MARKETWATCH / WSJ - July 20 - Avid Life Media, which owns Ashley Madison, wanted to raise $200M in an IPO. A recent data breach may hurt the site’s chances of launching a successful IPO anytime soon. "They've hinged their entire existence on privacy," says Mark Brooks, a dating-industry analyst and the editor of Online Personals Watch. "It's definitely going to affect their IPO plans. It’s going to reduce the value of this company. They're going to see their conversion rates hit, their attention rates hit, and see some people leave. People prize their privacy on online dating sites. This is compounded 1,000 times on AshleyMadison.com over a typical dating site." Other dating site companies with IPO ambitions such as The Match Group, will be doubling down on their security measures, he adds. Ashley Madison said it has now secured the site, called the hack an act of "cyberterrorism" and apologized to its users.
AshleyMadison launched in 2001. "It has helped move adulterers from traditional dating sites", Brooks says. "It's done a good job of cleaning up other sites," he says. Another thing that can affect the IPO are complaints about fake profiles on the site. Ashley Madison has little direct competition. "The entire business is built on the premise that few will follow," Brooks says. "It's simultaneously brilliant and despicable. It gets people talking, which is also good for business."
Biderman acknowledges that there are a lot of hurdles to overcome before an IPO. He says he loves being the CEO of a private company. Brooks says, the site will be working hard to restore confidence in the site among users and potential investors. "They'll also work on search engine optimization over the next six to 12 months to make sure that other more positive stories about Ashley Madison appear when you Google the site," he says. "There’s plenty that can be done. If someone is prepared to spend big money, they can have a story almost disappear by producing more interesting content."