Years ago, back in the wild-west days of Facebook, companies like Zoosk and Are You Interested were able to grow like weeds by taking advantage of Facebook’s then quite lax approach at allowing viral marketing on people’s walls.
Over time, Facebook clamped down viral marketing opportunities and instead began forcing companies to buy advertising instead. The science of K-factors and virality soon gave way to companies managing Facebook ads just like they had been on Google.
To fuel growth, Zoosk closed a $30 million round of funding in late 2009, bringing total financing at that time to $40.5 million. Two years later, and Zoosk is back talking with venture capitalists, hat in hand, asking for $50-75 million. The new financing will help Zoosk pay for more marketing and international expansion. The company operates a dating community of more than 50 million users in over 60 countries and it recently extended a TV ad campaign from the United States into the UK and Canada.
I don’t understand why Zoosk says they have 50 million users, when they have 15.2 monthly active users on Facebook. There is no way they have 35 million users on their website. These aggregate number of profiles statistics are exactly what got Match into hot water, forcing them to ask affiliates to stop mentioning numbers of profiles and daily signups. I wish dating sites would agree to use monthly active users as a standard for engagement. If you haven’t logged into a site in a month or two, you’re not active and few people see you in search results.
Regardless of how many they currently have, Zoosk needs an enormous infusion of fresh cash to continue acquiring users. Zoosk heavily promoted the fact that it was on track for a $90 million run rate this year, but this was most likely based on increased ad spend during the peak Valentine’s Day season.
Zoosk should talk to Friend Finder Networks, which is $450 million in debt. Full details.
