By Leigh Gallagher
June 27, 2018

One day in early May, IAC CEO Joey Levin sat in a conference room at the company’s Frank Gehry–designed headquarters in Manhattan, along with Barry Diller, IAC’s founder and chairman, and a few others. The group was listening to one of their colleagues present a routine strategic plan when the executive happened to mention something about an ad-supported business. Suddenly Diller sprang to life. “That reminds me!” he said. “Sheryl called me last night to let me know they’re getting into the dating business, and they’re going to announce it tomorrow.”

“Sheryl” is, of course, Sheryl Sandberg, Facebook’s chief operating officer, and Facebook was indeed poised to reveal plans to enter the online dating space—in fact, CEO Mark Zuckerberg was at that very moment making the announcement at F8, the company’s annual developers conference. Levin turned to the huge screen in the room that displays the tickers of IAC and Match Group, the online dating conglomerate it spun off in 2015, where shares of both companies were already dropping. “My phone starts lighting up with texts, and each time I’m getting a text, the stock drops another 5%,” Levin recalls. All told, Match Group stock plunged 22% that day; IAC, almost 18%.

Later, Levin issued a statement addressing his company’s new competitor (IAC owns 81% of Match Group): “Come on in. The water’s warm,” he said, deadpanning that Facebook’s product “could be great for U.S.-Russia relationships.” The media ate up the jab, but there’s no denying that the news was anything but a joke to Match and the rest of the online dating industry.

The Facebook reveal is just the latest bombshell in a business that’s in the midst of more drama than a bad online date. In the past few months alone, Match Group, the $12 billion parent of Match.com, OkCupid, Tinder, and Plenty of Fish, among many others, filed a lawsuit against its white-hot startup challenger, Bumble, for patent infringement and stealing trade secrets. Bumble published an acerbic letter in response and filed its own countersuit. This is on top of the already fraught history between the two companies: Bumble’s founder, Whitney Wolfe Herd, was a Tinder cofounder who sued for sexual harassment after being forced out, won a settlement, and a few months later started the competitor. After all of this fracas, the Facebook news was, at least, professional, complete with courtesy call.

But Zuckerberg’s announcement marks a major turning point for the industry—and perhaps most significantly, for market leader Match Group. The market for using technology to connect singletons the world over has flourished in recent years, but its real potential has yet to be unlocked. Globally, there are 600 million singles online—a number that’s expected to jump to 700 million by 2020—yet the industry’s biggest player by far, Match Group, is estimated to claim just 10% of that. So while skeptics have plenty of (valid) questions about whether Facebook can actually persuade people to trust it with their romantic lives, there’s no doubt that the behemoth’s decision to enter the market will go a long way toward legitimizing digital courtship and bringing more of those would-be daters online.

Still, even as a rising tide has the potential to lift all boats, it also tends to roil the water. If Match Group wants to stay No. 1, it will need to defend its turf.

Managing that feat falls not to Levin but to Mandy Ginsberg, the 12-year company vet who took over as CEO in January, replacing Greg Blatt, the onetime general counsel who became chief of IAC before moving to Match Group at the time of the spinoff. Ginsberg, 48, a self-described “hands-on operator” who rose up the ranks and most recently served as CEO of the company’s North American operations, has her work cut out for her. In addition to propelling Match Group over the hurdles thrown up by competitors like Facebook and Bumble, she has to maintain and manage the explosive growth rate of the company’s crown jewel, Tinder, the swiping app that took the world by storm when it was launched in 2012, as well as oversee an ambitious international expansion. All the while, she’ll need to keep the company on the cutting edge of innovation as it strives to use A.I., machine learning, and other tools to get ever closer to this industry’s holy grail: accurately predicting chemistry between two strangers.

Those who know her say Ginsberg is likely to be up to the task. Having joined the company in 2006, she knows the industry inside and out. Though married with two daughters, she takes Match’s mission almost as a personal responsibility. “This isn’t about making, I don’t know, tables,” she says. “I really believe that we are having a profound impact on people’s lives.” When the topic turns to my own relationship status, and I share that I have just split up with my boyfriend of five years, she becomes the first person to actually brighten at hearing the news. “That’s exciting!” she says. When I raise my eyebrows, she continues: “No, it is. The idea that you can go out there now and meet all these interesting people, it’s great.”

Illustration by Gabriel Silveira

FOR ALL THE ATTENTION it garners, online dating is not a large industry—total U.S. revenue last year was $2.9 billion, according to IBISWorld. But it is fastgrowing: Usage of online dating platforms tripled among users ages 18–24 between 2013 and 2015, according to Pew Research Center.

