Facebook dating is coming: What does it mean for other apps?

A stake in Match Group, which owns Tinder, was worth $ 46 at the start of the day on May 1, 2018. At the close of the stock markets, it was $ 36.

The price has now fully recovered, but it is not surprising that some dating companies are looking at the arrival of Facebook Dating with fear. After all, there is a lot of money involved in the dating industry. Tinder is now worth $ 10 billion, analysts estimate. The market value of the entire Match Group, which also has other dating apps, is approximately $ 17 billion.

Roll out Facebook Dating to other countries

Facebook Dating was first tested in Canada, Colombia and Thailand. In late April, it was announced that Facebook was rolling out the service to 14 countries, including the United States. According to insiders, the app will also come to Holland soon.

It is unclear how much money is involved in the Dutch dating industry. Lexa, Relatieplanet, Pepper, 50plusmatch, Match4Me and e-Matching.nl do not disclose their own turnover. “But the total market size for the dating industry is between 30 and 50 million and will increase,” says Relatieplanet.

“In the Netherlands, millions are involved,” says Jasper Jan de Konink, director of e-Matching.nl. It deserves, but according to him is not a gold mine. “A candy producer has more revenue than the entire dating industry combined. In the dating-related sectors such as catering, more money is made than the platforms themselves earn.”

Where many dating websites started small, they are now often part of a larger group due to acquisitions. For example, Lexa is owned by Meetic, which has dating sites all over the world. And Meetic’s parent company is IAC, which also owns Match Group. It’s the owner of Tinder. Thus, all the money earned on dating apps and dating websites disappears, partly in the same pockets.

De Konink owns two dating sites: 50plusmatch.nl and e-Matching. According to De Konink, e-Matching in particular has lost users due to Tinder. “We actually had to lose some market share. Young people often will not pay for dating apps if they do not have to. But because older people have started dating more online, revenue has stabilized and even increased again.”

Extra support

The owner of the site does not expect the users of its sites to massively switch to Facebook Dating when that app is available. “It will have some effect, but we also offer extra support. You can see that the older target group in particular needs it. They call us to ask why the other sex does not answer their calls, for example checking we saw if they had their profile in order. “

According to Statista, 25 percent of the singles in our country use Badoo. Next, Lexa (18 percent), Happn (15 percent) and Relatieplanet (11 percent) are the biggest players.

The Relationship Planet was founded in 2002 by Chris van Tuijl. In early 2006, Telegraaf Media Group (TMG) took a 70 percent interest in the website. The purchase price is a secret, but the equity in Van Tuijl’s personal portfolio increased from 6.7 million euros to 12.8 million euros, according to Quote. Currently the website has 76,781 active members.

Willem van Grasstek, business owner at Relatieplanet is not afraid of Facebook Dating. “Tinder’s influence on our business was also limited. Tinder mainly added an entertainment element to the dating industry.”

Security

The relationship plane also expects to be able to provide more ‘added value’ in relation to Facebook Dating, including within search and match functionalities. Van Grasstek: “Dutch daters believe that security is very important, and Facebook has just fallen short in that area.”

The competitor Lexa, which is part of Match Group, does not want to provide any user data, but it would be half a million users. The question of whether the page was influenced by the emergence of Tinder also remains unanswered. Lexa also states that it offers something other than Tinder.

On most dating sites, the text is central and users upload only one image. It’s different on the dating site Pepper, where singles publish a collage of multiple photos. So image is just as important here as it is with Tinder.

According to director Anneke van Gurp, however, Pepper has had some problems with the arrival of Tinder. “We do not see the great effect in the numbers.” How much Pepper is worth is not known. The dating site was first owned by RTL Ventures, RTL’s investment arm. In 2016, Pepper was sold to MatchMedia, also the owner of match4me and 50plusmatch. How much the company has paid for Pepper is unknown.

Almost all dating sites have one thing in common. The basic service is free, but if you want more, call the cashier. This way, you can almost always create a profile for free and view other profiles for free. If you want to chat with the possible love of his or her life, you will often need to upgrade to a payment account.

However, this is not the only source of income for dating sites. The average dating site knows as much about you as Google does.

In late 2017, French journalist Judith Duportail, based on European privacy law, asked Tinder what information the service had from her. She was given 800 pages of information describing the 1,700 Tinder posts she had written in four years. “My hopes, fears, sexual preferences and deepest secrets, Tinder knows everything,” Duportail said. By accepting the privacy terms, the app was allowed to retain its data.

What is that information worth?

Information like dating apps is worth money, says Frans Feldberg, professor of data-driven business innovation at the VU University in Amsterdam. Just as machines are on the balance sheet of assets and liabilities in a factory, data should theoretically also be valued on the balance sheet, he believes. “The problem is that it is very difficult to value the data. An address can be worth one euro for one organization, three euros for another.”

In theory, a dating website can use the data to make personal offers. “You know what kind of restaurants someone likes, what theatrical performances they want to go to. You often even have information about voice behavior. If apps could unlock that data and they could put the data on a balance sheet, big dating sites might be tons or millions worth more then now.

But they can not just sell the data of the law. You may only use the data for the purpose for which it was registered: to find a potential partner. “Even though it’s a gray area. People may still accept that you recommend a restaurant, but if you use the data for other things such as predicting voting behavior, people will probably turn their backs on you. Then you turn your primary business model around.”

Feldberg does not believe that Dutch dating sites sell our data on a large scale, simply because it is not permitted by law. However, he does not rule out that this will happen on the basis of a ‘vaguely worded passage in the conditions’.

Henk Volberda, Professor of Strategic Management & Innovation at the University of Amsterdam, is more steep in terms of data resale. “It would be very naive to think that no dating site will resell your data. All platforms have the same feature. They are not very open about what they do with the profiles and the data. I think commercial parties are based on Tinder- profile data. may place certain pop-ups or banners on it. “

800 pages of information

Dating site users are not aware of how much information they are giving away, Volberda says. “It goes beyond just choosing your favorite music. With smart algorithms, they can even analyze your facial expression and draw conclusions from it. There’s a huge amount of data that those apps can sell.”

When Match Group went public in 2015, it hoped to raise $ 100 million. The company made a profit of 148 million euros in 2014. “It’s getting a lot more now,” Volbeda thinks. “In recent years, many more paid services have come to those sites, so the value has increased. The same goes for Tinder. The base is free, but you can also upgrade to Tinder Gold and Tinder Plus.”

Volberda: “It’s not surprising that Facebook comes up with its own dating site. They also see that Tinder is successful. Tinder now has 1.2 million users in the Netherlands and 59 million worldwide. It’s huge. The company is estimated to be ten billion dollars worth But if a competitor comes along, Tinder’s value could drop quickly.You’ve seen what happened to Uber’s stock, for example. can also fall quickly. “

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