Facebook’s dating feature launched in the US on Thursday. The company announced plans for an online dating service in May 2018. Facebook’s dating service launched in 18 countries, mostly in South America and Asia, before it arrived in the US. The company plans to take the service to Europe by early 2020.
The feature’s launch in the US immediately shook its rivals. Shares of Match Group (MTCH), which runs Tinder and several other dating apps, fell 4.55% on Thursday. Shares of Match Group parent IAC/InterActiveCorp (IAC) fell 4.0% on Thursday. The falls in Match Group and IAC/InterActiveCorp stocks followed the news of the dating service’s arrival in the US.
Facebook’s dating feature launches in the US without a monetization plan
Facebook’s dating feature is launching in the US when the company has not provided a clear monetization plan for it. As we discussed previously, Facebook doesn’t intend to charge people to access its dating feature as other dating services do. It also doesn’t intend to run ads alongside people’s dating profiles.
We know that advertising is Facebook’s primary source of revenue. In the second quarter, for instance, Facebook’s ad sales increased 28% year-over-year to $16.6 billion. Advertising contributed 99% of Facebook’s total revenue. In contrast, advertising contributed 84% at Google parent Alphabet (GOOGL) and 86% at Twitter (TWTR) in the second quarter. Baidu (BIDU) and Yandex (YNDX) derived 73% and 70% of their total revenues, respectively, from advertising in the second quarter.
Other dating services that Facebook will compete with use a combination of paid access and advertising to make money.
Facebook says over 200 million users list their status as single
Although the dating service may not make money directly for Facebook, we believe it will contribute positively in other ways. For example, Facebook once revealed that its namesake social network has 200 million users who list their status as single. These single people might find Facebook more useful with the dating feature. The feature could also help draw more people to Facebook, expanding its audience reach. A higher number of users would increase the platform’s usefulness to marketers, in turn generating revenue.
Facebook’s dating feature launched in the US after millions of Facebook users’ phone numbers leaked.