For the uninitiated, Tinder is a mobile dating app that uses Facebook (FB) profiles and location tracking to match people. As the song goes, "If you can't be with the one you love, love the one you're (geotagged) with."
Tinder isn't IAC's first foray into the online dating world. Within its holding's of 50+ online brands, IAC also holds Match.com and Tinder's casual dating precursor, OkCupid. The stigma of online dating has largely been erased and one can certainly see the revenue generating potential for sites that cater more toward relationships than casual dating.
Sites such as Match and eHarmony charge membership fees and there are obvious opportunities for cross-brandings when successful matches lead to weddings and babies.
However, where is the money for casual dating where users are so uninvested they cannot be bothered to create a unique dating profile? Anecdotal evidence suggests Tinder dates are used more as fodder for "worst date ever" stories and random hookups.
At $500 million, I am less optimistic than IAC. Under its present model, the site is not monetized; registration is free and there are no ads. The app functions more as a Hot-or-Not game than a common dating site.
Millennials all know the horrors of having nosy parents screening their Facebook accounts. Can you imagine the awkwardness when divorced empty-nesters download the app to brighten up their dating life? That said, if Trojan wants to take an interest soon, my view may be slightly more bullish. At the time of publication the author had no position in any of the stocks mentioned. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.