eHarmony to Go on Acquisition Spree

Dave of Online Dating Insider spotted a job opening this morning for “Corporate Development Analyst” for Acquisitions at eHarmony. Instead of partnering with a real VC firm, Dave sees that they are looking for cheap labour, an unknown investment tire-kicker.

Because they’ll be hiring someone who comes from an investment bank or a private equity firm, he doubts the new hire would have the faintest clue about running and growing an online community — he or she will just look at dollar signs. Customers know if all you’re after is money and customer dissatisfaction spreads fast.

Here are the full details of the job opening:

Corporate Development Analyst

eHarmony, the internet’s leading online relationship service, is growing! The company is building a robust Corporate Development team to turbocharge its already double-digit organic growth via acquisitions in select vertical and horizontal markets. We are looking for a creative, strategic and organized analyst with 1 – 3 years experience who will become a major contributor to this effort. This high-profile role offers significant room to expand and grow within eHarmony, a profitable, fast-growing private company backed by Sequoia Capital and Technology Crossover Ventures.

Essential Functions

  • Work with the VP, Corporate Development and other internal clients to develop and prioritize investment themes.
  • Perform industry research to highlight opportunities within eHarmony’s existing businesses or identify promising new verticals.
  • Conduct analyses to build a pipeline of target companies within using syndicated research, competitive intelligence, company relationships, primary research and a proprietary screening methodology.
  • Develop detailed financial models and valuation scenarios for potential transactions.
  • Create recommendations and document conclusions for communications within eHarmony.
  • Participate in all phases of the acquisition process post-target identification: negotiations, documentation, due diligence, closing and integration.

Job Qualifications

  • 1 – 3 years at a leading consulting firm, investment bank, corporate development team or private equity/venture capital firm.
  • Excellent interpersonal skills, including working externally and at all levels internally. Team player.
  • Track record of working on complex analyses within minimal supervision.
  • Deep experience working with Microsoft Excel, Powerpoint.
  • Highly skilled in research, analysis, modeling and presentations development.
  • Passion for online services.
  • Bachelor’s degree from a top college or university.
  • Previous M&A experience preferred.

Source: monster.com

What would a merger with eHarmony look like?

eHarmony’s systems are grossly incompatible with typical search-and-browse dating sites, if dating sites are what they hope to acquire. The marrying market for the Singles product is thinning out, according to The New York Times. Will they acquire publication properties — extending its subsites eHarmony Advice, eHarmony Parenting and eHarmony Labs? Last February Warren spoke to Reader’s Digest about a career placement site.

It’s fun to think about. What online services do you think will eHarmony acquire?

Read our guess “Businesses We’d Like eHarmony to Venture Into”.

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Trackbacks & Pingbacks 1

  1. From M&Aナビ on 16 Apr 2008 at 7:58 pm

    M&Aナビ…

    M&Aのポータルサイト。M&Aのすべてが分かる!M&Aに関心のある方のお役に立ちます。…

Comments 6

  1. Scott Grey wrote:

    Oh my… should I prepare for a hostile takeover?

    Oh, wait. That’s impossible. And I’m not that important anyway.

    Never mind.

    Posted 17 Apr 2008 at 7:21 am
  2. tWilliz wrote:

    Re: “he doubts the new hire would have the faintest clue about running and growing an online community — he or she will just look at dollar signs.”

    This could not be more accurate, nor more in line with what they think they need, if you can even use the term ‘think’ here. Numbers are the only thing they consider important. The only thing.

    Their online community has denigrated beyond repair (and belief) and this should finally pitch it into the dumpster. It’s been like watching a protracted train wreck for the past 9 months. I feel sorry for the users. They’ve been thoroughly ‘used’. All 200 of them. Well, before the banning and deleting took place. So, what are we down to now? 119 in 9 months? Wow, now those are some numbers to take to the bank.

    They’ve never gotten it that their users are real people. They don’t need to analyze it, they need to nourish and grow it. At this point, they need Ghandi. Their approach to managing their community is completely devoid of anything even remotely close to resembling real human interaction.

    How ironic for a company that claims to be an expert in human relationships.

