Incorporated: 1998 as MatchNet plc
NAIC: 514199 All Other Information Services
Spark Networks, Inc., is a major provider of online personals worldwide and the fourth largest provider of online personals services domestically. The company owns and operates a network of religious, ethnic, special interest, and geographically targeted online singles communities including: JDate.com, LDS Mingle.com, AmericanSingles.com, BlackSingles.com, and ChristianMingle.com. Spark Networks provides many features on its sites, such as detailed profiles, onsite e-mail centers, real-time chat rooms, and instant messaging services. Revenues come from members' monthly subscriptions. In addition to religious, ethnic, and special interest communities, Spark has versions of its web sites for the Canadian, Israeli, Italian, Greek, British, and U.S. markets.
1997-2000: Matchmaking via the Internet
In 1997, Joe Y. Shapira and Alon Carmel, two Israeli entrepreneurs, launched a web site that they named JDate in the spare room of Shapira's Beverly Hills, California, condominium. They funded it with money from their personal savings. Shapira and Carmel had previously founded two businesses together. The first of these, Video Tape Industries, became one of the largest videocassette manufacturers and duplicators in the western United States. Earlier they had begun Matrix Video Duplication, which they took public on the Tel Aviv Stock Exchange.
JDate evolved in part from Shapira and Carmel's interest in web sites that targeted, as they described it, the "average consumer," Shapira explained in a talk he gave at a Jewish organization in 2004. Around that same time, Shapira was going through a divorce and was having a difficult time meeting other Jewish singles. Talking to friends and other singles, he discovered that they, too, found it hard to meet others who shared their interests and values. "One day, I opened my mailbox and found a postcard from a traditional matchmaking service. A light bulb went off," he recalled in his talk. "I spoke to Alon and we both agreed that there was a real need for a matchmaking service designed for Jewish professionals." The Internet, they decided, was the perfect forum for single Jews worldwide to find their own matches.
JDate grew by word of mouth. In 1998, Shapira and Carmel incorporated their business as MatchNet plc in England. Shapira became the company's chief executive, Carmel its president. They went on to launch a variety of online personals web sites, and their virtual community quickly grew to 32,000 single members worldwide. MatchNet used e-mail as a platform for contact among its members, charging them a single prepaid token for each e-mail correspondence. It marketed its services to singles primarily in the United Kingdom, Europe, and North America. In 1999, the company sold a stake of its business to Endemann Internet AG and, in 2000, it began to trade on the Frankfurt stock exchange.
By 2000, MatchNet included several web sites, among them AmericanSingles, BeMatched in the United Kingdom, DeutscheSingles, FrenchSingles, and EuroSingles. It had a database that grew from 900,000 registered users early in the year to 1.5 million members from more than 150 countries by year's end. DeutscheSingles alone increased in membership from 10,000 at the start of the year to 50,000 by midyear.
Riding the wave of its success, MatchNet signed a software licensing agreement with iFuture to acquire a 20 percent stake in the latter's AstroAdvice.com. As part of the agreement, MatchNet took over iFuture's astrological matchmaking service and consolidated it into its AmericanSingles, EuroSingles, DeutscheSingles, and JDate sites. "Supplementing our current services with astrological compatibility analysis based on iFuture's technology adds a vibrant dimension to our site," Shapira broadcast in a 2000 Canada NewsWire. The company also began to offer singles-oriented group trips.
Revenues shot up alongside MatchNet's growth in members--more than 850 percent during the first half of 2000--to reach $6.8 million. This increase was due primarily to MatchNet's new practice of instituting charges (around $25 per month) for its web-based services in the United States in late 1999. The company also began to invest more in advertising. In late 2000, MatchNet, by then the largest publicly traded online dating service, signed an agreement with Juno Online Services Inc., the United States' third largest provider of dial-up Internet services, to become Juno's exclusive provider of dating and personals content. The partnership included a major marketing campaign that targeted Juno subscribers, online advertising, and a nationwide sweepstakes for a romantic getaway.
Other partnerships with top portal publishers included similar arrangements: Lycos, InfoSpace, and Citadel Broadcasting all had links to MatchNet by the year 2000; EarthLink and YSeek, Inc., a web search portal, added links in 2001. AltaVista added MatchNet to its home page Web Services list in 2002. Homestead, a leading resource for building feature-rich web sites, entered into a partnership with MatchNet in 2000 to add AmericanSingles.com to its list of "elements" that could be dragged and dropped onto a Web site constructed with its software.
2000-04: Acquisitions and Extras to Enhance Competitive Stance
The company also began to grow through acquisitions when it bought San Mateo, California-based doYou2.com, creator of Internet-based anonymous messaging and matching technology in 2000. Focused primarily on teens, doYou2.com allowed its users to share their interests, feelings, and opinions anonymously. If convinced of compatibility, they could then go on to reveal their identity online.
A sudden burst in growth occurred for MatchNet in 2001, when it acquired SocialNet Inc., then the leading online resource for dating, activities, and networking in the United States. It thereby doubled its database to three million users overnight and became the largest publicly traded online dating service in the United States. By midyear, with 3.6 million members, MatchNet was one of the top three online dating and romance companies in the world with revenues of $10.5 million. Over the course of 2002, MatchNet surpassed five million members, and revenues increased 60 percent to $16.9 million.
The company began to look more and more at niche marketing with the addition of 500,000 profiles from MatchU, CollegeClub.com's dating and personals channel in 2002. In 2003, it launched its own CollegeLuv.com and purchased the assets of Point Match Ltd., which included JDate's competitors, JCupid and the leading internet personals service in Israel, Cupid.co.il. This acquisition represented an important step in expanding MatchNet beyond the English-speaking world. The company soon thereafter upgraded its international sites with new features and technology to compare with its U.S. sites.