It’s also highly profitable. Though often overlooked for its FANG brethren (Facebook, Amazon, Netflix, Google), Match Group shares outperformed them all last year and has profit margins that are better than the A, N, and G. In addition to a huge and largely untapped market, the industry has strong tailwinds, including increasing millennial spending power, longer work hours, and young people delaying marriage. Industry revenue is expected to grow 25% through 2020, according to Evercore ISI.

Match Group is the conglomerate parent to 40-plus brands in more than 42 languages, including Match.com, the granddaddy of the industry most popular with 30- to 50-year-old relationship-seekers; OkCupid, which took hold among urban hipsters by asking daters to answer a list of quirky ice-breaker questions (“Would you ever sleep with a serial killer?” “Are you annoying?”); Plenty of Fish, popular in the non-coastal U.S.; and Tinder, the revolutionary dating app that gave the world the “swipe” and all that came with it. The company’s biggest competitors include eHarmony, known for its ads featuring founder Neil Clark Warren and its focus on long-term relationships; Spark Networks, the $135 million publicly traded (ticker symbol: LOV) parent of Jdate, Christian Mingle, and others; Badoo, which claims 380 million users worldwide but is used primarily overseas; and Bumble, the fast-growing upstart created in 2014, which
allows only women, not men, to initiate contact. For those singles who want something a bit more, well, specific, there are hundreds of other special-interest sites, from FarmersOnly.com to GlutenFreeSingles to ClownDating.com (slogan: “Everybody loves a clown … let a clown love you”).

I’ve been an on-again, off-again user of online dating sites over the years. I met the ex from whom I told Ginsberg I had recently separated on Match.com in 2012. (Fun fact: Over the years, I even went on online dates with not one but two former CFOs of IAC.) But until I started working on this article, I’d never “swiped.”

In 2012, IAC—through an internal incubator, Hatch Labs—launched Tinder, a simple but addictive app that turned dating profiles into a deck of cards with a “swipe” mechanism: Users quickly sort through dater photos, swiping left for “nope,” right for “like.” If both parties swipe right, a match is made, and you can start messaging. This feature—the technical name for it is “double-blind opt in”—eliminates the embarrassment of rejection, and the swiping methodology makes dating something you can do fast and on the go (unlike Match.com, which, at least when I did it, required sitting down at a computer, logging in, and rolling up your sleeves for a long email session). Tinder “gamified” dating, and it took off , especially among college students and millennials. By 2014, it was registering a billion swipes a day and had become a cultural phenomenon: The Oxford English Dictionary even added the terms “swipe left” and “swipe right.” All told, there have been 242 million Tinder downloads.

The app is the rare example of a breakthrough innovation coming not from a startup but from inside a large company. “It’s probably one of the great internal incubations of all time,” boasts IAC CEO Levin. Tinder also nailed a business triple axel: Since millennials weren’t previously big users of online dating sites, it unlocked an entirely new customer group. It grew virally all over the world with almost no marketing expenditure. And even now it’s posting impressive numbers, with paid subscribers nearly doubling from 2016 to 2017. When Ginsberg reported Match’s first-quarter results in early May, the company raised its revenue outlook for the year by $100 million—largely on Tinder’s growth.

But nothing is ever that easy, in dating or in life. And for all its growth, Tinder has also been the source of many problems. Between speed-swiping, the heavy reliance on photos, and perhaps the life stage of its intended demographic, it almost immediately earned a reputation as a hookup app. And while that hasn’t seemed to impact its popularity, it’s not the image Match, a company selling love and relationships, is after.

Nor did a blockbuster harassment suit help matters. In 2014, cofounder and former head of marketing Wolfe Herd (then just Wolfe) filed suit against IAC, Match.com, and Tinder, claiming sexual harassment and discrimination, submitting ugly and abusive messages from Tinder cofounder Justin Mateen to Wolfe Herd—the two had dated—as evidence. The companies denied wrongdoing, but Tinder quickly suspended Mateen (who later resigned) and settled the suit. Sean Rad, also a cofounder, was pushed out as CEO, returned, then six months later went from CEO to chairman before finally exiting the company for good last fall. The incident was a huge black mark and amplified the perception that Tinder was an inhospitable place for women to work.