    Posted 19 Aug 2008 at 6:08 pm
  3. tWilliz wrote:

    Oh damn, make that ‘Gandhi’. I’m sure there’s some karmic repercussion for that typo, but at least I get it that there’s a repercussion for my actions. You know, Mother Teresa would be a good choice, too. Looks like they’re out of luck on all counts.

    Posted 19 Aug 2008 at 6:16 pm
  4. eHarmony Blog wrote:

    At what point did their online community start falling apart, do you think? What did they do/not do, in your opinion, that impeded the community?

    Note that they continue to spend money on the site buying 5-7 articles a week from freelance authors.

    If they can change one thing about eHA, where should they start?

    P.S. 119? I’m curious where you got this number, tWilliz.

    Posted 19 Aug 2008 at 9:20 pm
  5. tWilliz wrote:

    Hello eHarmony Blog,

    1. The community was headed downhill at the start because they failed to provide managers who understood the dynamic of developing a community. There were a number of things they did not put in place. They impeded their own success through what they did not and could not know on their own, among other problems.

    The buying of articles: All communities need content and it is important that it’s good content. I’m going to pass on commenting on the viability of their content but I will tell you that while it’s something you must have, it’s secondary to the users. It’s like providing a newspaper and coffee at a coffee shop where people gather. ’nuff said.

    Change one thing? It’s a good question but I’m going to pass on falsely aiding something that needs to be hauled back in, taken seriously and done properly.

    “119? I’m curious where you got this number.”

    Fair enough. It was my guesstimate from viewing the site. So, I put the question to someone who works in community properties to set me straight. Here is their ‘everything I ever wanted to know and more’ response:

    The success of a community is in the number of active users. You want users who visit everyday or every few days who contribute to the group. This is what builds the community. You should be looking to have a minimum figure of 10 to 20 percent of visitors as active users and grow from there. Solid users can represent a very large number of people if you know how to attract and retain them.

    Having said that, they appear to have a little over 2000 searchable users. I have no idea if banned users profiles are listed in the ranks, but for all intents and purposes we’ll go with 2000 users since you can search and find that many accounts. I admit that 2000 users seems very low considering the amount of time that’s elapsed since inception and the history and database they have to pull from, but I’ve got nothing else real to go on and I wouldn’t expect to be presented with anything less than data skewed to their advantage. Face it, they claim to have 22 million users. Well maybe, but practically none of them have flocked to this community. Things that make you wonder… Anyway, onto answer your question regarding how many solid, active users they have in 5000 words or less:

    GENERAL USER PATH:

    You can figure right off the bat that more than half of the entire number of 2000 registered users are comprised of:

    1. Users who visited and registered but are never coming back. My guess would be in the 750 loss range.

    2. Employees (it’s a company of 200 or so. They’d want to increase their user numbers so they’d probably have all employees sign up.)

    3. Spam/Junk accounts. My conservative guesstimate would be at least 50 of these accounts currently.

    Regardless of the actual number of registered users it’s been my experience that you retain half or less of them, so in our case that follows and leaves approximately 1000 registered users. I’m just working off the numbers you typically see with these things and I’m being generous by halving it. I’m also pretty sure that all those 200 employees aren’t all posting, either.

    So, of the 1000 remaining registered users it would generally follow that:

    50% of them will read some but never post. Some may never return after a few posts.

    25% of them will kick the tires now and then with sporadic posts.

    10% of them will be light community users.

    10% of them will be the regular users of the community.

    5% of them will be heavy users.

    It’s the combination of light to regular to heavy users (active-on-some-level) that begins to form the community, because you clearly can’t count on absent, looky-loo or sporadic users to build your community. Of course any of the 2000 of them could have clicked on an ad but we’re talking about building the actual community — the foundation that will entice and retain new users.

    So this means that ‘active-on-some-level’ users account for about 250 users or 25%. Of those 250 users, I’ll be optimistic and say that half of them (or 12-15%) are very engaged and active with the site, which represents approximately 125 real, solid, active users, or your magic number of ’119′ if you want to factor out some employee or moderator accounts. I’ll give it to you that 119 was a pretty good guesstimate.

    GROUP USER PATH:

    Now, if you look at one of their most active groups showing 500 users you’ll see some interesting things. While I can’t see all the numbers going on with the general membership, I can see the simple numbers and activity levels of users in a group and amazingly enough this aligns with the General User Path I described above. Imagine that.

