According to the latest news by Bloomberg, Facebook Inc. announced that it was going to launch a new dating feature on its social media platform. This announcement sent shares of the dating app company, Match Group Inc. and the owner’s, IAC/InterActiveCorp nosediving.
Match, the owner of apps such as Tinder and OkCupid, saw its shares plunge 22%, which is the biggest one-day drop in the company’s history. Match’s parent company, IAC dropped sharply too by 19%, which is its worst drop since 2001.
According to the announcement, this new feature would allow people who are not friends on Facebook to connect. This new feature, according to Chief Executive Officer and co-founder, Mark Zuckerberg, is meant for fostering long-term, meaningful relationships rather than just hook-ups. This announcement was made at Facebook’s F8 developer conference.
This new launch shows how the social media giant is pushing forward with new products and forms of engagement, even while it works on winning back public trust after the Cambridge Analytica data scandal.
Just last month, the company was swamped with negative publicity with regard to its releasing round 50 million to 87 million Facebook users’ personal data to political research firm, Cambridge Analytica. It was reported that this data had been used to influence the 2016 US Presidential elections.
Zuckerberg acknowledged that his company needed to do much more to keep people safe. However, he said that would not stop the company from keeping on building.
As part of that strategy, the social media giant launched this new dating feature. It is going to be opt-in only and users would be able to create their profiles without their Facebook friends getting to know.
This new dating feature will give Facebook the chance to leverage its massive network of users as well as data on relationships (thanks to the option in Facebook where users can publicize their relationship statuses), not to forget its gigantic financial resources to challenge competing dating apps.
According to Morningstar Investment Service analyst, Ali Mogharabi, this new service could actually give Facebook a whole new channel for its advertising business. Additionally, if Facebook goes in all guns blazing, it could actually impact Match’s ability to attract new users.
The biggest advantage that Facebook has over other dating apps is that it may not have to charge its users any fees. Currently most dating apps generate revenue by charging their users for premium services.
However, Facebook may be able to bypass that by using the data it has garnered from these dating apps to grow its advertising business. For example, Match has its users log in to their apps using Facebook, thus making the social media giant a critical part of its business. And now, due to the Cambridge Analytica scandal, in an effort to improve its reputation in relation to privacy, Facebook has been altering what information it shares with third parties like Match.
Match’s Chief Executive Officer Mandy Ginsberg took a swipe at Facebook in an email statement, saying it was flattering that Facebook wanted to enter the dating app market, however, they were surprised that the social media giant would do so now, considering the amount of sensitive and personal data involved in the dating business.
This is not the only new feature Facebook has now launched. The tech giant also launched another new feature which lets users post to Instagram from other non-Facebook apps like Spotify.
A third new feature will be the clear history feature. This new development allows users to clear their history, remove data that they sent to Facebook from outside websites or apps.