Match investors pair up for their date with destiny

Its iconic dating apps changed how people meet, date and form relationships. Now Match Group (MTCH) is brazenly flexing its muscles.

Bloomberg reported Friday that the Dallas company has begun telling its Android customers to enter payments details directly at the Match Group website, avoiding the Google Play store fee.

This is a huge win for Match shareholders.

This isn’t the first time a big developer balked at the 30% fee Apple (AAPL) and Alphabet (GOOGL), Google’s parent, collect from developers for using their application stores …

Epic Games, maker of the popular gaming platform Fortnite, avoided the Play Store altogether last year.

And Spotify (SPOT) is in the midst of a legal dispute with Apple. This music-streaming giant says Apple’s App Store fee is tantamount to an unfair tax. One that makes the Spotify service uncompetitive with Apple Music for iPhone customers.

So, Spotify started encouraging customers to make payments directly in 2018.

It’s the same tactic Netflix (NFLX) is now using. This streaming-media giant has 157 million global customers. Cutting the app stores out of the mix could mean hundreds of millions in savings to the Los Gatos, Calif., company.

Apple made $257 million scraping fees from Netflix in 2018, according to reporting from The Seattle Times.

Epic Games, Spotify and Netflix have one common denominator: scale. Their businesses are so big, they don’t need Apple and Google to succeed.

You can now put Match Group in the same category.


The company bills itself as the world’s leading provider of dating applications. With products in 42 languages and availability in 190 countries, its portfolio is unmatched. In addition to its very popular Tinder, Match’s 45 different properties include Hinge, Match, Plenty of Fish, Meetic, OKCupid, Our Time and Pairs.

For the record, those applications hit everyone from millennials swiping for a date … to middle-aged people seeking relationships … to older singles in Japan, Korea and Taiwan looking for love.

All in, Match had 8.6 million paying subscribers at the end of the first quarter of 2019. That’s up 16% year-over-year. Revenue in the first quarter rallied 14% to $465 million, putting the company on track to record $1.8 billion in 2019 revenue.

In fairness, there have been persistent rumors that Facebook (FB) wants a bigger piece of the dating pie. It’s a natural way for the social media giant to leverage its 2.2 billion global members.

Related post: Native cryptocurrency will supercharge Facebook’s growth

Dating, Facebook’s poorly branded match-making application, is currently in 19 countries. A U.S. debut is scheduled for the end of 2019.

If Match managers are worried, they’re not letting on. The corporate line is they see this as an opportunity to piggyback on Facebook’s marketing muscle. Bringing online dating to the rest of the world should make for a bigger pie.

Mandy Ginsburg, Match Group CEO, told analysts during a May conference call that, 10 years ago, only 3% of dates were arranged online. Today that figure is 30% and the use of dating applications is spreading across the globe at a rapid rate.

The addition of Facebook should speed the adoption of online matchmaking, and the sites/apps that make it possible.

To get ready, Match product managers have been aggressively expanding into Asia-Pacific, with new management hubs in Delhi, Tokyo, Seoul and Singapore.

That’s because half of the approximately 600 million singles worldwide live in that region. Plus, smartphone use is extremely high, and there has been a cultural shift away from arranged marriages.


Tinder, Match’s wildly popular dating app with millennials and Gen Xers, has become a cultural phenomenon in Asia. Without advertising or investment, the app generated tens of millions of downloads.

Only four years ago, Tinder was not even among the top five dating apps in South Korea. Now, the app is ranked first in terms of downloads and active users, according to reporting in the South China Morning Post. And revenue is climbing.

The reporting jibes with data from Sensor Tower in May. The mobile app analytics firm had Tinder as the top grossing non-game app across iOS and Android.

That means the Tinder app took in more dollars than Netflix, YouTube and Pandora.

Sensor analysts pegged the takings at $38.5 million, up 41% year-over-year.

This kind of scale affords Match huge leverage with the mobile gatekeepers. It means the company can experiment with new business models that avoid the 30% fees levied by Apple and Google. It’s a hidden benefit hiding inside Match shares.

The stock trades at 38x forward earnings, and 12.3x sales. Market capitalization is $21.5 billion, following a share price rise of 77% in 2019.

Shares are definitely priced for a lot of good news, but that’s fitting. The outlook for this company is bright as it begins to scale up in Asia, monetize existing brands and exploit its mobile scale to deliver better profits for shareholders.

Based on sales momentum, the stock could trade to $125 in two years, a gain of 65% from current levels. Dating apps and investing profits: Now there’s a power couple we can all fall in love with.

Best wishes,

Jon D. Markman

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