WIRED - Apr 11 - Could a site that’s just 20 months old with no revenue model to speak of really be worth $5 billion? The answer was no. Shortly after Bloomberg reported the story Sam Yagan, CEO of IAC’s Match Group, told Forbes while he could confirm a deal was made, “this valuation is nowhere near the truth.”
Tinder eliminates the fear of rejection. “Tinder’s really doing something that has been the Holy Grail for online dating: it becomes fun,” says Mark Brooks, a consultant to the Internet dating industry. Match.com, Brooks notes, has reached a point at which it can only really grow through acquisition or by targeting audiences that would never join dating sites to begin with. Tinder users, many of whom would scoff at “real” online dating, are one such audience. “IAC’s not valuing Tinder based on what it’s worth. They’re valuing it based on what they’ll lose if they don’t own it,” says Brooks. “If Tinder can own mobile and own the younger demographic, then IAC is owning the future with Tinder. It’s an international phenomenon.”
This post also appears on InternetDatingInvestments.