Online dating sites – the dependable investment option

29th March 2012

Date your defensive stock

It seems that the world of online introductions is more than defensive – it is virtually recession-proof. And because we lead busier than ever lives – work, travel and hours spent with real or imaginary friends on Facebook – our chances of meeting Mrs or Mr Right in day to day interaction are less than even a decade ago.

According to YouGov, online romance accounted for one in five of all new relationships. And, last year, internet dating subscriptions were added to the Office for National Statistics' basket of goods and services. The London tube is full of adverts, often for more specialist areas such as gay or Asian. And some TV programmes are full of find a mate ads.

UK Market worth £120m a year

Henderson Global Investors estimates the UK market is worth around £120m a year in revenue. It highlights FTSE AIM-listed Cupid (CUP), which focuses on niche markets such as expat Indian dating and single parents.

It recently signed a deal to take on the dating site from Friends Reunited. Its shares now trade at 200p – it was floated at 60p less than two years ago. It forecasts £100m in revenue by 2014, a fourfold increase on 2010.

In the US, IAC/InterActiveCorp (IACI) is the leader with 20% market share, while Spark Networks (LOV) recently reported a 28% year-on-year increase in revenue.

However, Henderson research shows not all these companies have fared as well. China's dominant player, (DATE), listed on Nasdaq last year, perhaps got its timing wrong. Its shares have lost more than half its value in a difficult year for Chinese stocks in general. 

Military love hacked off

But not all is happy in the world of internet dating and mating. The Guardian reports that hacker group LulzSec has broken into US armed forces romance site Military Singles. The hackers claim to have 170,000 emails and photos – many of a very personal nature.


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