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.
The target demographic of Tinder is urban early twenty-somethings who can enjoy the game aspect of the app by virtue of living in a highly populated city. Users of the app seek instant gratification and casual flings. The fickleness users show towards dating alone should itself be an indicator of Tinder being a fad. This is the same demographic who quickly decided Facebook was no longer cool soon after Facebook users no longer needed a ".edu" email address to register.
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?