Ginsberg wasn’t at Match at the time of the scandal and its aftermath—it occurred during a 2½-year stint that she spent running IAC’s Tutor .com and Princeton Review businesses. But she says Tinder’s cultural problems have been “stomped out.” “I think it was a young culture, and it grew really fast, and I don’t think there were as many experienced hires and grownups,” she says. “And now there are.” One of those grownups is Elie Seidman, a fintech and online travel veteran (he founded online travel site Oyster.com) whom Ginsberg had brought in in 2016 to run OkCupid. One of her first moves as CEO was to move him into the CEO role at Tinder. An engineer, “intellectual,” and serial entrepreneur, Seidman, Ginsberg says, is “the last person in the world you think of as a bro,” she says. “I mean, the last.”

Illustration by Gabriel Silveira

BUT THE TINDER SAGA would have lasting impact. A few months after the settlement, Wolfe Herd launched Bumble, a new dating app with features strikingly similar to Tinder’s—swiping methodology, card-stacking design and all—but with a transformative twist that almost seemed to presage the current #MeToo movement: After a match is made, contact must be initiated by the woman. It was a genius stroke of female empowerment wrapped in yellow, bee-themed branding, and it struck a chord: In 3½ years, Bumble says it has amassed 34 million total registered users. Of its active users, roughly 10% are paid; last year the company is said to have pulled in $100 million in subscription revenue.

Bumble may be the David to Match Group’s Goliath, but it has a Goliath-size backer of its own: Wolfe Herd has proved to be a gifted entrepreneur in her own right, but she created Bumble with the help of Andrey Andreev, a London-based Russian billionaire entrepreneur and the founder of Badoo. The two cooked up the idea together, and Andreev owns 79%, Wolfe Herd 20% (the remaining 1% is split between two additional employees). Bumble operates out of Austin, but engineering, development, and other infrastructure is handled by Badoo’s teams in London.

For a few years, Tinder and Bumble coexisted—and were even reported to be in on-and-off acquisition talks last year—but things recently turned testy. In March, Match, which was recently granted patents related to the swipe and the design of the Tinder app, filed its suit against Bumble, accusing it of patent infringement and stealing trade secrets. With patents in hand, it claimed Bumble’s technology “copied Tinder’s world-changing, card-swipe-based, mutual opt-in premise” and that the app is “virtually identical” to Tinder.

Four days after the Match filing, Bumble fired back with an angry letter it published on its blog and in the New York Times. “Dear Match Group, we swipe left on you,” the letter began. “We swipe left on your multiple attempts to buy us, copy us, and now, to intimidate us.” Accusing Match of suing to scare away other potential bidders, the letter said any deal was off the table: “We’ll never be yours. No matter the price tag, we’ll never compromise our values.” A few days after that, it filed its own suit against Match, claiming Match had fraudulently obtained sensitive information during acquisition talks and that it had “poisoned” Bumble to the investment market. It asked for $400 million in damages.

Among other things, the suit stated that Match had made a $450 million offer for the company last year that Bumble rebuffed, sparking a protracted back-and-forth over Bumble’s valuation. Sources close to Bumble say those discussions were still ongoing when Match filed its lawsuit, and that’s what provoked Bumble’s outraged response. They also suggest that the Match lawsuit may have been a tactic to ramp up pressure on Bumble to do a deal.

Ginsberg declined to comment on acquisition talks or their timing, citing a nondisclosure agreement. She says the lawsuit was simply about intellectual property. “Thousands of companies protect their IP and patent infringement and trade secrets,” she says, noting that a few days after Match filed suit against Bumble, it also brought a separate suit against Tantan, known as the “Chinese Tinder.” (Tantan settled in May.)

“If we didn’t think there was merit and justification [in filing the Bumble lawsuit], we wouldn’t have done it,” Ginsberg says. “I thought a lot about, ‘Do I regret making that decision?’ I don’t.”

Wolfe Herd: Jeff Vespa—Getty Images; Andreev: Courtesy of Badoo

BOTH COMPANIES WOULD soon be hit with a much bigger tsunami of news on May 8, when Zuckerberg made his announcement. “All of a sudden, he starts saying, ‘Did you know that one in three marriages in the U.S. start online?’ ” recalls Jefferies Internet analyst Brent Thill, who was in the F8 audience that day. “And I’m like, ‘Oh, no, here comes the dating app.’ ”In his presentation, Zuckerberg said that the Facebook feature would be “for building real, long-term relationships, not just hookups,” a dig at Tinder.

Facebook has been light on actual details but says the opt-in feature will match users with people they aren’t already friends with, and that users will be able to create a separate
dating profile that friends won’t be able to see.

