Online Personals Watch: News on the Online Dating Industry and Business

Lessons Learned From Starting Zoosk During the 2008 Recession

ENTREPRENEUR - APR 10 - Shayan Zadeh and Alex Mehr co-founded the online dating company Zoosk during the 2008 recession. They were running it for 10 years before selling it for ~$300M. They now lead an online retailer Dressbarn with their business partner, Tai Lopez, and invest in or advise other ventures.

Q: What are you more skilled at than most people in the world?
Shayan Zadeh: Starting Zoosk during the 2008 economic collapse taught us many lessons for the current COVID-19 crisis. Most people are shell-shocked during a crisis and don't take action. We utilize data to make quick decisions and optimize businesses. With this mentality, you can quickly spot opportunities, test ideas, experiment and pivot while keeping a lean team.

Q: What was your biggest, most painful failure?
Alex Mehr: We started Zoosk as a market research tool. We struggled to gain traction until we stumbled upon the idea of doing online dating differently. So we pivoted, but it wasn't easy. Remove your ego, acknowledge your mistakes and identify a solution.

Q: What's the biggest common leadership mistake?
Shayan Zadeh: Overplanning. Very few people predicted the ramification of COVID-19. It's easy to get analysis paralysis, especially now. Get out of overthinking, make a move, get feedback and adjust as needed.

Q: How do you prevent burnout?
Shayan Zadeh: A solid support network is critical. Carve out time for yourself and your family.

Q: What are you working on right now?
Alex Mehr: Laying the foundation for Dressbarn's growth. We're also focused on our team. We have three offices across the country and contractors overseas. Decentralization with virtual working has its challenges, but it's working and becoming the standard out of necessity due to current events.

See full article at Entrepreneur

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Today Is the Busiest Day of the Year

ZOOSK - Jan 5 - Today is "Dating Sunday", first Sunday in January which is the busiest day of the year for online dating. Dating app Zoosk is anticipating that the number of messages sent in the US alone will hit the 1.5M mark. For singles looking to truly make the most of the day, the best time to get online is in the evening. Women, in particular, experience the biggest activity boost. In 2019, women's activity uplift was double that of men's on Zoosk. Zoosk's CMO Luciana Telles says that it comes down to perfect timing. She explains: "Dating Sunday falls during a time period when singles are extra motivated to look for online connections. It's the first weekend after New Year's Eve, which means that people have not only set themselves New Year's resolutions, they've had a few days to think about how to put them into practice. Additionally, it's about 6 weeks out from Valentine's Day, meaning that singles who spark something on Jan 5 have plenty of time left to lock down a date for Feb 14."

See full article at Zoosk website

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This Is the Hottest Time of Year for Online Dating

MARKETWATCH - Dec 31 - For many singles, the holidays are the loneliest time of year and, in the New Year, the $3B dating industry sees a surge in users. Zoosk typically sees a 20% jump in users in the first two weeks of the year and eHarmony sees a similar increase in mobile registrations since the holidays. Grindr usually experiences a 30%-plus increase in users over the holiday season. Match.com and OKCupid also see an uptick between Christmas and Valentine's Day. "Many singles sit around the family dinner table during the holidays and think, 'Maybe it would be better to have a partner," says Mark Brooks, a dating-industry analyst and the editor of Online Personals Watch. "That's when they start hitting dating sites in droves and go on dates before the indigestion sets in."

by Quentin Fottrell
See full article at Marketwatch

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Former CEO of Zoosk and Tai Buy Dressbarn

OPW - Nov 8 - Alex Mehr co-founded and was CEO of Zoosk. He's teamed up with Tai Lopez, who also ran a dating company in the past, to acquire the distressed womens clothing company Dressbarn which has annual sales of $740m and 600 stores, and was started in 1962. They will move the HQ from New Jersey to Los Angeles. See FB video link.

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Top Dating News - Match, Zoosk Layoffs and London Dating Conference

OPW - Oct 1 - Here's the top dating news in ~2 minutes. Subscribe to Two Minute Tuesdays (TMT) on Youtube (and turn on notifications) or to the podcast on Breaker, Google podcasts, Spotify, Anchor.

