Match.com announced on Thursday it's signed an agreement to acquire Singlesnet. Terms of the deal were not disclosed.
It's an interesting purchase for Match.com. In one way, the acquisition makes sense - acquire a competitor company. But in this case, Singlesnet's traffic has been in decline. Greg Blatt, CEO of Match.com admitted in a statement,
"While Singlesnet's traffic is currently in decline, we believe that by applying our category expertise we can reverse that trend, increase the site's profitability and improve the overall user experience. This is more of a value acquisition than a strategic one, and Singlesnet will predominantly be run as a standalone business."
At the same time, Singlesnet has been around since 1998, and built a decent amount of traffic and users. Blatt argued, "the addition of the site's considerable traffic to our existing aggregation of traffic in this single category should open new monetization opportunities for Match.com's collective portfolio of domestic online dating brands." According to comScore, Singlesnet saw 3 million unique visitors last month, while Match.com saw 6.1 million.
Match.com, which is owned by IAC, has made prior acquisitions. It purchased People Media back in July of 2009 for $80 million. People Media owned and operated 27 dating sites at the time, all of which Match.com scooped up.
Along with the acquisition, Adrian Ong who joined Match.com from Soulmates Technology, another company acquired by Match back in 2002, will assume responsibility for Singlesnet.
In the end, its another move to grow Match.com's network in a time where it's facing some major competition including dating sites like eHarmony and PlentyofFish.
Online daters belong to 3 or 4 online dating sites at the same time, most probably a great percentage of Singlesnet users are now using Match / Chemistry or they had used Match / Chemistry in the past.
Perhaps Match acquired SinglesNet due to the pressure of the CEO to show any kind of success, show achievements, show milestones during his tenure.
When Jack Welch was the CEO at the General Electric, he lasted 20 years bolted to his chair.
Now CEOs are lasting 25 / 30 months, not years, so the pressure to show progress / success is quite high and furthermore, they receive the "heritage" (mistakes / pitfalls) from the previous CEOs.
During the tenure of Tim Sullivan, Match entered the compatibility matching era with WeAttract's test.
During the tenure of Jim Safka, the IAC (Match) launched Chemistry (the last innovation at Match, it was during 2005).
During the tenure of Thomas Enraght-Mooney, the IAC (Match) acquired 27% stake in Meetic but lost the war in Europe.
During the tenure of Greg Blatt, the IAC (Match) acquired PeopleMedia's Communities and SinglesNet.
IAC bought PeopleMedia for USD 80 millions in cash last July 2009, with 255,000 paid subscribers.
The IAC had paid USD 313.73 per subscriber.
My personal estimation is:
SinglesNet Worldwide 2009 annual revenue of USD 80 millions (20 by ads from Google and 60 from subscribers) 420,000 paid subscribers * 12 months * USD 12 Monthly Average Revenue per Subscriber.
SinglesNet Worldwide 2010 projected annual revenue of USD 51 millions (15 by ads from Google and 36 from subscribers) 250.000 paid subscribers * 12 months * USD 12 Monthly Average Revenue per Subscriber.
If the IAC bought SinglesNet for USD 50 millions, and if it has only a database of 250.000 paid subscribers, the IAC had paid USD 200 per subscriber, but as SinglesNet is a low quality online dating site, I seriously doubt the IAC could recover the invested money.
Regards,
Fernando Ardenghi.
Buenos Aires.
Argentina.
ardenghifer@gmail.com