    I’m going to assume that users register and then choose to sign up for these groups themselves and that they’re not automatically assigned to them due to any other profile data factor. Selecting to sign up for a group is significant and you might expect a higher percentage of participation within the group. So, for this group of about 500 the numbers are:

    1. 274 of the 500 users have posted 0-4 times. (55%)

    2. 91 of the 500 users have posted 5-25 times. (18.2%)

    3. 63 of the 500 users have posted 26-99 times. (12.6%)

    4. 51 of the 500 users have posted 100-500 times. (10.2%)

    5. 16 of the 500 users have posted 500-1000 times. (3%)

    6. 5 of the 500 users have posted 1000 or more times. (1%)

    Users in group #1 are non-users. It’s possible some are new accounts that will grow but many date back months with no activity at all. For all intents, they’re non-users at this point. You can’t grow a community with them or take a non-user to the bank.

    Users in group #2 are looky-loos and tire kickers. They may cross over into a higher activity level but it’s still iffy at this point. They could just as easily slip into oblivion depending on the group climate.

    Users in group #3 are your new or light community users. They have the potential to cross over into a higher activity level and they are adding some traffic but they are not forming or carrying the bulk of the group.

    Users in groups #4 and #5 are the heart of the community, representing 67 out of 500 users.

    Users in group #6 have nothing better to do with their time. Just kidding!
    Users with a disproportionately high number of posts often make good moderators but they can also wreak the greatest havoc and send a group or entire community into a mass exodus depending on their reach, and in a very short amount of time if the administration doesn’t have a strong metaphor or climate in place. They can have the biggest voice in the group if allowed to run amok. They can and often do set the climate of a group if allowed. This can be good and it can be bad. They make the group welcoming or unwelcoming and their opinions and attitude can greatly affect the overall group or community.

    The bottom line is that both models follow the same path. As I said in my first model, half of the users are ‘active-on-some-level’. This is pretty much true in the case of the ’500 user’ group as well. 227 users fit this activity profile, with the heart of the community (groups 4, 5, & 6) representing 72, or lets say 75 users to make it even, who actually form and support that group.

    In the general user model of 1000 users it distills down to 125 users or 12.5% – damn I’m tired of you being right! :D

    In the selected group model of 500 users it distills down to 75 users or 15 %

    As I said, I would expect better retention and activity in a group that a user chose to join, but in this case it’s about on par with the general users. Last word on this: It seems odd there are 2000 total users and 500 of them are in this one group. There could be more total users, though probably not a lot more, but with the ’500 group’ you can easily see the profiles and the posting activity and the numbers work out in the model the same way. If they had more users I’d still expect the same percentages. To be honest the site really doesn’t act like it has a lot of users. Anyway, that’s my best estimation.

    I also noted some odd things about their admin users but I’m not going to comment on that. Anyone can do the research for themselves.

    –end of transmission–

    I wanted to add thanks to you for this blog. It’s well done. The information is interesting, informative, and well weighted.

    > tW

    Posted 20 Aug 2008 at 4:31 pm
  6. SingleGuyInNC wrote:

    I saw the recent announcement about eHarmony acquiring JustMommies and it finally clicked that I have seen the same practices of companies buying Internet user communities/forums in my other interests. In those cases, the company buying the user community forum actually imposed major changes because since it became “an investment cash cow”, so they sought to recoup it by charging users for advertising in the for sale sections etc. where previously that had not been done. That made a lot of people unhappy and it caused masses of users to just reconvene at another web forum that someone else setup and lost a lot of the core contributors that made the site.

    It will be interesting to see if over time, eHarmony will make similar changes (they claimed in the recent cases that they won’t) because the bean-counters see an opportunity to make money.

    Another commonality I see, quickly glancing through the JM acquisition thread and what I recall on WB, was the immediate pouncing on their perceived anti-LBGTQ stance. They just can’t seem to shake that in the public eye. Personally, I think that people are being way too oversensitive and uninformed about why it is an issue for the dating site and if they were smart, they would proactively explain their stance as a part of the acquisition announcement.

    I really have to wonder what eHarmony has going on “in the kitchen” since we don’t see very many improvements to the site…something has to be cooking or their programmers are stuck in a vicious cycle dealing with accommodating growth.

    Posted 25 Oct 2008 at 1:25 pm

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