Zoosk to Make Major Layoffs and Exit City

SF BUSINESS TIMES - Oct 1 - Zoosk is facing two massive rounds of layoffs this year and next, before its German-based parent company Spark Networks moves the operation out of San Francisco. Spark Networks acquired Zoosk earlier this year in a deal valued at $255M. The company wrote in a letter to shareholders that it plans to slash 66% of its workforce by the end of this year. It will then institute another round of layoffs to cut 80% of the workforce by April, with the company fully exiting San Francisco by the end of June as a cost-cutting move. It is not clear how many employees currently work for Zoosk. However, in 2017, Zoosk had 93 employees.

by Dawn Kawamoto
See full article at SF Business Times

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Open Letter to the Shareholders of Spark Networks

BUSINESS WIRE - Sep 30 - We have closed our largest acquisition (Zoosk) to date which has accelerated our expansion in North America. Shares of Spark have lost more than a third of their value thus far in 2019 and over 50% since the deal closed on July 1, 2019. The losses are largely the result of concentrated share sales by a minority of our shareholder base and not the result of financial or operational under-performance. Since the close of the Zoosk transaction, ~5M Spark shares have traded, representing 20% of our total shares outstanding. Spark Networks is active in the market of serious relationships. Through the acquisitions of Jdate, JSwipe, and Christian Mingle, Attractive World in France, and Zoosk, the company has quadrupled its revenue from €60M in 2015 to €250M on a pro forma basis in 2018.

Our strategy:

• Phase 1: Reach critical scale to unlock profitability potential
• Phase 2: Consolidate the serious dating segment and build a profitable core
• Phase 3: New Growth Initiatives

See full article at Businesswire

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Spark Networks Closes Its Deal to Acquire Zoosk

CHEDDAR - Aug 3 - Spark Networks SE became the second largest dating company in North America after closing its deal to acquire Zoosk. Jeronimo Folgueira, CEO of Spark Networks, said: "With the acquisition of Zoosk we became now almost three times bigger than we used to be. So, that unlocked all the potential being really large in this market."

See full article at Cheddar

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Dating Industry Executives Discuss Best Practices in Safety

OPW - July 2 - Senior executives from some of the largest dating companies in the industry participated in a panel discussion via webinar to examine the current state of online safety in the dating space and to outline their extensive operations for protecting their users as much as possible from inappropriate content, financial scams, or potential acts of violence.

The webinar, "Online Safety in the Dating and Social Entertainment Market", was hosted by Northland Capital Markets. Participating from the dating industry were Geoff Cook, CEO of The Meet Group, Casey Burton, Director and Senior Counsel at Match Group, and Jeronimo Folgueira, CEO of Spark Networks.

Representing the panel from various safety and online standards organizations were Larry Magid, CEO of Connect Safely, Stephen Balkam, CEO and Founder of the Family Online and Safety Institute, and George Kidd, CEO of the Online Dating Association.

"We put safety at the core of everything we do," said Geoff Cook, CEO of The Meet Group. "Our users are here to interact and connect – and we think the goal of a safety operation is to promote a safe environment free of bullying, hate speech, and abuse to encourage making meaningful connections."

Topics covered during the discussion included: the current state of online safety, content moderation and law enforcement, working with the app store partners, how technology can help users feel safer, and strategies for building a safer online community.

While safety will always be a major focus in the dating industry, Larry Magid, CEO of Connect Safely, wanted to set the record straight in two specific areas.

"One observation is that between the early 1990s and the mid-2010s, while Internet usage was on a steep rise, violence, both against children and sexual violence in general, has gone down," said Magid. "So anybody who wants to correlate online dating with increased sexual violence is actually looking at the numbers in exactly the wrong way. So while I can't claim data that shows that online dating has made things safer, I can say that during the period that online dating has risen, violence has gone down."

"The other thing to understand is that nobody can guarantee 100% safety on anything, whether it's food safety or transportation safety, or safety using tools," he added. "Nobody can ever say with absolute certainty that nothing bad is going to happen. What we can do is have best practices in an industry (like online dating) – and we can have consumer education."

