MARKETWIRE - Mar 10 - Revenue for the Q4 '10 was $10.1M, a decrease of 9% compared to $11.1M for the Q4 '09, and an increase of 2% compared to $9.9M in the prior quarter. Revenue for the full year of 2010 was $40.9M, a 10% decrease YOY. Average paying subscribers in the Q4 '10 were 160,744, a decrease of 5% compared to 168,646 for the Q4 '09 and a 1% increase compared to 158,422 for the prior quarter. For more details, download Spark Networks' Financials PDF or or visit the link on the side bar under 'FINANCIALS'.
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So, let me get this straight: according to http://www.spark.net/press/Q42010EarningsRelease.htm, in Q 4 2010 Spark made $10.1M in gross revenue and a measly $600K in net profit? That’s a 6% return, in an industry where average return is 25-50%+.
Let’s break this down: $6.9M of that revenue was from JDate, or 68% of total revenue. That site has always been massively profitable for Spark. At least 80% of that $6.9M was likely profit, or around $5.5M.
Yet, total profit for Spark was $600K. Hmmm. That means that they spent a whopping $4.9M of their JDate profit to massively subsidize *the other 25 or so* of their singles properties.
If you look at their prior statements (going back years and years), you'll see this same subsidizing going on.
What I don’t get is why the investors over at Spark permit this wholesale flushing-JDate-profits-down-the-toilet nonsense quarter after quarter after quarter, year after year after year.
I pity the investors.
Meantime, the successful players continue to rack up gi-normous profits, as they have actual business sense and don’t subsidize consistent money-losers.
Posted by: F Smalley | Mar 17, 2011 at 11:46 AM
OUCH! I'm glad we're not public - none of anyone's business how we are doing. And, with no outside investors, don't have to put up with disgruntled people getting upset at us.
Mark, your thoughts on the dating companies you've invested in?
Posted by: Sam Moorcroft, ChristianCafe.com | Mar 19, 2011 at 11:37 PM
I invested and exited, ages ago. Otherwise, under full disclosure, I would have mentioned that I held stocks. ;-)
Posted by: Mark Brooks | Mar 20, 2011 at 03:10 PM
Wasn't it Spark and Match (and maybe some others) you owned? How come you exited? Lack of confidence in them? Or, did you make a quick buck, then sold?:)
Posted by: Sam Moorcroft, ChristianCafe.com | Mar 20, 2011 at 10:20 PM
I picked up Spark Networks, made bank, and exited at the peak. I didn't get around to picking up Match/IAC, in the end. I bought a new home so moved most of my investments into the new home. Now I'm investing in Fool.com recommendations. Also in European companies with international, especially Asian interests.
Posted by: Mark Brooks | Mar 21, 2011 at 08:52 AM