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Match.com Buys OK Cupid, Founded by Sam Yagan '05

ARTICLE BY: The Associated Press

Bloomberg

February 2nd 2011

IAC's Match.com buys rival OKCupid for $50M

NEW YORK (AP) — Online dating site Match.com, owned by Internet consumer company IAC, has bought rival OKCupid for $50 million in cash in a bid to reach a younger demographic.

Match.com, the second-largest unit IAC, where billionaire and former Fox executive Barry Diller is chairman, will also pay OKCupid an unspecified bonus if it meets certain performance milestones.

Sam Yagan, OKCupid's co-founder and CEO, will stay on as its leader. IAC said in its earnings report it released Wednesday that Match.com was largely responsible for a 27 percent jump in its fourth-quarter profit.

OKCupid appeals to a younger demographic than Match.com, which was founded in 1995 — in part because membership is free in 7-year-old OKCupid. OKCupid generates revenue through advertising, while Match.com charges membership fees. OKCupid's ad revenue has risen faster than that of any other dating site, said IAC.

"OkCupid has been a real innovator in our space, and the dating environment they've created has struck a chord with a younger demographic," said Greg Blatt, who took over as chief executive officer of IAC in 2010. "I think it's clearly the best site in its competitive set, with better features and a more distinctive personality than any other advertising-based site."

Blatt's comments suggest that IAC won't change OKCupid to make it look and feel more like Match.com. Rather, he envisions OKCupid as a gateway to Match.com and IAC's other dating site, Chemistry.com, both of which offer different features from OKCupid.

"We know that many people who start out on advertising-based sites ultimately develop an appetite for the broader feature set and more committed community, which subscription sites like Match.com and Chemistry.com offer, creating a true complementary relationship between our various business models," he said.

Among IAC's dozens of other businesses are The Daily Beast, Dictionary.com, Ask.com and CitySearch.

The company's Match unit, which includes Chemistry.com, accounted for $108.3 million of IAC's $451.4 in fourth-quarter revenue.

Shares of IAC rose 19 cents to $28.74 during Wednesday morning trading.

Link to original article: http://www.bloomberg.com/news/2011-02-02/iac-s-match-com-buys-rival-okcupid-for-50m.html