Q: How do companies put themselves up for sale in today’s marketplace?
A: Get written up in the New York Times.
Back in July of 2007, the New York Times ran a piece, A Thaw in Investment Prospects for Sex-Related Businesses? Maybe, which announced to the world that the FriendFinder network was up for sale.
Six months later, Various, Inc., the parent company of FriendFinder, announced it was selling out to Penthouse for a reported $500 million.
Today’s New York Times piece, Parent of Dating Sites Looks for a Match, explains that Spark Networks, which owns several prominent niche dating sites, most famously JDate.com, has put itself up for sale.
The Times states Spark had 2.45 million unique visitors in November 2007, ranking it No. 4 among personal sites behind Yahoo Personals, Match.com sites and Singlesnet.com. This ranking is misleading, the number aggregates visitors from Spark’s 20+ dating sites, as opposed to standalone destinations such as Match and Yahoo.
Spark reported $6.56 million in net income with revenue of $68.85 million for 2006. The company has hired AGM Partners, a boutique investment bank focused on media companies, to run the sale process, people briefed on the auction said.
I don’t see Myspace buying Spark, too small a deal and how difficult would it be for Myspace to start a dedicated dating channel? eHarmony won’t bite, it’s arguably a Christian site and what’s it going to do with the other 20 sites in the Spark stable? My money at this time is on IAC or Yahoo.
For several years I have pointed out that American Singles, which rose to prominence through a massive pop-up advertising campaign, has been hemorrhaging members every quarter in an effort to manage cost per acquisition while marketing spend was redirected to more profitable JDate.
Last year, subscriber acquisition costs were up almost 50% at JDate and 37% at American Singles. American Singles revenue was down 22% on a cost per acquisition reduction of 34%. Read my post on the Spark Networks Q1 2006 financial results for more information.
In Q4 2006, American Singles got hammered, 30% decrease in subscribers. AmericanSingles revenue down 22% to $6.7 million. Take a look at the 4th quarter results.
Recently, 695,000 shares of common stock were repurchased and Spark announced it selected Omniture to drive increased visitor engagement and increase registrations by measuring the performance of their 30 social networking properties. By using Omniture Discover to segment their visitors based on behavioral patterns, Spark Networks will be able to effectively market to each demographic across the company’s portfolio — improving the user experience and maximizing online marketing ROI.
Spark Networks is trading up 15% at $5.63.
