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Online Dating Sites: Successful Business Projects Can Cost Millions!
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igor-zu on 14 May, 2008 02:32:00
 
The parent company of the popular Jewish online dating site has put itself up
for sale, people close to the auction said, and is already in talks with
several prominent media companies.
The owner of the site, 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 and some other world-known Internet-dating
agents, these people said.
Shares of Spark, which trades under the ticker LOV, have jumped more than 20
percent in recent weeks. Its shares closed 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.
Some industry executives have questioned the company’s growth prospects;
its revenue grew only 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 year-over-year gains of more than 70 percent early
in the decade. Jupiter Research, an Internet consulting firm, said the market
grew 10 percent in 2006, to $649 million, and is likely to grow 8 percent a
year until 2011.
For Spark, which was started in 1997, a sale would be the culmination of years
of expanding the company by starting and buying various online dating web
sites.
It had 2.45 million unique visitors in November 2007, ranking it No. 4 among
personal sites. Spark reported $6.56 million in net income with revenue of
$68.85 million for 2006. The company has hired AGM Partners, a boutique
investment bank focused on media companies, to run the sale process, people
briefed on the auction said.
(by http://www.nytimes.com)