By 2003, MatchNet, with nine sites, was gaining ground against the industry's two dominant companies, Interactive Corp.'s Match.com and Yahoo Inc.'s personals division. The year saw dating companies stepping up their competition for users, investing heavily in new features, and preparing new rounds of marketing. Effective marketing, in fact, was both the chief means of beating the competition and of achieving profitability, although with low-cost, database-driven applications, the cost of operating a site such as MatchNet's or its competitors' was low. The number of dating sites that Hitwise, the Internet-tracking firm, monitored was up to 611 in January 2004 and reached 836 in early 2005.
As the industry moved "into the first stages of maturity," according to one analyst in a 2005 USA Today article, online personals sites began to court customers increasingly with high-tech extras, such as instant messaging, blogging, video profiles, and live video chat. Some offered personality and compatibility tests. MatchNet had begun several years earlier to look for ways to "[step] up efforts to meet the needs and interests" of its members, according to Shapira in a 2002 Business Wire release. Expanding its technological capabilities, it incorporated MessageBay's video messaging in 2001, which offered users the option of uploading recorded clips of themselves. In 2003, it purchased FaceLink to provide members the ability to create their own photo page on the Internet and link directly to that page from a MatchNet site. In 2005, MatchNet teamed up with E-Cyrano.com, which for a fee would critique a user's profile and suggest improvements.
2004-07: Change of Command
The year 2004 saw big changes for MatchNet. The company started charging for its services in the United Kingdom, Germany, Australia, and Canada. While still free to search and post a profile, members needed to purchase a subscription to communicate with other members. Shapira and Carmel left their respective posts as chief executive and president of the company to become co-chairmen, assuming the responsibilities of overseeing product design and expanding into new markets. "By turning over day-to-day management of the company, Mr. Carmel and I are free to focus on the strategic development of MatchNet's services and initiatives," Shapira announced in a 2004 PR Newswire Europe article. He was replaced by Todd Tappin of Overture Services, a leader of commercial search services on the Internet. Tappin had been with Twentieth Century Fox, News Corporation, and a CPA with Deloitte, Haskins and Sells.
Half a year later, Tappin resigned. He was replaced by David Siminoff, who had held executive positions at Capital Group's Capital Research Unit, one of the world's largest investment management firms, where he managed portfolios in the media and internet technologies sectors.
Under Siminoff, MatchNet reached 220,000 paying subscribers in 2005, a 2.7 percent increase from 2004. Revenues overall grew slightly from $65.1 million in 2004 to reach $65.5 million. JDate experienced a banner growth year, increasing by 9 percent to $26 million. In January, MatchNet changed its name to Spark Networks plc. Later that year, it acquired MingleMatch.
Niche marketing continued in 2006 as MatchNet reached out to various specialty markets. In 2006, JDate organized its Experience Israel, offering the possibility for single Jews to discover their cultural roots and find a spouse at the same time. MatchNet acquired HurryDate and the assets of Stu & Lew Productions, whose December 24th "Schmooz-a-Palooza" brought together young Jews at the House of Blues in Los Angeles.
In addition, there were more organizational changes afoot. On Valentine's Day 2006, Spark Networks' American Domestic Shares began trading on the American Stock Exchange under the ticker symbol "LOV." In 2007, Adam Berger, an M.B.A. from Harvard and former chief executive of WeddingChannel.com Inc. and president of The Franklin Mint, as well as a Spark Networks board member, became Spark Networks' new chief executive. The company reincorporated as Spark Networks, Inc., in Delaware, establishing Spark Networks plc as its wholly owned subsidiary. Common shares of the company began to trade on the American stock exchange.
MatchNet's end year financial report for 2006 described its market strategy optimistically: "During 2006 and into early 2007, [MatchNet] continued to deliver on growth by executing a series of product and feature enhancements, creating an ad sales infrastructure, and closing a number of important acquisitions." According to company perspectives, these steps would set the stage for dramatically expanding Spark Networks' "burgeoning events offerings and leverage [its] vast online network into the offline world" in upcoming years.
Principal Subsidiaries
Spark Networks plc; Doyou2, Inc.; JDate Limited; MatchNet Ltd.; MingleMatch, Inc.; Reseaux Spark Canada Inc.; SN Events, Inc.; SN Services, Inc.; SocialNet, Inc.; VAP AG.
Principal Competitors
Match.com, LP; Fast Cupid, Inc.; Tickle Inc.; AOL LLC; eHarmony.com, Inc.; Friendster, Inc.; Lavalife Inc.; MySpace.com; Various, Inc.; Yahoo! Inc.; Facebook, Inc.
Further Reading
Baig, Edward C., "Love Growing Strong on Web," USA Today, February 14, 2005, p. 1B.
Halkin, Talya, "JDate Weds Zionism with Search for Mr. (or Mrs.) Right," Jerusalem Post, January 15, 2006, p. 1.
Irizarry, Lisa, "The Love Connection," Newark (N.J.) Star-Ledger, October 7, 2005, p. 41.
"MatchNet plc Reports Continued Growth in Membership: Network Features over 6 Million Members with Profiles Worldwide," Business Wire, April 8, 2002.
Morgan, Richard, "A Dating Service Gives a Nod to Jewish Gays," New York Times, January 8, 2006, p. 7.
Tedeschi, Bob, "E-Commerce Report: In Quest for Financial Payoff, OnlineDating Services Are Expanding to Do More Than Find You the Love of Your Life," New York Times, August 11, 2003, p. 5.
— Carrie Rothburd
