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Hack Reveals Ashley Madison Almost Built Sex Empire With $70 Million Grindr Buy
If you were (keyword, were) a major hetero hookup site pulling in millions in annual revenue, what would you do to expand?
The answer is terribly simple: the gays! The gays!
Well in emails leaked by hackers calling themselves The Impact Team, an interesting timeline emerges revealing Ashley Madison had hot hands for acquiring Grindr.
Forbes reports that contact between Avid Life Media, owner of Ashley Madison, and Grindr dates back to 2012, when respective founders Noel Biderman and Joel Simkhai discussed how they could advertise one another’s services on each platform.
This year, Biderman and “major Avid Life Media shareholders” got serious about what it would take to fold Grindr into the ‘sex sells’ family.
Biderman sought details about his own company’s finances and those of Grindr.
“In previously undisclosed data, Grindr’s 2014 revenues were said to be $31 million with its earnings before interest, taxes, depreciation and amortization (EBITDA), a measure of profitability, at $14 million. It had 4 million active monthly users and 2 million looking for some fun on the app every day. There were 250,000 paid subscribers in 2014 too.
In a separate management presentation document, Grindr estimated its revenue for 2015 would rise to $38.1 million with EBITDA of $16.5 million. It also claimed to have 324,000 paying subscribers this year.”
But advisors thought Simkhai wouldn’t part with a significant share of Grindr for less than $100 million, well above Biderman’s limit.
Later, Ashley Madison’s biggest shareholder, Jason DeZwirek, and another board member believed by Forbes to be Leonard Latchman of LDL Corp, revised the expected sale to be between $60-70 million for a 51 per cent stake in the company.
In the end, even that number proved too challenging for Ashley Madison, and the lusty merger never managed to climax.
In light of recent events, we don’t expect it to be up for discussion again any time soon.
Dan Tracer
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