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As Tinder Flirts With Ads, Is It Worth Millions—or Billions?

Co-Founder and CEO, Sean Rad, right, and co-founder Justin Mateen of Tinder on Dec. 4, 2013 in Los Angeles
Co-Founder and CEO, Sean Rad, right, and co-founder Justin Mateen of Tinder on Dec. 4, 2013 in Los AngelesPhotograph by Ringo H.W. Chiu/Corbis

When I was reporting a story about Tinder last summer, the founders of the red-hot dating (and hookup) app were awfully evasive about their relationship with IAC/InterActiveCorp. I had to ask Tinder Chief Executive Officer Sean Rad over and over again before he acknowledged that IAC was not just an investor but the company’s majority owner. Why? For a startup, it’s a lot less sexy to have been born in a corporate research and development session than a college dorm room.

The arrangement is again relevant as IAC turns its dating division, headlined by Match.com, into a separate business that may eventually be spun off. Match had operating income of $205 million last year—but none of it came from Tinder, which IAC has been happy to operate at a loss as a kind of gateway drug, hooking a new generation of Millennials on the idea of finding love (or at least casual sex) online. In other words: Start them on Tinder, and they’ll end up paying for Match.