What Happens To Tinder Once Facebook Starts Dating?

With Facebook getting dating app, Tinder which was dependent on Facebook’s users, now faces competition.

Tinder is largely dependent on Facebook users for its app. 

(Photo: iStock altered by The Quint)

If the way the stock price of Match Group Inc, Tinder’s parent company, plunged the moment Facebook CEO Mark Zuckerberg said the social networking giant is introducing a dating feature, one would think it was as if Facebook just dumped Tinder.

But if you think about it, in a way it has.

Listen to the story instead:

Tinder’s parent Match Group’s stock was down 22 percent after Facebook’s dating feature announcement. (Photo: Nasdaq)

Tinder is largely reliant on Facebook for profile information of its users, and most importantly, to sign up on the app. It has only recently started taking direct sign ups using mobile phone numbers alone.

But is Facebook really such a threat to Tinder? Given the sheer size of it, yes. Facebook has 200 million ‘single’ registered users. In comparison, Tinder’s total user base is only 95 million.

Tinder user statistics 2018. Source: Statisticbrain.com (Photo: The Quint)

Why Doesn’t Facebook Acquire Tinder?

Facebook could have just bought Tinder if it wanted a Dating app right? So why hasn’t that emerged as a likely deal? After all, Facebook is famous for gobbling up companies in multi-billion dollar deals.

Some significant deals include buying WhatsApp for $19 billion in 2014, and Instagram in 2012 for $1 billion. It has bought many more smaller companies over the years, including Oculus VR in 2014 for $2 billion.

Shouldn’t Tinder have been a pretty obvious choice if Facebook was looking to start Dating (not literally)? Tinder’s valuation was pegged at $3 billion in 2017, when its parent company Match Group converted options.

Tinder’s popularity lies in its simplicity. It does not ask a user to fill out long questionnaires to build a profile. Instead, it relies on Facebook data or just a couple of simple steps to create one.

So here’s why Facebook probably thinks it doesn’t need to buy Tinder. One, Facebook already has access to the data that Tinder has. And two, Facebook has far more users marking themselves ‘single’ (and perhaps more likely to date) than Tinder’s total user base, given that most of Tinder’s base anyway came from Facebook.

Who Can Tinder Hook Up With?

Does Tinder really need to worry about Facebook getting into the dating game? Yes, it does. Tinder is rattled for sure, going by responses from its senior management to Facebook’s announcement.

Joey Levin, the CEO of IAC, the company that has a majority holding in Match Group, was pretty caustic.

Come on in. The water’s warm. Their product could be great for US/Russia relationships. 

Statement by Joey Levin, CEO, IAC

Mandy Ginsberg, CEO of Match Group was a little more accommodating, saying the company wasn’t worried with Facebook’s entry to the space, but questioned the timing.

We are flattered that Facebook is coming into our space – and sees the global opportunity that we do – as Tinder continues to skyrocket. We’re surprised at the timing, given the amount of personal and sensitive data that comes with this territory. 

Statement from Mandy Ginsberg, CEO, Match Group

Tinder should be worried as it could lose a majority of its user base if Facebook blocks access to its users. A few weeks ago, Tinder users were a worried lot, when Facebook updated its privacy settings – temporarily taking down Tinder for some.

However, users of Tinder say they will not really get off the app even if Facebook gets into the game. But that does not mean they will not shy away from what Facebook has to offer. One user sees Facebook’s Dating app as a more organised set up, meant for more serious relationships, while Tinder is for more casual relationships. Both can coexist.

Tinder, meanwhile, has seen its revenues soar with an increasing base of paid subscribers. Match Group’s total revenue (including Tinder, OkCupid and Match.com) rose 28.5 percent in the December quarter to $379 million according to Reuters. This may not be a patch on Facebook, but at the rate it’s adding subscribers it is bound to be profitable.

Tinder added 1.5 million more paid subscribers in 2017, compared to about 9,00,000 in 2016.

Given that growth rate, Tinder can afford to stay single. Unless, of course, it finds a match elsewhere.

Hey Google, care for a date?