Europe's Love Affair with Meetic
When Etienne joined the Meetic online dating site nearly three years ago, he was a shy, 22-year-old business student at one of France's prestigious grandes écoles universities. Now he's a tax adviser at an auditing firm in Luxembourg—and an accomplished ladies' man. During two years as a Meetic member, he estimates he dated 40 women. "You meet industrial quantities of girls, and once you have a technique that works, you can repeat it infinitely," he says.
Etienne, who declines to give his last name, is one of 20 million people who have turned to Meetic (MEET.PA) to jump-start their love lives. The Paris company, founded in 2002, is now Europe's biggest online dating site, says consultancy JupiterResearch, with $73.9 million in revenues during the first half of this year, up 48.5% from the same period in 2006. It has 525,000 paying subscribers (the balance of the registered members can browse but not contact other users) and is fast expanding worldwide.
Meetic is still smaller than the global industry leader, U.S.-based Match.com, which boasts 1,312,800 paid subscribers and posted $169 million in first-half revenues, up 11.5%. But the online dating market in Europe is growing faster, says Nate Elliott, a London-based senior analyst at JupiterResearch. He figures it will double from 2006 to 2011, while in the U.S.—where Match.com does most of its business—the market looks set to grow by less than 50% over the same period.
Meetic rakes in the dough by charging subscription fees ranging from $21 to $78 per month, depending on the length of subscription and use of optional services such as personality tests. That's helping drive big earnings growth: First-half profits surged 69.2%, to $6.1 million, compared with a 20% rise, to $28 million, at Match.com, which is owned by InterActiveCorp (IAC). Meetic shares have risen 35% since their listing on the Paris-based Euronext exchange in October, 2005.
Even Chief Executive Marc Simoncini admits he's surprised by Meetic's rapid growth. "It was not at all what I imagined. I had expected the site to stay within France, and that I'd work one or two days a week," says Simoncini, 44, who set up the company after selling Internet portal iFrance to the Vivendi (VIV.PA) media group in 2000 for $200 million.
Flush with cash, Meetic is buying up competitors. In January it acquired DatingDirect, Britain's top dating site, after shelling out $64.8 million last year for sites in China, the Netherlands, and Brazil. And it recently closed a deal to buy Cleargay, a gay online dating site in France. For strategic reasons, Meetic keeps the original branding of sites it acquires, whereas some rivals, such as Germany's Parship, have opted to start their own sites in foreign countries after concluding it was too complicated to manage multiple brands.
Analysts say Meetic's combination of aggressive acquisitions and pervasive advertising has left the competition in the dust. In recent months, Paris has been plastered with Meetic billboards showing young women sporting tank tops and come-hither smiles, with phrases such as, "I'm just waiting for you to surprise me."
Richard-Maxime Beaudoux, an analyst at Paris bank Natixis (CNAT.PA), says Meetic also has done a good job covering all segments of the market. For instance, it has a separate "flirting site" for 18- to 25-year-olds, called Superlov, and a matchmaking site, called Ulteem, for singles over 40.
Meetic is treading cautiously in the U.S., though. Rather than attacking market leader Match.com head-on, it's billing itself as a place where Americans can meet singles from other countries. Match.com also offers an international site where members in the U.S. can meet people abroad, but users must subscribe to it separately. Meetic charges $40 for basic monthly service in the U.S., the same as Match.com. "We're ambitious, but we're not fools," Simoncini said. "If a few million Americans meet Europeans through our site, that will suffice."
Meetic's suggestive advertising has spurred complaints that it's geared toward one-night stands rather than lasting relationships. Joelle, an employee of the French postal service who did not want her last name used, said she received many sexual invitations when she joined the site in 2004 at age 32. She ignored them, but after three months she received an e-mail from a man who seemed interesting. A subsequent chat online led to a date on a riverboat followed by dinner, and the two soon moved in together and recently entered a civil union—a legal alternative to marriage in France.
Such happy endings aren't guaranteed, of course. Meetic "promises to help you meet people, not fall in love right away," says Simoncini, who met his own wife at a Paris nightclub. But Meetic looks set for continued growth—which should keep the love flowing from its happy investors.