Ginsberg addressed the issue on Match’s earnings call the following week. Research suggests the majority of singles—especially women—would not want to use Facebook for dating, she told investors. Users have concerns over both privacy and engaging in dating activities in the same place where they share updates with family and friends, she said.

She also points out that the dating business is not as easy as it might seem. While Match has reams of cards and thank-you notes hung around its headquarters for every wedding and child it helped create, it also hears from plenty of users who have had bad dates and blame the company. “Part of dating is the up and down,” she says. “We live with all that psychology, and they’ll have to, too. How does that psychology play in with the relationship they have with their core product?”

All these things are true, but so is the fact that a half-trillion-dollar company with 2 billion users just announced it’s getting into a field that Match has had pretty much to itself for more than two decades.

One thing everyone seems to agree on is that Facebook’s effectively endorsing online dating will be a huge legitimization event for the industry. “This may actually be a pump that primes the overall market,” says Thill. Match has found that when it has gone into new overseas markets where people are already comfortable with Facebook, it reduces the barrier to entry for online dating. And the truth is, for all the drama between Bumble and Match, and all the angst about Facebook’s entry, there’s a lot of room in this category: On average, people use three dating products at any given time.

AFTER A FEW WEEKS test-driving both Tinder and Bumble, I conclude that I am no fan of the swipe. I find myself missing the thoughtful, epistolary correspondence of email-based dating, which, compared with this, feels almost Victorian. I also developed an aversion to the apps’ location-driven approach, which draws no distinction between someone who lives in the New York City area and someone just passing through. I signed up for Bumble, for instance, while visiting friends in Boston and immediately matched with Bostonians—and then, on the Amtrak ride home, with eligible singles all up and down the New England coast.

And it’s true what people say: Compared with the Match.com of yore, there is much more short-term-ism. Many profiles don’t have anything written, just photos. On Tinder, I saw a few couples looking for a threesome and a handful of married men looking for something on the side.

But I found that if I was patient enough and kept swiping, there did seem to be a supply of eligible matches in my general demographic. Ultimately, that’s what really matters to daters: I may not love these apps, but if everyone in my demo is using Tinder and Bumble, then I’m going to use Tinder and Bumble. (Levin of IAC refers to this as “liquidity in the marketplace.”) Sometimes, the pack moves. Case in point: During my research for this story, someone suggested that I try the dating site Hinge, which had recently retooled itself to focus more on relationships, noting that it has seen a spike in use among New Yorkers. Indeed, shortly after the print version of this article went to press, Match announced that it had acquired a 51% stake in Hinge, and that it had made a previously undisclosed initial investment in the company and taken a seat on its board last fall.

Illustration by Gabriel Silveira

GINSBERG HERSELF NEVER did much online dating, save for a few Jdates while she was in business school. To get into the online dater’s mindset, she constantly polls singles about their experiences—including texting her 19-year-old daughter and her daughter’s friends to ask what they think of Tinder. But she knows firsthand how the excitement of a serendipitous meet-cute can change a life—and also how relationships aren’t always easy.

In the early-1990s, after graduating from UC–Berkeley, Ginsberg decided to spend the summer as a counselor on a teen tour to Israel, with the intent of returning to her native Dallas afterward. But while on the trip, she fell in love with the Israeli tour guide, stayed, and ended up marrying him, starting her career at software companies in Tel Aviv. (Her parents’
reaction to the seemingly impulsive move? “They were not very happy,” she says.) The couple returned to the U.S. when her husband was admitted to Berkeley’s clinical psychology Ph.D. program, and while he pursued his studies, Ginsberg worked for Edelman in public relations. When she got into the prestigious Wharton School, she and her husband, now with a 1-year-old daughter, relocated to Philadelphia.

But one week into her first semester, her husband told her that he felt the relationship wasn’t working—and that he was moving back to Israel. “I found myself with this fat little 1-year-old, and I was at the hardest business school in the country,” Ginsberg recalls. “And I just had this sort of ‘Oh, shit’ moment where I was like, ‘What am I going to do?’ Then I was like, ‘Wait. I have to figure this out.’”

Through day care, babysitters, and persuading her study groups to use her house as their gathering spot, she figured it out. (She and her ex-husband have remained on good terms.) But after she graduated came an even bigger setback: Her mother was diagnosed with ovarian cancer. Ginsberg moved back to Dallas to care for her, adjusting her career plans and taking a job at a small software company. Her mother died a few years later—and soon after, Ginsberg tested positive for the BRCA gene, making her much more likely to suffer the same fate.

