February 21, 2009

Meetic and Match.com Europe become one

Dating sites Match.com, where I briefly worked a few years back, and Meetic have combined their European operations with Match.com-owner IAC getting a 27 % share of Meetic and a €5 million note. (Not quite in the same league as IAC-owner Liberty Media's deal with Sirius XM, but nevertheless.)

This combination is not the only one where European competitors have merged to attain greater economies of scale and category dominance status. An example from another line of Internet business would be online DVD rentals with Lovefilm being the surviving entity after a number of mergers between Lovefilm, Video Island, Amazon UK's DVD rental business, Boxman and others.

Obviously there are internal savings to be made when combining two companies, but in addition the combination of two large competitors could take some pressure off marketing spend/customer acquisition cost as it becomes less of "either you win a customer or your competitor does" (and if brands are combined there is a chance of greater brand recognition/recall as the market becomes less cluttered). I'm writing could and not should as there still are local competitors who probably will continue to fight for market share, which could keep customer acquisition costs at the same level.

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