See the full webinar

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Spark Networks Closes Its $258M Acquisition of Zoosk

TECH CRUNCH - July 2 - Berlin-based Spark Networks, the owner of Christian Mingle, Jdate, LDSsingles, Silver Singles, JSwipe and others, has acquired Zoosk for a combination of cash and stock. The deal values Zoosk at ~$258M. Spark says it will issue 12,980,000 American Depositary Shares (ADS) to former Zoosk shareholders valued at $153M based on the closing price of Spark ADS of $11.78 on June 28, 2019. Zoosk has for a long time struggled to compete against Tinder. A few years ago, the company laid off a third of its staff and even had to call off its IPO. According to data from Sensor Tower, Zoosk has generated worldwide in-app revenue of $250M and has seen 38M downloads since January 2014. In Q1 2019, Zoosk revenue was flat at $13M, the firm also says. Tinder revenue, by comparison, grew 43%. Zoosk's current CEO Steven McArthur is departing Zoosk following the deal, but will join Spark's board of directors.

by Sarah Perez
See full article at Tech Crunch

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Spark Nearing Zoosk Close, Sets EBITDA Target

SEEKING ALPHA - June 19 - Spark Networks targets adjusted EBITDA of $50M in 2020. The company says the California Department of Business Oversight granted a permit allowing Spark to issue securities in exchange for the outstanding Zoosk securities. The permit followed a hearing that was the last major milestone in the Zoosk purchase. The acquisition is expected to close on July 1. Spark shares are up 2% to $10.80.

by Brandy Betz
See full article at Seeking Alpha

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Spark Networks SE Shareholders Approved Increase in Share Capital

PR NEWSWIRE - June 5 - An Extraordinary General Meeting of Spark Networks SE was held on June 3 in Berlin, Germany. Resolutions were passed with 99.9% of the present votes in favor - a resounding endorsement of the acquisition of Zoosk, which upon closing is expected to make Spark the second largest dating company in North America. For the purpose of acquiring Zoosk, the Meeting resolved to issue new shares to Zoosk shareholders in exchange for their Zoosk shares.

See full article at PR Newswire

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'Twitter' Tax Break in San Francisco Ends

BLOOMBERG TAX - May 16 - San Francisco's eight-year-old tax break to encourage tech companies to locate in the city - a.k.a the "Twitter tax break" - is ending on May 20th. The tax break saved businesses $70M since San Francisco enacted it. The climate for tax giveways has changed dramatically, with emerging tech companies blamed for everything from rising housing prices to clogged city arteries. Over the last month the average San Francisco home price was $1.4M, up 1.7% from last year. That's nearly double the $665K median sales price in the Q1 of 2012. Online dating company Zoosk took advantage of the break in exchange for providing internships, $10K to a neighborhood nonprofit, and tutoring, in addition to patronizing local restaurants and bars, its agreement said.

by Joyce E. Cutler
See full article at Bloomberg Tax

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Spark Networks to Acquire Zoosk

PR NEWSWIRE - Mar 22 - Spark Networks today announced its entry into a definitive agreement to acquire Zoosk. With the addition of Zoosk, Spark will more than double in size and the combined business will be considerably more valuable than the two stand-alone entities. In 2020, Spark expects Adjusted EBITDA to exceed $50M. Approximately two-thirds of the combined company's revenue will be generated in North America. Spark will acquire 100% of Zoosk's shares with a combination of cash and stock valuing the company at ~$255M based on the closing price of Spark Networks stock on March 20, 2019. The transaction is expected to close early in Q3 2019.

See full article at PR Newswire

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3 Things You Can Learn From Gen Z About Online Dating

MONEYISH - Sep 30 - Dating app Zoosk recently analyzed ~5.7M profiles and surveyed 4K daters on the site, only to reveal that the youngest generation of daters, Gen Zers (those currently between the ages of about 8 and 22), might have a few lessons to teach the rest of us.

• We should be open to meeting people even if they don't check all our boxes. Indeed, Gen Zers are the least picky daters and swipe or say yes to 33% of the potential matches they're presented, which is 15% more than millennials and 20% more than Gen Xers and baby boomers.
• Anyone can make the first move. The majority, 59% of Gen Zers are indifferent about whether a man or woman makes the first move online, which is 2% more than millennials, 8% more than Gen Xers and 7% more than Baby Boomers.
• Approach dating casually like Gen Z does, so you don't put so much pressure on yourself to make the date perfect. Gen Zers are more likely than other generations to opt for simple coffee dates instead of drinks or dinner, the survey found.

by Alisa Wolfson
See full article at Moneyish

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Summarized by the IDEA team