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No Like: The youngest generation of young users does not care
Photo: Johannes Schmitt-Tegge / dpa
Bernard Kim
(44) just posted
photos of a lavish party night.
In Los Angeles, he and the Tinder team celebrated the tenth anniversary of the world's largest dating app.
Tinder has revolutionized the way people date, Kim wrote on LinkedIn.
"I had a blast celebrating with the team."
That may be true, but otherwise the CEO of the Match Group has lost all fun with his most important source of revenue.
In May, Kim moved from the computer games company Zynga to the head of the Tinder parent company – and pulled the ripcord after just a few months.
He stopped various central projects and in August fired Tinder boss
Renate Nyborg
(36), who was only installed a year ago.
Kim now prefers to run the business herself – the search for a new Tinder boss is ongoing.
Just like following a strategy.
The world's most famous and long-shining dating app has lost its luster.
The numbers are weaker than expected, the parent company's share price has collapsed by more than 60 percent within a year and hits a five-year low after the next every day.
The question now is, as is so often the case after a crash, how to proceed.
In the decade since its inception, Tinder has become the most successful dating app in the world.
Users can see photos of potential partners on their smartphones and thus swipe through an entire gallery.
A left swipe means "Not interested";
If they both swipe to the right, there is a match and the flirting can begin.
In total, Tinder has now been downloaded more than 530 million times worldwide.
According to the market research company Data.ai, the singles market is also the number one dating app in Germany in terms of the number of downloads and active users.
Although Tinder offers a free version with advertising, advanced functions or hidden advertising are subject to a fee.
Tinder also earns money through in-app purchases and subscriptions, which unlock features such as unlimited likes, messages without a previous match, or change of location.
Last year, the service generated $1.65 billion in revenue, more than half of the total revenue of the Match Group, which includes several other dating portals such as OkCupid, Hinge and Plenty of Fish.
Economic alarm prevails.
Business has been stagnating or even declining since the summer of 2021.
Match sales have now declined for two consecutive quarters, most recently at $794.5 million in the second quarter of 2022. Operating profit also collapsed, slipping almost a quarter of a billion dollars to minus 10 million dollars.
The bottom line is that CEO Kim even reported a net loss of $31.9 million, while analysts had expected a profit of more than $150 million.
The perspective also promises little improvement: For the current quarter, Kim only expects business to remain the same;
The group will miss the originally announced turnover by a good 80 to 90 million euros.
The main problem of the dating giant is: Tinder.
There is no longer a match between the app and the young target group.
Gen Z singles don't tinder.
They switch to alternative online services to look for a partner: Tinder is losing market share.
In 2021, Tinder downloads fell 5 percent to 70.7 million, while competitors like Bumble saw steady growth.
"Registrations have not yet returned to pre-pandemic levels,"
Gary Swidler
, 50, Match Group's chief operations officer and chief financial officer, recently told the Financial Times.
CEO Kim takes the rudder into his own hands
Tinder boss Nyborg, installed less than a year ago as the first woman in the post, apparently did not trust Kim to turn the tide.
Tinder's revenue growth expectations are "below our original expectations as several optimizations and new product initiatives have been disappointingly implemented," Kim Nyborg said.
In addition, he replaced other top people and created new structures.
Kim announced that they would be looking for a new boss for the unit.
Until then, he will take over the business himself.
The manager has had a career in the gaming industry.
He was at Electronic Arts for almost ten years, followed by six years at the online games manufacturer Zynga ("Farmville"; "World of Candy"), most recently as President.
The experiences there could now help to advance Tinder again.
"New users remain a challenge and this is where product innovation comes into play," Swidler said.
You have to give people a new reason to come to the app because they "haven't experienced anything new and exciting for a long time".
Tinder needs to develop new features like the original swipe.
"We need to find out what the next big thing is."
Above all, the number of paying subscribers is stagnating.
It has remained constant at a good 16 million since the summer of 2021;
Tinder itself has around 10.9 million paying users.
And the sales per customer of the dating group has now been declining for two quarters in a row: most recently it was $15.86.
Gamification of the app is not working
To speed up the app's gamification, Match has hired executives from game publishers like Electronic Arts, Glu, King and Zynga.
Various ideas have recently failed.
Tinder only introduced the virtual currency Tinder Coins in November, with which users could buy functions in the app.
Not even a year later, Kim shelved the project after mixed results.
"They decided to take a step back and reconsider this initiative so that it could contribute more effectively to Tinder's revenue," he said.
The company's big bet on the Metaverse also needs a solution.
Like numerous luxury brands or the Facebook parent company Meta, Tinder also relies on the hyped virtual 3D worlds.
Last fall, the management announced that it would create a new, virtual form of online dating.
Now Kim has shelved those plans too and decided to scale back investments in the Metaverse.
The reason: the uncertain development of the virtual Internet world.
Tinder is also struggling with a negative reputation.
This not only includes criticism of the superficial sorting out of people via the swipe function or the image of being less suitable for long-term dating and the search for a permanent partner.
There are increasing reports, especially from women, who have had negative experiences with the app.
Now a new subscription package based on curated recommendations should help and will be launched soon.
"We think that's particularly appealing to women," Kim said in August.
CFO Svidler said the company also needs to look at teenagers and ask what they'll be using in a year or two if they're eligible for a dating app.
"That's the target audience we need to keep in mind, Gen Z."
At the moment, Tinder tends to attract older people.
Rival Bumble is catching up
Things are going better for competitor Bumble, which was founded by Tinder co-founder
Whitney Wolfe Herd
(33).
She was responsible for marketing at Tinder at the time until she left the company and sued it for sexual harassment and abusive behavior.
Later that year, she came back with Bumble, a feminist version of Tinder where only women can message men first.
Last year's IPO made Herd the youngest self-made billionaire in the world to date.
Like many other tech companies, the share has also lost a lot of value in recent months.
According to Data.ai, the number of downloads of the app increased by 20 percent last year to 21.1 million.
The service still has significantly fewer paying users than rival Tinder.
But for that, Bumble customers spend an average of just under $30 a month, twice as much as at number one.
Naturally, Swidler isn't too worried.
"Tinder is still the biggest dating company in the world," he says.
"And that's a big advantage, because if you want to meet people, the best place to go is where there are a lot of people."
