favorite dating site has sold out. $50 million was too low a price to pay but its cash and an “ok” deal for OKCupid. Who’s the new dating site underdog?

More at Business Insider, TechCrunch and IAC Investor page.

Crains New York Interviewed me about the deal in Match.com acquires NYC’s OKCupid.

The Atlantic points to a story that OKCupid has taken down blog posts critical of paid dating, Match specifically. Here’s a cached copy of Why You Should Never Pay For Online Dating. Shoot, I would take down a blog post for $50 million, wouldn’t you? Its not like OKCupid has changed its tune about free dating, it just has more layers of administrivia to deal with and another company to send checks to.

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Comments

  1. Dave, do you have a sense of how much OkC was generating in revenues?

  2. I’d say a couple million a year.

  3. Agreed. I’d venture to say 5M or less.

  4. “People are on OKCupid because they don’t want to be on Match. And OKCupid members certainly don’t want anything to do with Chemistry.com.”

    Abso-frikkin’-lutely!!!
    On Match there is no way to tell if a member is capable of responding to your e-mail (and 90% of them aren’t because they ain’t paying members).
    Percentage of OKCupid members with capability to e-mail = 100%.

    Even though OKC may have a lot fewer members than Match, at least they can all “communicate” with you!

    And don’t even get me started on how Chemistry uses “Some one is interested in you” as a hook to get you (and most of the time the other person as well!) to cough up $50/month to be able to communicate with other members.

    Plus I like that OKC supports “Activity Partners” / friends as well as “Dating”.
    In general I have found it to be way less of a meat-market than Match, with much more “genuine” people in their membership.

    I’m really happy for the OKC team that their “ship has come in” – but I hope that ship doesn’t turn into a monster shark that chews up OKC and destroys its unique (and totally awesome) offerings/community.

  5. From the department of “What is he saying exactly?”, IAC CEO Blatt:

    …acknowledged that he would rather have a user sign-up (and pay) for Match than sign on to OkCupid, which is free to use, but he said that the company was not looking at OkCupid as a “traffic acquisition strategy” for its subscription sites. Instead, he said that while there would now be an opportunity to market Match to OkCupid users, there would also be opportunities to get some users who visited Match but weren’t willing to pay up to head to OkCupid instead. “We really do believe that these are not tradeoffs,” he said.

    Via PaidContent.

    • My rosy glasses say OKCupid could take some percentage of Match.com’s churn directly, which might translate into something positive… But at a deeper level, this could be IAC’s “Mint.com moment” – a chance to repair failed teams and strategies with true winners, who are more aligned with customer needs/desires, who theoretically can revamp offerings, and eventually build a more profitable company.

      The only problem is, even if that were the case, the “new guys” would still have to go to work every day in suit-and-tie IAC land, and deal with the existing bureaucracies, departmental infighting, and muddied priorities. I’d be shocked if a large percentage of the core team stayed on more than a year (maybe 2-3 for the higher-ups in exchange for a much bigger payday).

      A lot of people said Mint sold too early and to the wrong company… Very much the same feeling here – a clueless megacorp trying to buy innovation into the company. It just never actually works. As a result, the clock is ticking on OKCupid as a product/experience.

      Between this and the Plentyoffish.com break-in, I’m actually shocked the big paid sites aren’t stumbling all over themselves to show that “free doesn’t work”. Or maybe they are, and they just move so slowly their legal department hasn’t approved the press release? ;)

      • Love the Mint.com reference, although comparing the two doesn’t make much sense given the investment, experience, pedigree and other factors the color the Match/OKC deal.

        $400 million is not exactly a failed strategy when you have 1/3 of the entire dating market. How much does your dating site bring in this week?

        I’ve rarely seen a suit at IAC in New York, just sayin’. As much bluster as I give Match they have a really passionate culture (sometimes even the IAC execs doing laps ;-)

        Mint nailed it, and if they didn’t someone else will come take their place.

        Its funny how we all assume Match has layers of IAC bureaucracies when they really don’t (well some…)

        What they are is *very* careful with the brand. Don’t confuse the two. Thats startup thinking vs. long-tail established brands. Talk to me in five years about your dating site.

