Parent of a Dating Site Looks for Right Match
By Andrew Ross Sorkin
Wanted: Single, dot-com Yenta seeks ambitious Mr. Big with deep pockets for a long-term relationship.
The parent company of the popular Jewish online dating site JDate has put itself up for sale, people close to the auction said Thursday, and is already in talks with a several prominent media companies.
The owner of JDate.com, Spark Networks, which owns dozens of online personal sites aimed at religious, ethnic and other special interests, is in early talks with suitors that include Yahoo, eHarmony, Barry Diller’s IAC/InterActiveCorp, which owns Match.com, and News Corp., these people said.
Shares of Spark have jumped more than 20 percent in recent weeks. Its shares closed Thursday at $4.90, giving the company a market value of $131.4 million. Analysts suggested that a suitor might pay as much as $185 million for the company. However, some industry executives have questioned the company’s future growth prospects; its revenues only grew 5 percent from 2005 to 2006.
Online dating sites have exploded in popularity in recent years as both the younger and older generations have flocked to them and other social networks to meet people. Social networks generated nearly $650 million a year in sales.
But growth has slowed after annual gains of more than 70 percent in the early part of the decade. Jupiter Research, an Internet consulting firm, said the market grew 10 percent in 2006, to $649 million, and is projected to grow 8 percent a year until 2011.
For Spark, which was started in 1997 in the home of Joe Shapira, a sale would be the culmination of years of growing the company by starting and buying Web sites like AmericanSingles.com, BlackSingles.com, ChristianMingle.com and LDSMingle.com, among others.
According to comScore Media Metrix, Spark had 2.45 million unique visitors in November 2007, ranking it No. 4 among personal sites behind Yahoo Personals, Match.com sites and Singlesnet.com. Spark reported $6.56 million in net income with revenue of $68.85 million for 2006.
The company has hired AGM Partners, an investment bank focused on media companies, to run the sale, people briefed on the auction said. A spokesman for Spark, Gail Laguna, did not return calls for comment.
JDate has become part of the vernacular on sitcoms and programs like Jon Stewart’s “The Daily Show.” It is widely considered the model for online personal sites.
“JDate is the best example of a successful niche dating site on the planet,” said Mark Brooks, who follows the industry and is author of the blog OnlinePersonalsWatch.com.
Originally published by The New York Times Media Group.
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