Coverage: Match.com going public
Your lack of love could make someone a lot of money. Barry Diller’s IAC is taking public its online dating services. The company owns several online services and it’s planning to cash in as people flock to the sites.
The Wall Street Journal had these details in a story by Georgia Wells and Lukas I. Alpert:
Barry Diller is going public with his love for dating websites.
The media tycoon’s IAC/InterActiveCorp on Thursday followed through on a long-expected plan to pursue an initial public offering of Match Group, a division that houses the dating sites and apps Match.com, Tinder and OkCupid.
IAC also named Joey Levin, who oversaw the conglomerate’s search business, as its first chief executive since 2013, and said finance chief Jeff Kip is resigning.
The IPO plan, which is expected to be completed in the fourth quarter, comes as the market for dating sites in the U.S. is booming.
The services are expected to rake in $1.17 billion in revenue this year, while dating apps are expected to pull in $628.8 million, both up nearly 10% from 2014, according to the research company IBISWorld. Match Group has about a 22% share of that market.
Chad Bray wrote for The New York Times that IAC had been building its media portfolio for years:
“The Match Group is poised for substantial growth in the coming years,” Mr. Blatt said in a news release. “The dating industry has come a long way since its inception, but the category remains underpenetrated.”
IAC, based in New York, includes a variety of websites and online media under one roof. Its brands include The Daily Beast and Vimeo, and it posted revenue of $3.1 billion in 2014.
The company moved aggressively to acquire dating websites in the last decade. In the last year, it added the fitness website DailyBurn and the Princeton Review, the test preparation and college admissions services company, to its Match Group business. The Match Group accounted for $239.2 million, or about 30 percent, of IAC’s revenue of $772.5 million in the first quarter.
USA Today’s Nathan Bomey pointed out that Diller still has a lot of influence over the company given his ownership stake:
IAC said The Match Group would issue less than 20% of its shares when it completes its IPO in the fourth quarter. IAC will retain control of the rest of The Match Group, which will continue to be led by Chairman Greg Blatt and CEO Sam Yagan.
The company also today appointed Joey Levin, formerly CEO of its Search & Applications unit, as CEO of IAC.
Meanwhile, IAC Chief Financial Officer Jeff Kip is resigning “to spend more time with his family in Boston and to pursue other interests,” IAC said in a statement. He will stay with the company for a short time while it searches for a new CFO.
“Under the superb leadership of Greg Blatt and Sam Yagan, we want to take the step of offering the public the ability to own shares directly in this singular area of Internet activity,” Diller said, crediting The Match Group with fueling a quadrupling in value of IAC’s stock price over the last seven years.
Diller, who serves as chairman, controls more than 42% of the voting shares in IAC, giving him significant influence over the company’s direction.
Seith Fiegerman wrote for Mashable that the company should be more careful in its word choices:
After the IPO, investors will be able to buy stock in the company, although the ticker symbol is yet known. Ticker symbols are the short, three-to-four letter symbols that represent major companies on stock exchanges.
Highly desirable ticker symbols related to romance are already taken. Southwest Airlines owns LUV, LOV is Spark Networks and HRT is held by Arrythmia Research Technology. DATE, on Nasdaq, belongs to Jiayuan.com, the largest online dating site in China, and HOT represents Starwood Hotels and Resorts.
KISS, however, is available.
The Match Group is part of IAC/InteractiveCorp, the $6 billion media conglomerate that is run by brash, bald executive Barry Diller.
The dating sites are already a powerful combination. The combined revenues of all the companies in the new Match Group accounted for nearly one third of IAC’s overall revenue in the most recent quarter. They’re also growing rapidly, surging 13% year-over-year in the most recent quarter to about $239 million.
The company announced the move with some unfortunately graphic phrasing.
“The dating industry has come a long way since its inception, but the category remains underpenetrated,” Greg Blatt, chairman of the Match Group, said in a statement.
Apparently the lovelorn are a good market. The growth in dating sites, and the ads they sell to promote them, will continue to be a good business for shareholders if growth holds. Diller certainly is cashing in. Here’s hoping investors love it just as much.