'EHARMONY GETS A DIVORCE.'

[ by Howard Haykin ]

How much crazier does it get?  Bloomberg reports that EHarmony Inc.,  the operator of a Website designed to help guide singles into happy marriages, is ending some relationships of its own.  Neil Clark Warren, who founded EHarmony 12 years ago, decided to break up with investors and reboot.

At age 78, Mr. Warren is taking back control.  Since becoming CEO in July after a series of CEO changes, he’s fired 100 people, cut the board from 9 to 2, and bought back stock from Sequoia Capital and Technology Crossover Ventures - which invested $110 million in 2004.  An IPO, which had been expected in 2010, is now off the table and Warren said in an interview he has no interest in selling the Santa Monica, CA-based company. 

Instead, the trained theologian and psychologist will spend next year building EHarmony’s portfolio to add services that help people find the right job, understand themselves and build relationships to reduce loneliness. Gone from the company are the business degrees;  in their place are social scientists.

"Building a relationship business is so different from trying to build something with machines or widgets.  To put it in the hands of people that only want to look at it as a source of business success, revenue success doesn’t make sense anymore." -- Neil Warren, Chairman of the Board from the beginning.

Not that Warren views EHarmony and its $60 monthly subscriptions as a nonprofit.  If run correctly, he says the company can be worth $1 billion in 2 years and $5 billion in 5 years.  [C-I Note:  You may find it interesting - and I hope this isn't sounding too brash - but Mr. Warren's numbers somewhat parallels the numbers in Compliance-Insights's business plan.  Hmmm.  Coincidence?]

With 14% of the U.S. dating-services market, EHarmony trails only IAC/InterActiveCorp, (IACI) - parent of Match.com, which has 24%, according to industry researcher IBISWorld.  

Chew on that for awhile.   [Bloomberg, 1/3/13]