Current:Home > NewsAre Americans burned out on dating apps?-Angel Dreamer Wealth Society D1 Reviews & Insights
Are Americans burned out on dating apps?
View Date:2024-12-23 14:23:30
Whitney Wolfe Herd's exit as CEO of Bumble is a sign Americans are falling out of love with online dating.
The 34-year-old entrepreneur founded the woman-centric dating app nearly a decade ago and took the company public in 2021, turning her into what some described as the youngest self-made female billionaire. Herd also co-founded dating app Tinder.
Bumble said Monday that Herd will be succeeded as chief executive by Slack CEO Lidiane Jones. Herd will remain at Bumble as executive chair of the Austin, Texas-based company.
The management shuffle at Bumble coincides with headwinds for the broader dating app business as user growth slows and companies struggle to innovate and further monetize the match-making platforms.
Bumble also owns apps Badoo, Fruitz and Official for making friends and networking. The other big industry player, publicly listed Match Group, owns Hinge, Tinder and other dating apps.
What sets Bumble apart from competitors is that women make the first move — a feature Herd designed to put them more in control of their dating lives and to help limit unsolicited messages from prospects that don't interest them.
Bumble remains profitable. On Tuesday the company reported net income of $23.1 million on revenue of $275.5 million for the third quarter, up from $232.6 million a year ago. But shares of the company have slumped, closing Monday at $13.42, down roughly 40% on the year and from $76 in its market debut two years ago.
"With loneliness on the rise globally to the point that it's been declared an epidemic in the U.S., there is considerable room for each of our apps to grow and have significant impact on people's lives," Herd said on the company's earnings call.
Younger people shunning apps?
For dating companies, however, competition to cash in on that loneliness has become increasingly fierce amid a proliferation of apps geared to all manner of customers and signs that online dating is losing its luster with younger Americans.
Tinder said it lost paid users in the third quarter and predicted fourth-quarter revenue that fell short of analysts' expectations. Bumble said it had 3.8 million paying users across its apps in its most recent quarter, up from 3.3 million in the year-ago period.
"Younger audiences, like Generation Z, aren't using dating apps the same way. A lot are them are using social media, like Instagram and TikTok to meet people and that's different from the swiping right and left, which is such a big feature in online dating," Citigroup analyst Ygal Arounian said.
Dating apps have struggled to add users in recent quarters, according to a recent Morgan Stanley report.
"Fueling the view that the industry is simply becoming saturated, mature or over-monetized, the top dating apps reported slowing revenue growth in 2022 (the industry overall reported about $2.6 billion in revenue for the year) and tempered guidance for 2023," Morgan Stanley analysts.
According to a survey on college students' dating views from Axios and The Generation Lab, nearly 80% of respondents said they do not using dating apps regularly. Over half said they met their partners in person, compared to 15% who said they met on a dating app.
Economic uncertainty is also weighing on singles' willingness to shell out for dating app subscriptions, according to industry analysts.
"At an industry level, we are seeing some challenges to overall user growth and time spent on online dating app," Arounian told CBS MoneyWatch.
Most dating apps allow people to use the services for free, but charge a premium for an improved experience that often promises to boost a user's chances of matching with high-quality prospects.
At Bumble, Jones will have to prove she can find new avenues of growth to recapture the confidence of Wall Street.
"The new strategy from the incoming CEO will be determining factor in whether people want to invest," Jefferies analyst James Heaney told CBS MoneyWatch. "She is still an unknown quantity, and there will be a period of fleshing out to see how the new CEO is thinking about the business."
The shift at Bumble comes after another recent high-level departure at the company, with former President Tariq Shaukat stepping down from his position in May.
"There are definitely a lot of questions around what's going in the industry given slowdown around Tinder in particular. That's a big knock on the space," Heaney added. "But I think I think issues at Tinder are idiosyncratic to them. There is still plenty of runway left in the online dating space. There is plenty of room for additional people to pay to use these apps."
Megan CerulloMegan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace issues, the business of health care and personal finance. She regularly appears on CBS News streaming to discuss her reporting.
veryGood! (65)
Related
- Investigators believe Wisconsin kayaker faked his own death before fleeing to eastern Europe
- Shooter in attack that killed 5 at Colorado Springs gay nightclub pleads guilty, gets life in prison
- Taylor Hawkins' Son Shane Honors Dad by Performing With Foo Fighters Onstage
- Energizing People Who Play Outside to Exercise Their Civic Muscles at the Ballot Box
- What to know about Mississippi Valley State football player Ryan Quinney, who died Friday
- America’s First Offshore Wind Energy Makes Landfall in Rhode Island
- Drought Fears Take Hold in a Four Corners Region Already Beset by the Coronavirus Pandemic
- Al Pacino Expecting Baby No. 4, His First With Girlfriend Noor Alfallah
- The View's Sara Haines Walks Off After Whoopi Goldberg's NSFW Confession
- Unchecked Global Warming Could Collapse Whole Ecosystems, Maybe Within 10 Years
Ranking
- Could trad wives, influencers have sparked the red wave among female voters?
- The Surprising List of States Leading U.S. on Renewable Energy
- Sister Wives' Kody and Janelle Brown Reunite for Daughter Savannah's Graduation After Breakup
- California Bill Aims for 100 Percent Renewable Energy by 2045
- 4 charged in Detroit street shooting that left 2 dead, 5 wounded
- Ted Lasso's Tearful Season 3 Finale Teases Show's Fate
- Ulta 24-Hour Flash Deal: Save 50% On a Hot Tools Heated Brush and Achieve Beautiful Blowouts With Ease
- Obama: Trump Cannot Undo All Climate Progress
Recommendation
-
Kathy Bates likes 'not having breasts' after her cancer battle: 'They were like 10 pounds'
-
New malaria vaccine offers a ray of hope to Nigeria. There's just one thing ...
-
Orlando Bloom's Shirtless Style Leaves Katy Perry Walking on Air
-
Kim Kardashian’s SKIMS Only Has Sales Twice a Year: Don't Miss These Memorial Day Deals
-
Mike Tyson concedes the role of villain to young foe in 58-year-old’s fight with Jake Paul
-
Yes, Kieran Culkin Really Wore a $7 Kids' Shirt in the Succession Finale
-
Hundreds of Clean Energy Bills Have Been Introduced in States Nationwide This Year
-
Video: Dreamer who Conceived of the Largest Arctic Science Expedition in History Now Racing to Save it