}

JDate IP Oh Oh! Part III: The Post Mortem

IPOh Oh ...So how about a post mortem on the failed MatchNet / JDate IPO? See the cool thing about that whole debacle is that in their preliminary filings with the Securities and Exchange Commission (SEC) for an IPO, much information was made public, giving us an unprecedented inside look into the workings of a veritable Jewish institution.

So why was the IPO withdrawn? I mean the industry itself is due for some massive growth – according to Jupiter Research, online dating is expected to grow by 60% into a $642 million industry by 2008. Also, according to the Online Publishers Association, online dating was the No. 1 segment of content purchased online this year, growing 49% to $450 million. Had the MatchNet IPO gone through, it would have been the only public company in the industry and may have allowed investors the opportunity to participate in this dynamic market segment.

And yet the IPO failed. In it’s disclosure MatchNet revealed large and growing losses ($10.9 million), decreasing revenue per client (down 17%) and an increase in the subscriber churn rate. The losses were attributable mostly to the 233% increase in marketing costs and increased competition. One of the main raisons d’etre for the IPO was to raise more money for marketing.

MatchNet was anticipating going public for monhs, if not for years. They were planning an IPO in a post-dotcom crash market where there exists much competition from both other dating sites and from wildly popular free social networking entities (like friendster.com). Any potential investor would be and ought to be cautious about investing in such a venture. One would want to make sure that management was spending money wisely and in a sober and well thought out manner.

Both co-chaimen of the board gave themselves a 265% bonus increase in 2003 – that’s $1.4 million each. This kind of information would give any conservative investor pause. I mean they lost money that year. They were planning an IPO – they ought to have been acting with restraint. One would have to wonder what kind of bonuses they would give themselves once the company was fattenned with IPO cash. The bonus was just a numbskull move that may very well have cost them big time. They may still do an IPO in the future but next time around, even stupid ol’ non-MBA me would advise them, “don’t come off looking like such chazers!”

Follow me

7 Comments

  1. Jewishmayhem

    8/27/2004 at 1:33 pm

    Good post!

    Thank you for the insight!

    Keep up de good werk ya menches…hehe

    JM

  2. Suspicious Mind

    8/28/2004 at 12:26 am

    Great comments on Jdate. I was wondering when someone would get wise as to what seems to go on over there.

    But call me suspicious. It appears to me that the person behind Jewlicious is the web developer (DrummerWeb) for online dating sites JQS.com and JMatch.com and is also involved with the site for the Matzo Ball event. Could the skewering of Jdate be in your self-interest?

  3. ck

    8/28/2004 at 8:51 pm

    Oh Busted! Someone sure does know how to use WHOIS. Either that or our erstwhile Staten Island detective has uh… read my prior admissions vis-a-vis my involvement with JMatch and JQS, or he has seen the JQS banner on the left of this very Web site, or he has visited JQS.com which syndicates Jewlicious content. But whatever, good job!

    As for Drummerweb’s MatzoBall gig, reproducing unflattering articles about JDate actually goes against our pecuniary interests as JDate was a sponsor of several of the MatzoBalls last year. But I hardly think JDate gives a rat’s ass about the barely literate scribbelings on some shmoe Web guy. Finally, Jewlicious is just a hobby that has nothing to do with my job – none of my clients direct the content of THIS site and very few even know of my involvement here. If you were a really GOOD detective, you’d get a hold of our complete client list. Some of those clients would make for some AMAZING scandal mongering. I mean I’d tell you and all, but then whatever would you do to pass the time on a Friday night?

  4. Larry

    9/1/2004 at 9:38 pm

    Someone really needs to expose the fact that JDate charges its Jewish customers $10 more per month ($34.95 vs. $24.95) than it does customers on its American Singles website. JDate is MatchNet’s cash cow and it is milking it and its Jewish clientele for all it is worth. How funny when its stated mission “is to help strengthen the Jewish community and insure Jewish traditions are carried on for many generations to come by providing a community where Jewish singles, interested in meeting, dating or marrying within the faith, can find friendship or romance.”

  5. Suspicious Mind

    9/1/2004 at 11:05 pm

    How come I was a “New York detective” the first time I read comment 3 and now I’m a “Staten Island detective”?

    Also, your response in 3 seems a tad disengenous. Where are those prior admissions? And the fact that you run a banner ad for JQS hardly informs the reader your involvment with them. Google runs a lot of ads, too – does that mean they are involved with each of those companies?

    Your comment re Jdate/Matzahballs only makes sense (sort of) if Jdate is again sponsorsing some of those events this year.

    Look, I don’t have any issue with what you wrote about Jdate. But I think the intellectually honest thing would have been to disclose at the same time and in the same postings that you (as I understand it) have been been/do get paid by some of their competitors.

  6. ck

    9/2/2004 at 12:09 am

    Hey suspicious mind! Welcome back. OK the Staten Island thing was just me doing a reverse IP lookup. While Staten Island is technically part of New York City, I figured the Staten Island reference was more evocative… whatever.

    As far as the whole intellectually honest thing, I wrote about JDate because its a veritable Jewish institution and I am all about being critical of institutions – my involvement with much smaller groups and companies had nothing to do with what I wrote. I mean JMatch and JQS and Matzoball are in the same business but they are hardly in the same league. So I thought about it, but it had so little relevance to me that I thought it wasn’t necessary.

    As far as prior admissions, many people that come to this site come because I post on other blogs and have been actively posting for far longer than Jewlicious has been around. I hide nothing – I mean you found out, its no secret. I could have easily masked my identity, but why bother? In any case, you brought it up and I came clean right away. Remember, this isn’t a newspaper. This is my gig and I do and say whatever I like. By the way, we do a number of Hillel sites too and they throw parties as well.

    Now, with reference Matzoball, as far as I know, JDate has every intention of sponsoring parties with MatzoBall again. But maybe not, who knows – its an ad hoc year by year relationship. In any case, it’s definitely a possibility. JDate has or had relationships with a number of my customers. None of them want to fuck with JDate, but again, I’m just a silly blogger. Who friggin cares what I say or do or think? So far there has been no response or feedback from anyone, which leads me to believe that my business relationships are totally irrelevant.

    Ooof. OK, back to work for me.

  7. Pingback: JDate Sues JSwipe for the “J” – Jewlicious THE Jewish Blog

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: