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Online dating soars as paid Tinder nears launch

Online dating
Dimitri Otis | Getty Images

The digital dating business is on fire—in fact, the head of IAC's Match Group, which owns Match, Tinder and OK Cupid, said this was the best January he's ever seen, with users up 60 percent from last year, and up over 600 percent over the past five years.

"Overall usage is amazing," says Match Group Chairman Greg Blatt. "January is to dating what December is to retail, so it's a big sign of where things are going. We're seeing strength across all our products."

Blatt says with about 20 to 25 percent of single people using online and dating apps right now, there's no reason that percentage shouldn't double over the next couple years, and that's thanks largely to mobile. "The phone has become an extension of everything we do. Dating is not only going to be no exception to that, but will lead the way."

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One challenge is that paid services – including the company's flagship Match.com – faces growing competition from free apps, including its own Tinder in particular. "Tinder is a phenomenal; its growth strategy is like nothing else in the category," says Blatt. "Normally these businesses build slowly and steadily. Tinder took off like a rocketship. I think they nailed branding, they nailed simplicity. I think it appealed to what has traditionally been the demographic most resistant to the category, which is younger."

That's why Tinder is working on a premium paid version, which is expected to launch next month. "This is a category where people are willing to spend a little money for an extra experience and that's what we're going to offer in Tinder," says Blatt. "If people don't [pay for a premium version], great, we expect most people not to. We don't think it'll affect user growth at all." Blatt points to the success of its Ok Cupid's premium alternative to its free app as a sign that Tinder will have similar results.

The other big question for the whole digital dating space, is whether the apps are safe, following an IBM study that found over half of mobile dating apps are vulnerable to cyber attacks.

But Blatt says IAC's apps are safe, and that the company makes security a priority. "We have it direct from IBM that ours are all clear," says Blatt. "I don't know what they tested and what they didn't test but our apps came out all clear in their study."

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