Facebook Dating will Win!
The recently announced Facebook Dating service will revolutionize the vertical.
Last week I wrote a post called “Facebook Dating Will Fail.” I explained why Facebook’s new dating initiative could be doomed.
Today, I’d like to provide the counter argument.
The basis of the analysis lies in the definition of the term, “dating.” The term covers the gamut of everything from casual hookups (aka one-night-stands), to flings, all the way up to serious relationships leading to long-time companionship and marriage.
Today’s online services cover all aspects of dating, from gamified services like Tinder and Bumble, to more casual dating-oriented services like OK Cupid, to the more serious dating services like Match and eHarmony.
So, this begs the question, which one of these areas does Facebook Dating target?
Mission
The premise of my previous post was that Facebook would go after more casual daters. If that’s the case, then the point of view in my post stands, and it will indeed fail.
However, to understand what Facebook’s ultimate goal is, one needs to go back to its mission statement as presented by Mark Zuckerberg –
“Give people the power to build community and bring the world closer together.”
In this context, it stands to reason that Facebook Dating’s real mission is to help people create meaningful relationships, which means they are not going after the more casual market.
Given this context, I will attempt to analyze Facebook Dating’s promise under the same three criteria as in my previous post
Single App Policy
Facebook has ~2.2 Billion users (MAUs) of which ~90% are mobile of which ~90% use the Facebook app. That is a huge number of users. According to Facebook, over 200 Million users claim to be single. There are many millions of users who do not list relationship status at all, but it can be inferred that some of those are single as well. Given these stats I can definitely conclude that the existing Facebook app is already the world’s largest dating app. There is no need to create a new app. Users use it to connect with others every day. The challenge is that it does not necessarily create great matches. More about that later.
Creating a new app adds another layer of friction. Facebook already has what every other app developer would kill for: it’s already installed on virtually everyone’s phone. Users already HAVE the Facebook app. Users are already USING the Facebook app. Why spend the resources developing a new app when the right users for this application are already there?
Monetization
Facebook’s great advantage is its business model. They brought the media/ad model to a level of art. Facebook knows how to monetize a media service better than any other service out there. It has the platform, the personnel, the resources, the proven experience and the know-how. Why change that?
Very few companies have assets of this caliber at their disposal. That is one of Facebook’s main competitive advantages. It would be foolish to abandon it for the unwarranted adventure of learning a totally new freemium business model.
I would also add that placing a pay wall would quite literally be contrary to Facebook’s mission, as it would prevent people with lesser means to participate and connect.
Facebook makes money by connecting business to people — NOT by connecting people to each other.
Thinking Small
In my previous post, I argued that if Facebook were to go down the casual dating rabbit hole, it would be thinking small and would not be maximizing the potential business opportunity at its finger tips.
I would contend that maximizing revenues is not necessarily Facebook’s main objective. Rather, Facebook generates revenues as a result of executing well on its mission of connecting people and bringing the world closer.
I believe that Facebook Dating has a grander, loftier, and way more difficult goal than to simply generate additional revenues.
A few months ago, I wrote a post titled Facebook’s Next Big Thing, articulating that Facebook should find a way to connect people who SHOULD know each other.
I think this is EXACTLY what Facebook’s wants to solve, and this not only isn’t “thinking small,” but it is virtually reaching for the stars.
In a world where modern AI algorithms have been taught to identify cats and flowers in pictures, and to read x-rays and diagnose illnesses, is that too far-fetched to believe that it will be possible for them to match compatible people? This sounds a bit like science fiction, but just last week, Hinge (a dating service owned by the Match Group: MTCH) has announced a service called Most Compatible that uses machine learning to figure out each user’s taste, relying on the Gale-Shapley algorithm to determine every user’s perfect match.
Now, this is quite a rudimentary and simple algorithm, and it relies on limited data that the Hinge service has accumulated, but imagine an algorithm that uses the vast troves of data that Facebook has. Facebook knows us better than we know ourselves and can find matches that would be compatible with us by also analyzing the billions of connections between people. In my Facebook’s Next Big Thing post I elaborated a little bit more on this point.
Facebook could turn out to be a better matchmaker than Fiddler on the Roof’s Yente.
And so, the 26% drop in MATCH’s share price on the day of Facebook’s announcement may very well have been warranted. Not because of its impact on Tinder, but rather on its flagship Match.com service, which may soon become obsolete.
