Match Group: Facebook should stick to data, not daters
Match Group, the online dating kingpin behind brands like Tinder, Match.com, and OKCupid, isn’t worried about Facebook’s entry into its market. The social media giant said it was planning to encroach on Match’s personal space at its F8 conference last May, and investors wobbled. Match’s share price plummeted – but the company was never worried, and investors regained their composure shortly thereafter. Over the weekend, Match’s CEO, Mandy Ginsberg, spoke to tech publication Recode and explained why.
Match Group’s share price has appreciated by 26% so far this year
Source: Yahoo Finance
According to Ginsberg, there are two big reasons that Match isn’t worried about Facebook’s plans to get into the matchmaking game. First is age. She said:
“Tinder’s our big growth engine, and Tinder tends to skew very young, so 18 to 25. Facebook does not skew that young in general. If you’re a 23-year-old and you’re going to be using two or three apps, definitively, we think you’re going to use one of our apps, most likely Tinder.”
Ginsberg is right that Facebook’s core demographic is aging, but that’s not the only reason the company will struggle to compete with Match. She told Recode that 5% “or less” of Match’s revenue comes from advertising – whereas Facebook’s business model is famously built around it. Of course, an advertising business model necessitates the sharing of personal data – and Ginsberg doesn’t think people will want to share their most intimate secrets with Facebook. She said:
“People have to come to us and realize that we’re not going to expose their information, we’re not going to sell their information, and that they have to feel confident because dating is highly, highly personal. It used to be, prior to last year, that if you joined Tinder, you had to join through Facebook. When given the option for new users coming through, 75 percent of people said, ‘I’d just rather use my phone and not use Facebook,’ even though it was the second option and Facebook was the big option on top. So it was clear that they wanted to separate their dating world from their Facebook world.”
Dominion holds Match Group in its Global Trends Ecommerce Fund.
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