Morningstar | With Its Vast Portfolio of Brands, Match Group Has Become the Leader in Online Dating
On the back of online dating becoming mainstream, the number of Internet and mobile device users increasing globally, and the growth of the singles population worldwide, Match Group with its portfolio of online dating brands has become the leader in this space. We believe the firm has carved out a narrow economic moat, thanks to network effects that continue to drive top and bottom-line growth. Match Group, which is more than 80% owned by IAC/InterActiveCorp, is a provider of online dating products. It has more than 45 brands of online dating sites and/or apps, including Tinder, Match.com, OkCupid, PlentyOfFish, and Meetic. We believe that by creating and acquiring various online dating products, each serving different people in terms of demographics, location, and culture, Match Group successfully created a network effect for its entire portfolio of services that is becoming more mainstream. We estimate the worldwide addressable market for Match Group’s dating business is between $3 billion and $6 billion.The firm’s dating portfolio consists of four of the top five brands in North America. Tinder is the world’s number-one downloaded dating app and has maintained this position even after beginning to monetize the app in second quarter of 2015 by limiting free features and charging its users. The number of paid Tinder users, who are mainly young and seeking casual rather than long-term relationships, has tripled since the monetization strategy was implemented.Growth in Match Group’s users will also drive advertising revenue growth. We believe demand will increase mainly for Tinder ad loads, as advertisers will be able to utilize the valuable user behavior data provided by Tinder to target the app’s millennial users more effectively.We also expect the firm’s network effects to help Match Group further consolidate the technological infrastructure for all its brands, make them more scalable, and streamline its operation more effectively, creating operating leverage.Match Group is a provider of dating products available in over 40 languages to its users all over the world through applications and websites it owns and operates. The company operates a portfolio of brands, including Tinder, Match, PlentyOfFish, Meetic, OkCupid, OurTime, Pairs and Hinge, as well as a number other brands. Through its portfolio of brands, the company provides tailored products to meet the varying preferences of its users. All the company's products enable users to establish a profile and review other users' profiles without charge. Each product also provides additional features, some of which are free, and some of which require payment depending on the particular product.
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