        Just spent an hour on the phone with Match, more to come.

      • From a business deal perspective, I agree with you that this is good for the TEAM at OKC, or at least for their collective wallets. And it’s a small enough number Match/IAC won’t even feel it even if OKC were to go belly up tomorrow.

        I’m much more doubtful that they’ll execute any kind of stable integration that makes the new whole more attractive to free, paid, and prospective members. OKCupid is popular in large part because it’s not Match.com. And now it IS Match.com. What we’re missing is the magical Aikido throw that makes those two realities work, and gives the new whole a greater momentum with which to attack the market.

        Bringing back Mint for a sec, the team there did a much better job in the first 24 hours, and repeatedly over the next few weeks post-deal, in explaining exactly how this was going to be a huge win for Mint users… Aaron Patzer (the CEO) meanwhile was all over the place, talking about how they were going to kill the redundant products within Intuit, that as part of the deal HE was going to be leading the online division himself… That message (no matter how it ultimately panned out) was very important in rallying the member-troops, and keeping them from fleeing to a competitor (Wesabe). I think Sam Yagan needs to address his OKC users in a more direct and heartfelt way that we just haven’t seen yet.

        The OKCupid twitter account has been on fire today, but the fact that the official announcements are all coming from Match.com, who really have nothing to lose, instead of OKC… It’s a bad sign. It’s only been a day, but it’s not exactly rocket science, and optimizing news cycle timing on a deal months in the making shouldn’t be that hard.

        What I find really interesting is the hypothetical: how different the reaction would be if ANY of the other dating companies had bought OKCupid – two snappy Davids teaming up against the lumbering Goliath, the spark of possibilities, the risks, the rewards. It would be the subject of discussion for weeks to come.

        Instead, the general reaction is “hope they don’t screw it up”, and most everyone’s already on to the next thing (except OKC users, who are scrambling to figure out where, if anywhere, they could possibly go if/when things start to go sour).

        Would love to be proven wrong, but it’s hard to see this as a positive story except as regards the cash payout for the OKC team, and one less competitor for Match.com to worry about.

  6. From the comments above, OKCupid’s revenue were some where between 2 and 5 million a year. That makes the sale a 10x to 25x revenue plus potential future payments. Sounds like a great deal to me.

  7. 2 million seems low for a site generating half a billion pageviews a month (tracked by quantcast)

  8. If your as mad as I am about the buy out of okcupid, you might want to protest by adding “NOMATCH” to your profile picture on OKcupid.com

    http://cubicgarden.com/2011/02/02/no-match-update-your-okcupid-profile-now/

    • You admit you are a geeky snob: -1

      Go join another dating site if you want. -1 for whining

      If a dating site getting bought by another company bothers you, welcome to the Internet. -1 for not understanding capitalism.

      Where are you going to “port” your OKCupid profile? Did you even think about this? They are so far ahead of everyone else its going to take 10 years for dating sites to catch up. -1 for daydreaming.

      Nice idea though, but OKC won’t have a difficult time cutting off the bottom of your profile. Why didn’t you do a 70% screen watermark through the center? Thats a trick from adult sites going back what, 15 years?

  9. I really think the fact that this is an apparently all-cash deal is the most troubling part. Is there any reason to stay for core team members at this point? Even if there was another $20-30MM on the table collectively, I’d bet they could do better on their own with Angel/VC help working on new and inspiring projects.

    I just don’t see a world in which those guys would be happy working inside IAC for very long. Acquisitions lead to synergies lead to death.

    Not that loud an outcry yet from users, but every little step they take (like the removal of the OKTrends post against paying for online dating) is going to get noticed, and slowly push their most loyal users away…

    Are there any second tier dating sites/communities that can expect a bump from this? I can’t immediately think of any other sites similar to OKC that are still around.

  10. Okcupid is a great site that was not a surprise that Match bought them.

  11. Not a ton of fun left at OKC. I guess it went to the other side (effectively) on 1/1/12…

  12. Al, no idea where that is coming from. Explain yourself. Jilted lover, unlucky in love or an OKC competitor?

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