Tinder Narrows Down Its Options for How to Make Money

Photograph by Ringo Chiu/ZUMA Press

Tinder co-founders Sean Rad, left, Justin Mateen, center, and Jonathan Badeen, right, are ready to make some money.

Tinder, which has been connecting love-seeking, smartphone-swiping millennials for more than a year, has narrowed its money-making plans to three possible matches. Barry Diller, chairman of Tinder-backer IAC/InterActiveCorp, said the dating app is considering three approaches: subscription, advertising or “freemium,” where basic access is free and additional services cost extra.

“We have got lots of little areas marked for revenue,” Diller said in an interview at Bloomberg’s headquarters in New York. “You bleed into them over time.”

Tinder is a match-making app built around one simple question: Do I like what I see? Users sign in with their Facebook accounts to upload names, ages, photos and sexual orientations. Then a photo pops up of someone that meets the user’s broad specifications. Swipe right if you’re interested or left if you’re not. If both users swipe right, they are connected through a messaging system in the app. It’s this simplicity that, according to Diller, is the secret sauce for the app’s popularity.

But simplicity can be easily copied. The app Hot or Not has a similar swipe-rating model and goes a step further by giving users an attractiveness score. Another site, Coffee Meets Bagel, shows users one match a day at noon who they can connect with or pass on.

While Tinder has amassed an avid user base, the business currently generates no revenue. As it starts to focus on making money, Tinder will be able to draw on the expertise of its parent. IAC, which incubates Internet businesses within the conglomerate, also runs subscription dating site Match.com, which has nearly doubled sales to $788 million in three years, and OkCupid. IAC has spun off companies like Ticketmaster in 2003 and Expedia in 2005. But Diller said the buzz around Tinder is different.

“I have been developing online businesses for quite a while now — since the Internet started,” Diller said. “I have never had the number of people banging through our doors to see if we would sell them a little piece of Tinder.”

Diller has swiped left on all of those offers.

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