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The dominant business to own as the world's love life goes digital
March 5, 2019

From Stansberry Research:

More and more, the Internet is making superficial interaction unnecessary...

You don't need to endure the supermarket cashier's questions if you can order all your groceries online.

Studies have shown the younger generation is not developing certain social skills that previous generations did. These folks cannot pick up on normal social cues or feel comfortable engaging in "small talk."

In a study released a few years ago by picture-sharing social-media network Flashgap, almost 87% of millennials admitted to missing out on an in-person conversation because they were distracted by their phones. Having less meaningful face-to-face communication is a trend that will only grow as technology becomes more integrated into everyday communication.

But that doesn't supersede our most fundamental needs – including companionship.

No amount of time spent on social media or playing the latest game on our phones will change the fact that, as humans, we crave socialization and relationships... It's harder than ever to meet someone face to face when we're all buried in our phones.

That's why the business of love has moved online...

Roughly a decade or so ago, using the Internet for dating still had a stigma attached to it. Couples might "admit" they met online with a touch of embarrassment.

That stigma is gone. And it should be. After all, why do we trust our entire future to a chance meeting at a nightclub or social event? Why not look for potential dates among the thousands of profiles waiting on your phone?

The younger folks are, the more likely it is that they've taken their dating digital. About one in three relationships now starts online. And in a 2017 survey of 14,000 engaged or recently married folks from wedding-planning website The Knot, 19% of brides reported meeting their significant other through online dating or social media. That's a higher percentage than couples who met through friends (17%), at college (15%), or at work (12%).

And that's just the start... By 2031, half of all relationships are estimated to start online.

It turns out, one publicly traded company dominates a huge part of our romantic future...

We're talking about Match Group (Nasdaq: MTCH). As you can tell from its name, the company owns and operates the largest dating site in the world by sales – Match.com.

Match was one of the few real success stories of the original dot-com boom. Started in 1995 with a monthly fee of $9.95, it was one of the first Internet businesses to successfully charge people for online content or membership.

Now, Match.com isn't the only dating site in town...

The second-most popular appears to be PlentyOfFish, which is free and supported by advertising. PlentyOfFish claims 150 million registered accounts and starts 2.5 million conversations between users every day. There's also Tinder, OurTime, OkCupid, and Meetic.

Those sites all count millions of registered accounts, but here's the thing...

All those "competitors" are owned by Match Group.

OkCupid is one of the world's fastest-growing dating sites and claims to be responsible for more than 40,000 first dates every day. OurTime is the largest dating site for singles over the age of 50. And Meetic is the biggest dating site in Europe.

Overall, Match Group has products available in 42 different languages across more than 190 countries. The company says hundreds of millions of singles have used one of its brands' products at some point. All told, Match Group had more than 8 million average subscribers in the fourth quarter of last year – up from 7 million in the same quarter in 2017.

No other company comes close. Match completely dominates the market. The only dating site name you may have heard of that isn't under the Match umbrella is eHarmony. While Match Group takes 25% of the dating market, eHarmony takes 12%, and no one else gets up to 5%.

And Match has one of the fastest-growing online-dating brands – Tinder.

It's the young folks' dating app of choice and has grown fast since its 2012 introduction. Tinder allows users to connect with people located nearby. If you like a profile, you swipe right. If you don't, you swipe left. If the person on the opposite end also liked your profile, then you two can start a conversation.

The app is a hit because it makes online dating simple and convenient. It doesn't get any easier than that. As a result, it has grown to more than 2 billion views per day, according to the brand's website.

Tinder may be the hot app today, but Match's other brands aren't going anywhere...

The big tech firms have mostly stayed away from online dating. Alphabet (GOOGL) and others have made no moves to enter the industry. Facebook (FB) launched a Facebook Dating test in Colombia last September, but it's still in the early stages. And the platform will have a hard time gaining market share from Match's well-known, established brands.

Match Group is a well-diversified, international company. And investors have taken notice...

Since Match went public in November 2015, its stock has gained more than 275%. And we believe it's just the beginning for this stock... In Match's fourth-quarter earnings report, CEO Mandy Ginsberg called 2018 "the best year in our history for shareholders."

Sometimes investing is simple.

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