Over the following several years, she had a mastectomy, an oophorectomy (removal of the ovaries), and a hysterectomy, all while she was climbing the ranks at Match.com. (A major bright spot: She met her second husband at her previous job at the software company and was able to have her second daughter before undergoing the surgeries.) As difficult as they were, Ginsberg says she took a lot from the experiences. “Your perspective changes when you have all of these life challenges,” she says. “You realize that you can do a lot.”

In 2006, she joined Chemistry.com, a new brand started by Match, as general manager. Ginsberg had little experience running a business, but the company was looking for someone who understood PR, marketing, and, in particular, psychology around women. For Ginsberg’s part, she wanted to get into consumer technology, and she happened to have something of a gift for matchmaking, having introduced four couples who’d gotten married. She took the brand from zero to $25 million before being named general manager of Match.com two years later and CEO of the Match business in 2012. In 2013, she headed East to become CEO of IAC’s nascent Tutor.com business, which subsequently acquired the Princeton Review test-prep company. Then, in 2015, she was brought back as CEO of Match Group North America. It took just 2½ more years for her to claim the top job, replacing Blatt, who stepped down as CEO at the end of last year.

Those around Ginsberg describe her as confident and low-ego, with an encyclopedic knowledge of the industry and a gift for spotting and nurturing talent—a relevant strength in a company with so many autonomously managed brands. Her senior management team consists almost entirely of people Ginsberg brought in over the years. She hired her longtime lieutenant, Sharmistha “Shar” Dubey, currently president of Match Group, in 2006, shortly after leaving the Dallas software company, which sued her for doing it.

Ginsberg also says she feels the significance of being a woman CEO at a dating and technology company. The online dating world has been rife with abuse, and much like Wolfe Herd at Bumble, she feels an obligation to think about the female perspective when it comes to the user experience. She’s also aware of her imprint on company culture and, particularly, female employees. Shortly after she was named CEO, a young female developer came into Ginsberg’s office and confided in her that she didn’t think she would ever get to work for a tech company run by a woman, but now seeing Ginsberg in that role, she could see herself there someday too. “That had a big impact on me,” Ginsberg says.

Illustration by Gabriel Silveira

FOR NOW, GINSBERG HAS her hands full. As the competition looms, the company is focused on growth, both international—the untapped among those 600 million potential customers are largely overseas—and through better monetization; the majority of its customers still use its sites for free.

Match Group is also working on new female-friendly features, like a Gentleman’s Badge, a designation recently added into its European Meetic brand that men earn through certain behaviors, such as filling out an entire profile or engaging in lengthy email correspondence; men with the badge get 33% more attention from women. On Tinder, the company is developing a tool that will enable women to choose to set their profile such that they have to initiate contact. So … just like Bumble? “This is very different,” Ginsberg says, noting that users can choose. “You’re not forced down a path.”

Photos can show you only so much; just ask anyone who’s been disappointed by an online date (i.e., pretty much everyone who’s ever gone on one). A goal of Ginsberg’s is to get closer to the heart of creating a connection, so that by the time two people meet face to face there’s a higher chance of success. Videos can go a long way toward that end, and Tinder and Match.com recently started testing features using the technology. Tinder recently launched Super Likeable, which uses machine learning to predict which profiles a user is most likely to swipe right on.

Match also has to keep chipping away at the stigma that hurts the category—and, with Tinder, it has to work harder to shake its reputation as a hookup app. Even though plenty of people now meet long-term partners or spouses on Tinder—just peruse the New York Times wedding pages for proof—the brand’s tawdry image has stuck. “We’ve got some work to do there,” Ginsberg says. (Many saw Match’s investment in Hinge as an effort to offer an alternative to casual dating; news reports around the deal repeatedly referred to Hinge as the “anti-Tinder.”)

And then there’s the challenge from Bumble. It’s anyone’s guess what will happen with this heated and colorful saga, or who among these players is going to couple up with whom. Some put strong odds on Facebook’s acquiring Bumble. Others say despite the war of words, there’s still a chance of a Match-Bumble union. “When you take an ad out and when Bumble says, ‘We’re not gonna play your game’—believe me, that doesn’t mean they wouldn’t take an offer from Match,” says David Evans of Digicraft, an industry consultancy.

Match Group says the company has not yet been physically served with Bumble’s lawsuit. It could be that opposites attract after all.

A version of this article appears in the July 1, 2018 issue of Fortune with the headline “The Dating Game.”

SPONSORED FINANCIAL CONTENT

You May Like

EDIT POST