Market swipes left on Match, Tinder as Facebook swipes right on dating
Like an old flame wrecking a first date, Facebook burst in on the matchmaking scene on Tuesday and sent investors in rival apps on a panicked rush for the door.
Shares of Match Group and its parent IAC plunged, wiping some $5 billion off their combined market values, after Facebook Chief Executive Mark Zuckerberg said his social media platform would develop its own dating app to rival Tinder, Match and others.
Tinder became known for users swiping right on their cellphones to indicate interest for a potential match and swiping left to reject someone.
Match fell 22 percent — its largest one-day drop ever — and IAC, which owns more than a fifth of Match, fell nearly 18 percent in its biggest daily loss in about 13 years.
Spark Networks, owner of JDate and Christian Mingle, also closed 4 percent lower. Although analysts said Facebook’s initial foray would not likely be a threat to established dating sites — some of which are highly specialised to cater to specific groups — its heft and deep pockets makes it a concern over the long term to the smaller companies.
Atlantic Equities analyst James Cordwell said there was “significant potential for Facebook to be a big problem for Match,” but one that was dependent on execution over the long term. Facebook brings to the dating table a treasure trove of data on its active users, which are over 2 billion strong. That could potentially allow it to match people more effectively than rival sites with less data at their fingertips.